INNOVATION AND ECONOMIC DIVERSIFICATION INDICATORS – A COMPARATIVE ANALYSIS AMONG GCC COUNTRIES WITH A SPECIAL FOCUS ON SULTANATE OF OMAN

Abstract

Many empirical studies in developing economies suggest that economic diversification is indispensable for sustained economic growth. It is also suggested by studies that economic diversification of a country can be influenced by upgrading the capabilities of companies, scientists, regions which will empower them to innovate and create new products, processes and organizational structures. Hence, innovation and economic diversification are inter-related. It is observed that long run economic development is driven by creative processes. More diversified economy is capable of handling economic shocks or decline of a sector. Economies with a varied set of sectors leads to become more democratic, as different economic groups gain in creative, economic and political power. If the growth of an economy is merely driven by efficiency, not innovation, it leads to reduction of employment due to routines and replacement of humans by machines GCC countries are oil dependent economies working hard to diversify their economies. Sultanate of Oman is one among GCC countries working with same principle and approach. GCC countries have been investing heavily in infrastructure and human development in order to make their economic diversification and innovation strategies to get implemented better. Access to finance is one of the key areas that must be focused well in order to realize the economic diversification and innovation goals of an economy. This has been well perceived by GCC countries. Overall, GCC countries have been move ahead in economic diversification and innovation through its policies and prioritization, which economic indicators clearly vouch. In this context, this paper intends to investigate the status of Innovation and Economic diversification across GCC countries with a special focus on Sultanate of Oman