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OECD Kuwait Innovation Review

An abundance of natural resources is intuitively expected to be a blessing. Nonetheless, it has been argued for some decades that large endowments of natural resources, such as oil, gas, and minerals, may become more of a curse, often leading to slow economic growth and redistributive struggles. This "paradox" and its accompanying phenomenon – Dutch disease – wherein the growth in activity of the natural resource sector accompanies a contraction and stagnation in other vital sectors, such as agriculture, manufacturing, or services, has posed a serious challenge to policymakers. Policymakers and planners seeking to develop a diversified economy, and mitigate risks posed by price volatility, have sought policy responses, including a mix of fiscal, exchange rate, and structural reform policies.

Oil has provided Kuwait with wealth and well-being for the past 80 years. The slowing demand for oil is threatening the sustainability of the current economic and social model, emphasizing the need to transition towards a knowledge-based society – where value creation, the resolution of societal challenges, and the well-being of society at large will be based on the production, diffusion, and implementation of knowledge. “New Kuwait,” an overarching national development plan, proposes a vision of transforming Kuwait into a trading and finance hub and a transition toward a knowledge-based society (“Smart Kuwait”) by 2035.

In this context, the Kuwait Foundation for the Advancement of Science (KFAS) and the General Secretariat of the Supreme Council for Planning and Development (SCPD) commissioned an innovation review executed by OECD Directorate for Science, Technology and Innovation. The OECD Review of Kuwait’s Innovation Policy is part of a series of OECD country reviews of Innovation Policy, which provides an independent systemic assessment of the Kuwaiti National Innovation System (NIS). It analyzes the improvements that can be made within the Kuwait national innovation system, thus formulating recommendations on how government policies could contribute to such improvements.

TIV’s experts were part of the core OECD team that conducted the review expected to help Kuwait adopt policies, programs, and instruments to overcome its resource curse and transition to an innovation economy based on human resource endowments.

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