Innovation key driver of economy

Tuesday, June 17, 2014

Innovation key driver of economy

By : Khalil

Innovation is widely recognized as one of the key drivers of sustained economic development. All advanced economies are characterized by elaborate, active innovation ecosystems.

Realizing the importance of innovation, Saudi Arabia has all along been taking appropriate measures.

A case in point is Saudi Basic Industries Corporation (SABIC), which today ranks among the world’s top petrochemical companies.

Recently, SABIC passed the milestone of having more than 10,000 patents either issued or pending approval, making it the largest owner of intellectual property in the Middle East.

SABIC is among the world’s market leaders in the production of polyethylene, polypropylene and other advanced thermoplastics, glycols, methanol and fertilizers.

What SABIC is doing is obviously important for international competitiveness and development of a company with increasingly global ambitions for growth.

It has ably demonstrated how essential it is for the company to position itself on the cutting edge of a rapidly evolving sector.

SABIC’s international status speaks for itself; It is among the world’s market leaders in the production of polyethylene, polypropylene and other advanced thermoplastics, glycols, methanol and fertilizers.

While SABIC’s rapid march in the sector is extremely important for itself, its efforts are equally important for the country as a whole.

New ideas, entrepreneurship and innovation must emerge as increasingly important growth drivers if the Kingdom is to provide quality employment underpinned by increasing productivity and good remuneration.

Talking of SABIC’s track record, it’s now widely known that on average it files a new patent application every 18 hours, each based on the work of approximately four researchers.

SABIC has also significantly increased the rate at which it obtains patents; 2013 recorded 373 patent applications filed by the company, a rise of over 300 percent from the figure in 2010.

SABIC’s work is particularly important as it builds on the Kingdom’s natural resource endowments. It represents an effort to develop an innovation culture in a sector that historically provided relatively limited value-added products.

The fact that SABIC is enabling the Kingdom to capture more and more of the hydrocarbons value chain means that oil is becoming an important driver of the very inclusive economic development that will not only allow job growth and export diversification but also make the Kingdom potentially less dependent on the vagaries of the global oil market.

If an increasing volume of Saudi oil is processed into high value-added industrial products, the Kingdom will be able to boost the resilience of its economy while developing its knowledge economy credentials in a realistic way.

Of course, this calls for innovation, especially in today’s world of international competitiveness and globalization.

What Mohamed H. Al-Mady, SABIC vice chairman and CEO, said in this context merits attention — that innovation is a cornerstone of SABIC’s strategy.

“As an organization we have always been open to new ideas. This is one of the key enablers of our success. As such, we learned that business growth in the marketplace requires innovation. We also learned that we could not be an innovator without globalizing, so we acquired companies around the world to help realize this.

“From the accumulated wisdom, we have gained as a result of globalizing; we now know that our sustainable business growth and leadership in innovative customer solutions have positioned us among global leaders in the petrochemical industry.”

What Al-Mady says is so apt and something for other sectors to ponder over and even emulate.

— khalil@arabnews.com