Why are countries in the Gulf rich but lagging in technological innovation?

Question

Countries in the gulf are oil rich. But they are lagging in R&D sector. Governments do not spend much on R&D. Most countries employ foreign contractors or import technologies.

What is the reason?

Answer 1

Update

Resource Curse literature attempts to address the issues you are raising, take a look at here and here.

Here is an interesting example of a technology transfer case.

Original answer

They do, in fact, have increased the share of R&D spending by a huge margin in the past 5 years. Some of these countries see commerce, trade and tourism as more central to their development than other aspects of development.

The number of Arab students on government scholarship in the West has been on the rise and many western universities have opened branches in the Middle East, especially in the Gulf countries. In the past, only the rich kids of Arabs were able to go to universities in the West. By default, these kids, did not bother working as scientists or educators, they, probably, stayed in the west or became entrepreneurs.

Today, with the help of government scholarships, the ordinary folks can send their kids for education, and hopefully, these kids will bring the science to the other ordinary folks in their respective countries. Remember, technological shock is not so fast and abrupt as we assume in the models, it take decades to have a measurable effect in practice.

As younger 'kings' and 'princes' are involved in politics, there are signs of greater investment in education and science.

Here is the chart of R&D spending to GDP ratios in the Gulf countries.

In the countries, where younger generation have more say in politics, there the spending on R&D has been higher than in those where older 'kings' rule. See the chart, Qatar and UAE have had higher R&D shares, but the data is limited for these countries.

Answer 2

There is a great deal to consider when discussing resource rich countries. Countries that rely on a single sector have less diverse economies, which can lead to a number of issues (especially if the price of a particular resource drops).

Additionally, resource rich countries tend to have unstable governments, which makes it difficult to diversify and grow the economy. Some of these governments are dictatorships and some are run by those who are wealthy as a result of having a stake in the resource. These particular issues tend to spawn corruption and abuses in a way that is not usually seen in other governments.

Of course these are broad generalizations, but they are important.

To address your question specifically, I would suggest that there is a reliance on foreign contractors because the necessary skills are not in abundance within the country itself. Since the countries rely on a single resource, most jobs and education are tied to the resource, which means limited available skills. Additionally, if one of these countries wants to develop technologies within the country, it would need to import tons of resources, probably more so than other countries that have multiple resources. My guess is that at this time, importing technologies is more efficient.

This isn't to say that gulf countries don't invest in R&D, they do. It just looks different than in other countries.

Answer 3

Oil-rich country "resource curse" is merely symptoms, not the root cause of the poor R&D. It is a fallacy once you inspect the fact: US, Russia are both oil-rich country.

Technologies advancement is a culture of a collective and organic development process, a stable society(that doesn't burn and kill the scientist), critical thinking (breakthrough that will overthrow the previous finding), motivation incentive and lots of available wells trained "manpower" on the field, government policies on fundamental science.

Just look into human history, you will notice there is little progress in technology until the 18-century industrial revolutions: it is the synergy of all the above factors that lead the technologies boom.

Now take any gulf oil exporting countries and compare facts in the checklist, you will find there is a huge gap of each factor when compared to technologies advanced country. First, suppression of female rights, cut the science production to half (FYI, lots of modern scientific breakthrough are from the female scientist). Lack of top-notch scientist (as guidance), challenging cultures and persistency (many scientists that win nobles prize have their papers rejected by prominent science paper). Such countries government also lack the vision to invest in fundamental science.