The Knowledge-Based Economy and the Failure of the Arab Dream: What the !#%@ Happened?

Abstract

This paper argues that the Arab countries are pursing knowledge-based economic development based on flawed practices from countries perceived to have made successful transitions to knowledge-based economies. Many of the archetypal models of the knowledge-based economy transition, such as the US and Ireland, face substantial economic development problems, such as record high youth unemployment rates, with tremendous societal implications The importation of the knowledge economy concept to the Arab region was accompanied by an emphasis on the welfare of individuals being tied directly to their success in gaining and maintaining higher qualifications and skills which could be sold in the labor market to match high wage employment opportunities expected to be generated by emerging high skill, knowledge-based industries. However, the high wage, high skills jobs associated with knowledge-based industries have not materialized in the region and are increasingly subject to competition from the emergence of low wage, high skill workers in other developing countries. The failure of Arab economies to deliver on the livelihood generating promises of knowledge-based development have caused economic frustrations which catalyzed the Arab Spring.