From hydrocarbons to a knowledge-based economy in Qatar
Ever since I moved to the region, the “knowledge-based” economy has been a common buzzword. Everyone talks about it — especially ever since the drop in oil prices. For this reason, I often approach the subject with some hesitance, and a healthy dose of cynicism.
Its true meaning can be difficult to pin down. But these questions will not go away. In fact, they will only become more pressing in the years to come. A future with depleted oil and gas reserves, or diminished values for these hydrocarbons, is not so far away.
For this reason, I believe it is important for us to understand what we really mean when we talk about the knowledge-based economy.
I base my definition on two assumptions:
1. The main aim is to create economic opportunities for citizens. These opportunities should maintain — or even exceed — the standards of living people currently enjoy under the existing “hydrocarbon-based economy”
2. That “knowledge” on its own is not the main goal, but rather the goal is continued economic prosperity. What is important is the search for the types of knowledge that lead to economic opportunities that can become the substitute for the wealth creation of hydrocarbons.
On this basis, what types of knowledge should governments be advocating? Which programs are worthy of investment? Should we be supporting education, infrastructure, technology, or all of the above?
In Qatar, these are the questions we try to answer every day.
Today, financiers, management consultants, product innovation professionals, lawyers, and doctors command the highest professional salaries. The high-income jobs of tomorrow are much harder to predict.
It can be instructive to also look at other hydrocarbon-based economies. Yet a hydrocarbon-based economy like Russia, with a population approaching 150 million people, is very different from a country like Qatar, with a population of two million people — the majority of whom are not citizens.
I believe that small countries with low populations must focus their energies on a few areas, and become highly competitive in those fields. When it comes to careers, the goal is to seek the types of opportunities that will yield an income that matches or exceeds our current standard of living.
Here in Qatar we enjoy a number of competitive advantages. First, we have accumulated significant capital. Second, we have invested heavily in research and development of the past decade. And finally, that the energy industry is still a major factor in our economy.
In view of this, here is my blueprint for building a knowledge-based economy for small hydrocarbon-based countries, such as Qatar.
1. Invest in building talent and know-how in financial asset management. These are the skills we need to deploy capital to maximize returns.
2. Invest in building product innovation capacity. These are the skills we need to commercialize research and development, and create commercially viable tech-based businesses. These businesses generate the highest profit per employee and can become a good substitute for producing similar standards of living that Qatar enjoyed recently.
3. Invest in building sustainable expertise and partnerships in the global energy markets. These are the skills we need to stay up-to-date with industry trends and networks. To be clear, this is expertise in the overall energy market, not just oil and gas. We may reduce our reliance hydrocarbons, but our dependence on energy will be with us forever.
4. Invest in information technology. Energy, like every industry, will be disrupted by artificial intelligence, virtual reality, and data science. The intersection of Information technology and the energy sector promises interesting opportunities in the future
If we put the four groups above together — financial asset managers + product innovators + IT specialists + energy industry experts — we can create an economy based on continuous innovation in the energy industry.
Of course, small countries like Qatar will still need doctors, artists, and teachers. We must continue to grow these professions. But if our goal is to maintain a standard of living in the future that exceeds the one we have today, we must redouble our efforts in those fields that will best help us reach our ambitions.
ps. This post is based on a blog post I published previosuly on Linkedin: https://www.linkedin.com/pulse/from-hydrocarbon-based-knowledge-based-maher-hakim/