Gulf countries can make a leap into the digital age with next-generation technology parks that incubate and grow firms and talent.
Technology in GCC? It's a walk in the park
The information and communications technology sector in the GCC has grown at double-digit rates over the past five years, fuelled by large transformation and modernisation projects in the public and private sectors. During this boom, it has become clear that the Gulf can better fulfil its technology needs, and have less reliance on foreign skilled labour, by developing technology parks. These entities, essentially specialised technology clusters set up as special economic zones, allow local technology skills and knowledge to develop. By creating a dynamic, favourable environment to incubate and grow companies and talent, technology parks will help the Gulf develop its knowledge-based economies.
There are more than a half dozen parks that focus on technology. Dubai Internet City led the way in 2000, followed by Dubai Silicon Oasis, Qatar Science and Technology Park, Oman's Knowledge Oasis Muscat and Saudi Arabia's King Abdullah Bin Abdul Aziz Science Park. Parks were initially set up as commercial plays, attracting large multinational companies which primarily focus on the sale, implementation and operations of technology products and services. Others are now seeking to play a different role: incubating their countries' technology capabilities and industries, often housing research and development centres as well as the satellite campuses of renowned technical universities.
However, neither type of park is sufficient on its own to develop a sustainable, comprehensive grassroots technology industry. Commercial parks aim to offer the best commercial environment, attract the largest number of tenants and maximise financial returns from leasing or selling land or buildings. They do not generally have the incentive to embrace the broader opportunity to grow a grassroots industry.
Incubator parks, by contrast, focus on creating broader economic value. However, the path for incubator parks is more challenging and often lacks critical commercial traction in the early years. The Gulf should now focus on building "next-generation" technology parks. Such parks aim to create value through research and the incubation of technology projects, and to capture value by commercialising products and services. They thus encompass all the elements of commercial and incubator parks, and are positioned to remain viable over the long term.
Successful next-generation parks offer value to their tenants on three levels. The first tier is composed of basic, essential offerings and services: fiscal incentives and financial subsidies, world-class business infrastructure and telecommunications and technology networks, as well as holistic business support and one-stop government services to facilitate the establishment and operation of their businesses.
The second tier is critical for the transition to a knowledge-based society. Next-generation parks incorporate advanced education and research via strategic partnerships with technical universities and the establishment of research and design clusters within the park. Furthermore, they actively assist with transforming ideas into businesses, with incubation services and dedicated funds for start-ups.
Moreover, next-generation parks play an integral role in linking tenants to the larger economic forces in their countries, including government, industry players and educational institutions. They enable access to government-led technology initiatives, help drive the enhancement of the technology curriculum in schools and universities, and serve as a liaison between industry and education through job placement, internships and joint ventures. The final, most-advanced tier of offerings is what makes technology parks sustainable ecosystems in the long term, from both the business and lifestyle perspective. It is imperative that next-generation parks are committed to the long-term development of a vibrant local industry.
They must establish targeted partnerships to attract and retain strategic tenants, and they must promote innovation through dedicated funding and world-class technology educational institutions. Next generation parks should also be advocates for strong regulations and laws to protect intellectual capital. Furthermore, to attract and retain talent, next-generation parks must address their tenants' lifestyle needs. It is a benefit that has too often been overlooked in the Gulf, but it is a key differentiator in the best technology parks worldwide.
These parks focus on providing well-appointed offices and desirable living amenities - such as housing, schools and retail and entertainment complexes - that help them attract and retain the right mix of companies and talent. They are also conveniently located in urban environments, making them more appealing to tenants. As policy makers plan technology parks that feature these value propositions, they will need to consider three strategic imperatives to support them: clear focus, long-term commitment and prime location and layout.
First, next-generation parks should focus on developing certain segments and activities through dedicated clusters, rather than being everything to everyone. This focus could be industry-related, with clusters in health care or transportation, for example, or activity-related, with clusters dedicated to manufacturing or operations. Clusters should be selected to meet market demand while considering what is available from competitors and in line with the nation's broad economic objectives.
Second, decision makers will have to provide the right level of political and financial support for the long-term viability of these parks. They will have to devise new success metrics, with less emphasis on short-term profitability and financial return on investment, to reflect the parks' long-term mission of developing a grassroots technology industry. These metrics could include the number of new tenants joining the park, the number of local start-ups, the number of patents awarded and the number of local technology savvy university graduates. Decision makers will also need to secure funding and the right management team early in the process if the parks are to have a comprehensive and successful development stage.
Third, to ensure state-of-the-art facilities, next-generation parks' construction should be entrusted to a world-class master planner knowledgeable about smart-city technologies and urban planning. The parks' layout should be campus-like, with ample green space and a focus on "groundscrapers" - low or medium-rise buildings. Such architecture fosters the communication and collaboration that are essential for innovation as well as helping to integrate the different businesses in the park.
By putting in place the all the necessary offerings and supporting them with the right strategies, GCC leaders can create next-generation parks that are self-sustaining ecosystems. This would expedite the development of an indigenous technology industry in the region, helping the Gulf bridge its technology gap and transform itself into knowledge-based societies. Ramez Shehadi is a partner and Shant Oknayan an associate at Booz & Company