Abstract
This paper studies the local perspective on innovation and entrepreneurship in the resource-based state of Qatar. The effective utilization of abundant natural resources (oil and gas) have propelled the country’s rapid economic development over the last four decades. However, accelerating decarbonization efforts of the global energy system due to climate change put the future value of these hydrocarbon resources into doubt and hence the country’s revenue streams from international trade. Rapidly growing the local population adds further pressure to the social welfare system amid dwindling oil and gas revenues for the state. The argument for economic diversification and theoretical foundations of innovation and entrepreneurship in a resource-rich state are discussed. A survey to measure the attitude of the residents in Qatar towards innovation and state-led initiatives is prepared and conducted with people living in the country. The analysis of the survey shows that Qatari residents are relatively risk-averse and state-dependent in their pursuit of new entrepreneurial opportunities. We identify three possible reasons for such an outcome; they are, (1) the country’s unique economic structure (natural resource-based), (2) demographic structure (expatriates vs. citizens), and (3) lack of previous experience in innovation and entrepreneurship (path dependency) in a relatively young country. The country’s spectacular success in the last three decades has become its Achilles-heel in decoupling the current economy away from hydrocarbon dependence.
Highlights
A Resource-Based State and Economic DiversificationThe Case of QatarSome countries in the world are blessed with abundant natural resources such as emeralds, gold, or oil and gas
Kuwait, Oman, Saudi Arabia Qatar, and the United Arab Emirates (UAE) had formed the Gulf Cooperation Council (GCC) where revenues from oil and gas industries have dominated those economies since the 1970s after utilization of the natural hydrocarbon resources [11]
This paper focuses on the economic diversification in the GCC state of Qatar by analyzing the perspective of citizens and residents towards innovation and entrepreneurship
Summary
Some countries in the world are blessed with abundant natural resources such as emeralds, gold, or oil and gas. A significant amount of innovation occurs through upgrading the current systems or industrial processes and is known as incremental (evolutionary) innovation where existing skilled labor, the culture, and organization capacity (ecosystem) feed each other continuously [60] This surely gives a great advantage to the industrialized and highly diversified countries (economies or industries) for further economic expansion and development [57]. For the GCC states, a transfer of some local population to entrepreneurship from the government-related workforce means less burden on public finances (lower fiscal breakeven oil prices as opposed to Figure 4) and better service to the remaining population [23]
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