case study on knowledge transfer to jordan 2012 bsaiso r

Knowledge Economy (KE) for

Growth and Employment in the

MENA Region

Case Study on Knowledge Transfer (KT) to Jordan

Consultant

Reem N. Bsaiso

EIB PJ Contract CC4459/PO43610

Case Study on Knowledge Transfer to Jordan

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Table of Content

Table of Content ............................................................................ Page 2

Acronyms ....................................................................................... Page 3

Tables & Figures ........................................................................... Page 4

1. Identification of Key Drivers and Enablers for Knowledge Transfers and

Absorption in International Literature ....................................... Page 5

(1500 words)

2. Situational Analysis of The Knowledge Transfer Channels in the MENA

and Recommendations .................................................................. Page 9

(1500 words)

3. Deduction and Assimilation Based on Findings & Enabling Factors for

Knowledge Transfer in Jordan (A Case Study) ........................... Page 16

(4000 words)

- Executive Summary .......................................................... Page 16

- Jordan Case Study ............................................................ Page 17

- Gaps ................................................................................... Page 31

- Recommendations ............................................................. Page 32

4. Acknowledgements ....................................................................... Page 34


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CBJ: Central Bank of Jordan DoS: Department of Statistics FDI: Foreign Direct Investment FET: Fulltime equivalent GoJ: Government of Jordan GERD: Gross Domestic Expenditure on Research and Development ICT: Information and Communications Technology IPR: Intellectual Property Rights. JD: Jordanian Dinars JIB: Jordan Investment Board KE: Knowledge Economy MoICT: Ministry of Planning ICT MoPIC: Ministry of Planning and International Cooperation PWD: People with Disabilities R&D: Research and Development RDI: Research, Development and Innovation S&T: Science and Technology

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Acronyms


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Tables and Figures

International

Note (1) FDI Enablers

MENA Table (1) Inward FDI Table (2) Outward FDI Figure (1) KE Values Figure (2) KE Index Figure (3) Public Education Expenditures Figure (4) PCs, Mobiles & Broadband Figure (5) Tunisia - Trade Flows in ICT Goods Figure (6) Egypt - Trade flows in ICT goods Figure (7) Jordan- Trade flows in ICT goods

Jordan

Table (3) Economic Indicators Table (4) Budgetary Central Government Table (5) Sectors contribution to GDP Table (6) Population Employment Table (7) Int. Students Mobility Table (8) Int. Students Mobility per Host Figure (8) Central Government Budget Figure (9) Trade Relationships Figure (10) Bilateral Trade Figure (10) Bilateral Trade Figure (11) FDI Inflows and Outflows Figure (12) Investment Projects Figure (13) Global Competitiveness Index Figure (14) Students Distribution Figure (15) Jordanian Students in Higher Education Note (2) Doing Business Note (3) Justice, Natural Resources Note (4) Madrasati School Initiative Note (5) King Abdulla Awards Note (6) iPARK Note (7) ICT4D Note (8) Yahoo Acquires Maktoob

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1. Identification of key drivers and enablers for knowledge transfers and

absorption in International Literature |Back|

Today's global economy is one in transition to a knowledge economy (KE)1 focused on the

production and management of knowledge where knowledge is a product; using

knowledge technologies where knowledge is a tool, to produce economic growth and job

creation. Within interconnectivity and globalization settings, knowledge resources are

as critical as economic resources and the application of knowledge is key for growth;

where organizations and people acquire, create, disseminate and use knowledge more

effectively for greater economic and social development. The knowledge revolution

incorporates education, life-long learning, science & technology (S&T), innovation and

increased investment in R&D – more than in fixed capital, supported by ICT. Making

effective use of knowledge in any country requires developing appropriate policies,

institutions, investments and coordination across KE pillars, such as those suggested by

World Bank hereunder, to articulate strategies towards KE.

Socio-Economic Regime: an economic and institutional regime that provides

incentives for the efficient use of existing and new knowledge and the flourishing of

entrepreneurship.

Education: an educated and skilled population that can create, share and use

knowledge well.

Innovation: an efficient innovation system of firms, research centres, universities,

think-tanks, consultants and other organizations that can tap into the growing stock

of global knowledge, assimilate and adapt it to local needs and create new technology.

ICT Infrastructure: that can facilitate effective communication, dissemination and

processing of information2.

Alongside the same vision, the EIB has been financing investment in development,

education, research, innovation and ICT since 2000, for the establishment of a

competitive, innovative and knowledge-based society, capable of sustainable growth,

creation of jobs and greater social cohesion, in addition to supporting entrepreneurship

and transfer of technologies, essential for RDI and progress3.

In light of the dominancy of knowledge in post-industrial turned KE society; residing in

organizations, tools, tasks and networks; knowledge transfer (KT)4 has become essential

in organizing, creating and disseminating tacit knowledge within national models of

advanced economies and policies, from resource-based to knowledge-based production5.

It is also defined as a process by which innovation is communicated through KT

channels over time in socio-economic systems, as KT orients growth policies through

increased knowledge content and innovation, heightened by inter-linkages and

knowledge absorption (KA). Transfer channels include “individuals”; “ICT” such as the

internet, e-portals, networks, software and linkages to academia; “processes” such as

licensing, standardization, competitive awards, applications; and “transactions” such as

FDI, trade, research and producer-consumer bi-directional KT. Foreign direct

investment (FDI) and international trade in goods and services are two major cross-

border channels for technology transfer; together with linkages among educational,

1 http://en.wikipedia.org/wiki/Knowledge_economy 2 World Bank 3 http://www.eib.org/about/events/conference-in-economics-finance-2009.htm 4 http://en.wikipedia.org/wiki/Knowledge_transfer#cite_note-Argote_Ingram_2000-0 5 OECD (1999), Managing National Innovation Systems, OECD Publications Service, Paris

http://www.eib.org/about/events/conference-in-economics-finance-2009.htm


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research and international communities, ICT and migration (e.g. diasporas). Through

these channels, information flow and spillovers are enhanced through foreign

investment and trade equipment, goods, imports; expatriates, training, mobility,

agreements and affiliation, inclusive reverse technology transfer or outward FDI.

Suppliers provide new equipment as new knowledge for product enhancement through

transfer channels, e.g. 27% of innovation expenditures in Germany come from

equipment service delivery. Other spillovers and enablers include special projects,

consultancies and special processes such as licensing or national competitions, emitting

out of positive impact of knowledge between individuals within an organization that

produces goods or services internally, or externally (outside the organization).

An individual, group, firm or nation’s ability to recognize the value of new information,

assimilate it and apply it to commercial ends and in businesses, has been defined as the

absorptive capacity, an enabler of innovation, based on developing cumulative

absorptive capacity (Cohen and Levinthal 1990) and investment in R&D. The absorption

capacity is key in KT and accumulation, as individuals, firms and countries absorb,

learn and implement technologies and practices, while effectively using / customizing

their acquired knowledge. The assimilation process of external knowledge often leads to

self-learning, analytical thinking and problem solving. Dissemination and nationwide

scaling up is enabled by intrinsic and innovative efforts of investment in R&D by firms

to create new knowledge and products. The national absorptive capacity and knowledge

stock accumulation resultant from existing and new knowledge are enhanced through

exogenous factors - namely the influx of international skills and experiences, and

endogenous factors – namely the human capitol, trade and FDI channels, in addition to

R&D absorption, innovative systems and S&T. This integration of local resources with

technological opportunities promotes production and growth. Prior knowledge,

technological knowledge and capabilities that interact with human capitol and economic

public, private and civic sector actors, are all enablers of absorptive capacities.

Policies & Socio-Economic Regimes

● Effective use of knowledge is based on appropriate coordinated policies and

institutions within supportive legislative frameworks6 to articulate transitional and

long term KE strategies.

● FDI and international trade are major channels highly affected by macroeconomic

policies through which technological knowledge developed in one country transfers to

another (Saggi, Keller & Pantia)7.

● Liberal trade and investment regimes are major enablers of KT in domestic

economies, aided by new technologies and skills.

● Indictors and enablers of FDI facilitate competitiveness among countries and support

investment policies reforms [Note 1].

● Minimum needed absorptive capacities enable FDI to achieve higher productivity, as

self-learners boost this capacity, aided by past industrialization experiences.

● KT channels highly impact firms that exert intrinsic technological efforts resulting in

R&D accumulation, innovative performance and new products.

● Business activities are enabled through market size, workforce skills, operational and

insolvency procedures and security.

● The ease of starting a business, another KT enabler, is achieved through economic

policies, enhanced business environment, local competition, openness to trade and

investment, market flexibility and bi-directional producer-consumer KT channels

6 UNDP AHR 2003, AKR 2009 7 Saggi, 2002; Keller, 2004 and Kneller, Pantea and Upward, 2009


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(Cowan, Soete and Tchervonnaya, 2001), all of which increase KA in addition to IPR

protection, standardization, taxation, incentives, subsidies for innovation and

linkages with main stakeholders.

● Within technological opportunities, firms are great mediums for absorption as

available internal and external resources and knowledge are assimilated.

Investigative processes yield technological- and self-learning, which together with

technological knowledge, R&D and innovative performance create new products and

production growth.

● Decentralized flat organizational structures and practices, with participatory

disciplines and information-sharing through ICT are enhancive to KA.

● E-services enable KT through various channels by improved accessibility and usage of

new and relevant knowledge8, reliant on IPR and trademarks, as opposed to the

patents-reliant manufacturing sector. The Netherlands succeeded in putting e-

services on an equal footing with manufacturing, leading to innovative policies. The

eBay, Google and Yahoo market value exceed $200 B.

● Manufacturing increase competitiveness, promotes innovation-driven growth and

higher employment9, yet as it creates jobs, it might come at a price of economic

inequity, urbanization, pollution and environmental degradation10.

8 http://www.merit.unu.edu/publications/rmpdf/2001/rm2001-021.pdf / Knowledge Transfer and the Services Sector in the Context of the New

Economy by Robin Cowan, Luc Soete & Oxana Tchervonnaya - 2001-2021 9 http://go.worldbank.org/5HRC2LA230 10 http://www.merit.unu.edu/publications/rmpdf/2001/rm2001-021.pdf / Knowledge Transfer and the Services Sector in the Context of the New

Economy by Robin Cowan, Luc Soete & Oxana Tchervonnaya - 2001-2021

Note (1) FDI Enablers

Indicator Indicator Details Enablers Target audience Doing Business-type indicators of investment policy

Starting a business Dealing with licenses Employing workers Registering property Getting credit Protecting investors Paying taxes Trading across borders Enforcing contracts Closing a business

Foreign ownership restrictions

Investment promotion Pre-establishment procedures

Access to land Currency convertibility and repatriation

Expropriation and int’l arbitration

Governments to target, stimulate, implement and communicate investment policy reforms Investors to help guide their investment location decisions and policy dialogue with governments Advisors / Consultants to focus their assistance to client countries on key policy-level constraints to increasing FDI competitiveness

Country benchmarks for the ease of establishment and operation of a foreign owned business in a country

• Employment restrictions on expatriates • IPR protection and enforcement • ADR mechanisms • Excluded investment climate variables: • Infrastructure • Human resources • Trade policy

Measures of formal statutory restrictions on FDI, and regulatory and administrative barriers in practice.

Survey of laws/regulations (objective info) and administrative processes (subjective info)

Respondents are private sector, intermediaries (investment lawyers, consultants, accountants, ...)

Survey filled out by governments for validation / cross-checking purposes

Source: Global Forum on International Investment, 20081

http://www.merit.unu.edu/publications/rmpdf/2001/rm2001-021.pdf%20/

http://go.worldbank.org/5HRC2LA230

http://www.merit.unu.edu/publications/rmpdf/2001/rm2001-021.pdf%20/


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Education and Human Capital

● Education enables technological changes and prepares KE human capital.

● ICT-based education reforms are slow to exhibit impact. Creation of human capital is

staged towards capital deepening (knowledge acquisition), high quality labour

(knowledge deepening) where workers contribute to a country’s ability to absorb and

apply technologies; towards knowledge creation and innovation (Kozma 2007)11.

● Higher education is addressing new demands and supplies, merging ICT and

instilling lifelong learning.

● Scientific research and innovation extend outside academia into developmental and

knowledge production systems.

● Human capital bi-directional mobility is a channel were humans carry tacit

knowledge across institutes; it includes different types of diasporas. Mobility and

research play an important role in KT (Teichler and Yagci).

● Brain drain is often described as loss of investment through outflow. Brain

circulation, in contrast, looks into brain drain as a “return” in terms of remitted

results of outflows (Knight 2007).

Innovation, S&T and R&D

● Innovation is a key enabler of KT and KA across sectors and borders, enabled by S&T

and R&D.

● S&T, as a tool of innovation and scientific cooperation in education and research, is

supported by state incentives and international cooperation, where reaching critical

mass (human resources) is of the essence.

● Domestic RDI, openness of academic research and patents create new knowledge,

highly skilled humans, new product markets, quality assurance mechanisms,

networking, interactive learning, entrepreneurship, innovative organizations and

commercialization of knowledge.

● R&D is promoted through acquisition (based on R&D experience), assimilation

(patents, citations, research publications...), transformation (new products ideas and

research projects), exploitation capabilities (announced products, development cycle);

and cater for diverse markets and societies.

● Institutional linkages with academia, industry, services and businesses lead to

effective diffusion of innovation.

● Entrepreneurship - in the presence of institutional empowerment, domestic and

foreign capabilities, where innovation impacts growth - is measurable based on

resource efficiency and competitive economies.

ICT Infrastructure

● The ICT Infrastructure is a dynamic key enabler for KT and communications channel

that disseminates and processes information.

● It is conducive to formation of producer-user, producer-producer and consumer-

consumer networks that generate considerable knowledge spillovers to service

industry and society.

● The impact of ICT is reliant on governing policies, human capital skills, ICT

infrastructure and innovative businesses12.

● ICT supports management information and decision making systems, needing

regular maintenance and updates via skilled human resources.

11 Ref. ICT, Education Reform and Economic Development, Dr. Robert Kozma, Oct. 2007, Dead Sea, Jordan 12 Measuring the Impacts of ICT for Development. UN Conference on Trade & Development


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2. Situational analysis of the KT channels in the MENA, impediments and

recommendations |Back|

Developing countries are facing challenges in attaining knowledge-empowered systems,

failing to tap the vast and growing stock of knowledge because of limited awareness,

poor economic incentive regimes and weak institutions, thus increasing the knowledge

divide between them and countries that are generating most of this knowledge amidst

increasing international competition emitting out of a combined trade policy

liberalization and knowledge revolution that challenge natural resources and low labour

costs advantages most developing countries had relied, or still relying on. A widening

knowledge gap with industrialized countries is attributed to lack of innovative

capabilities, R&D, scientific articles, patents and inequality in internet accessibility.

Policy & Socio-Economic Regimes

● MENA countries are taking the low-road approach to economic development13 in

response to global competitive pressures, disregarding labour or environmental

regulations and perpetuating social inequities.

● MENA failed to reach economic convergence with developed countries as its GDP

hovers around 8% that of N. America, with high unemployment of 24.4% specially

among females.

● Only 1% of manufactured exports are classified as high-technology and R&D-

intensive.

● The Arab world falls short on most of the KE indicators, namely GDP growth,

poverty, tariff and non-tariff barriers, regulatory quality, rule of law, royalty &

license fees payments & receipts, S&T journal articles, granted patents, adult literacy

rate, secondary & tertiary enrolment, telephone, computers and internet penetration

[Figure 1].

● Low political stability, risk-prone and investment-inhibitive region to foreign

investors.

● The region is underperforming in fighting corruption, adversely affecting investors

confidence.

● Regional economies, productivity and competitiveness are challenged in shifting

towards a knowledge economy harbouring main knowledge transfer channels, namely

FDI and international trade, developed education for readiness to knowledge, skilled

and productive workforce, fostering innovation and making full use ICT in

development.

● The region’s share in global FDI inflows and cross-border mergers and acquisitions

was 16% of the developing countries’ share and 4.8% of the global share (2006).

● Inter-Arab investment flows are shown in [Tables 1 and 2] of both sending and

receiving countries or inward and outward FDI flows, using panel data of Arab

countries14.

● The quality of the institutional framework is a handicap for FDI inflows, causing

investor hesitation.

● The region remains relatively closed, high on the Trade Restrictiveness Index with

less than 1% of world exports (excluding oil), lack of facilitation (28 days for customs

procedures against 12 days in OECD), mediocre transport infrastructures and

logistics performances.

13 UNIDO report 2003 14 An augmented gravity model was used based on Standard Gravity Variables (distance, income and population, congruity and other dummies)


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Figure (1)

Knowledge

Economy

Values

Source: KE

Report, WB

Database,

Knowledge

Assessment

Methodology

KAM)

Table (2) Outward FDI Flows $M, Current Prices & Exchange Rates 2000-2010 (Sorted & Rounded 2010) Year 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

S. Arabia 1,550 46 2,020 473 79 -350 -39 -135 3,498 2,177 3,907 Kuwait -303 -242 -77 -4,960 2,581 5,142 8,211 9,784 9,091 8,636 2,069 UAE 424 214 441 991 2,208 3,750 10,892 14,568 15,820 2,723 2,015 Qatar 18 17 -21 88 438 352 127 5,160 6,029 11,584 1,863 Egypt 51 12 28 21 159 92 148 665 1,920 571 1,176 Morocco 59 97 28 12 31 75 445 622 485 470 576 Lebanon 108 1 0 611 827 715 875 848 987 1,126 574 Tunisia 2 6 6 5 4 13 33 20 42 77 74 Yemen -9 1 39 61 21 65 56 54 66 66 70 Jordan 9 32 14 -4 18 163 -138 48 13 72 28 Palestinian 213 377 360 49 -46 13 125 -8 -8 -15 -11

Source: UNCTAD, UNCTADstat

Table (1) Inward FDI Flows $M Current Prices & Exchange Rates, 2000-2010 (Sorted & Rounded 2010) Year 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

S. Arabia 183 504 453 778 1,942 12,097 17,140 22,821 38,151 32,100 28,105 Egypt 1,235 510 647 237 2,157 5,376 10,043 11,578 9,495 6,712 6,386 Qatar 252 296 624 625 1,199 2,500 3,500 4,700 3,779 8,125 5,534 Lebanon 964 1,451 1,336 2,860 2,484 3,321 3,132 3,376 4,333 4,804 4,955 UAE -506 1,184 95 4,256 10,004 10,900 12,806 14,187 13,724 4,003 3,948 Jordan 913 274 238 547 937 1,984 3,544 2,622 2,829 2,430 1,704 Tunisia 779 487 821 584 639 783 3,308 1,616 2,758 1,688 1,513 Morocco 422 2,808 481 2,314 895 1,654 2,449 2,805 2,487 1,952 1,304 Palestinian 62 19 9 18 49 47 19 a28 52 265 115 Kuwait 16 -176 4 -67 24 234 121 112 -6 1,114 81 Yemen 6 136 102 6 144 -302 1,121 917 1,555 129 -329

Source: UNCTAD, UNCTADstat


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Education And Human Capital

● The challenge facing Arab Human Capital (Wes Schwalje)15 is the growing need for

converging human capital development policies towards KE [Figure 2] at a time

economic policies are impaired to varying degrees due to lack of transparency and

accountability16.

● Getting Arab Youth into Employment17 is a major challenge (Tom Speechley)18, where

25% of some populations who are under the age of 26 are unemployed.

● Youth unemployment economic loss exceeds $40–50 billion annually. There is a need

for 51 million new jobs by the end of 202019.

● There is a mismatch between human capital investments and private sector needs

due to the quantity and quality of human capital attributed to education and training

systems. “Regardless of how the impact of investment in education in the MENA

region is evaluated ... it was not associated with higher economic growth or

appreciable gains in growth compared to East Asia and Latin America”, (World

Bank).

● Arab States devote higher expenditures on education than other governments20

[Figure 3].

● Human capital mobility through migration of Arab post-graduate students to Europe

and USA is seen as an enhancer of KT. Brain drain in MENA has repercussions due

to lack of incentives and favourable environments to encourage the return or

engagement of migrant Arab post-graduates21. Mobile students from Arab States

were 3% of the tertiary-enrolled students22.

Figure (2) Index Values for the Pillars of KE for Arab Countries, G7 and the World

Source: WB Database KAM

15 Wes Schwalje, LSE, UK 16 Henry and Springborg 2011 17 Getting the Arab Youth into Employment by Tom Speechley, January 14, 2012 http://www.wamda.com/2012/01/getting-the-arab-youth-into-

employment 18 CEO of Abraj 19 UNDP 2009 20 Development, Education and Finance. Analysis of debt swap for social investment as an extra-budgetary education financing instrument. By Senator

Diego Filmus – Esteban Serrani. 21 The “National, Regional and Global Perspectives of Higher Education and Science Policies in the Arab Region” Minerva: A Review of Science,

Learning and Policy, Springer, December 2011 Minerva, Springer, Germany, December, Vol. 49, No. 4, December 2011, pp. 387-423 - Minerva 2011

22 Ref. Higher Education, Research and Innovation: Changing Dynamics Report on the UNESCO Forum on Higher Education, Research and Knowledge 2001-2009 - UNESCO 2009

http://www.wamda.com/tomspeechley

http://www.wamda.com/2012/01/getting-the-arab-youth-into-employment

http://www.wamda.com/2012/01/getting-the-arab-youth-into-employment


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Figure (3) Total Public Education Expenditures

Source: EFA Global Monitoring Report 2008


● MENA countries are knowledge-importing countries with limited resources that need

high-priced technology from knowledge exporting countries, incur IP costs,

technology pricing and monopoly.

● The average government expenditure on R&D in the Arab States is around 1.5%

compared to 2.5 % at OECD and 18% in Japan23.

● Research at universities is challenged by equity, quality, relevance, ownership,

networking, absence of S&T governance mechanisms, weak politics, and a low critical

mass of FTE researchers, low number of patents and poor commercialization funds.

● Impeded transfer channels restrict regional and global mobility of scientists.

● Technology transfer units at universities face institutional difficulties due to

mismanagement in technology transfers.

● Intellectual property regimes are weak, providing little protection for the output of

scientists.

● Lack of typical innovation features.

ICT infrastructure

● Weak connectivity and accessibility, particularly among the poor. Low online Arabic

content; according to Google, out of the 300 million nation, only 10% comprise online

visitors. [Figure 4] shows mobile and broadband subscribers and PC owners.

● Bilateral trade flows by ICT goods categories are shown in [Figures 5-7 ] for Tunisia,

Egypt and Jordan.

23 Ramirez 2008, El Kaffass 2007

0

5

10

15

20

25

30

Total public education expenditures as % GNP

Total public education expenditure as % of total government spending

Source EFA Global Monitoring Report 2008


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Figure (4) MENA Statistics on PCs, Mobiles & Broadband

2009 (WBG 2011)

Figure (5) Tunisia - Trade Flows in ICT Goods (2008 - 2010) UNCTAD

Figure (6) Egypt - Trade flows in ICT goods (2008 - 2010) UNCTAD

Mobile subscribers

Fixed broadband subscribers

PC owners

MENA 67.40% 2% 5.70%

High-income countries 123.20% 26.90% 56.00%

0.00%

20.00%

40.00%

60.00%

80.00%

100.00%

120.00%

140.00%

Pe

rce

nt

(%)

Total ICT goods

Computers & peripheral equipment

Communication equipment

Consumer electronic equipment

Electronic components

Miscellaneous

2008 746.26 118.9 236.43 216.02 167.52 7.39

2009 673.65 85.06 246.94 194.61 137.99 9.05

2010 1,072.03 54.11 407.24 408.48 193.79 8.4

0

200

400

600

800

1000

1200

USD

M

Total ICT goods





Miscellaneous

2008 88 10.45 6.74 6.81 62.99 1

2009 40.24 13.78 10.93 7.29 7.8 0.44

2010 35.56 13.74 8.96 6.36 5.12 1.38

0

10

20

30

40

50

60

70

80

90

100

US

D M


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Figure (7) Jordan- Trade flows in ICT goods (2008 - 2010) UNCTAD

Recommendations on the MENA level

Arab countries live in a density disparity zone, where knowledge density is higher on

the outside than on the inside and pretty much like “osmosis” there is a need for

knowledge influx to create equilibrium and bi-directional exchange, namely through

direct economic action (FDI, foreign trade, ease of staring business, globalization, open

trade, standardization and competitiveness), as an immediate action for short-term

impact; with mid-term goals of political, economic and social reforms, in support for KT

through adequate ICT infrastructure and innovative platform nurturing RDI and S&T.

Long-term KE policies are needed to build the in-common and crucial national human

capitol gaining ICT-based KE and entrepreneurship skills for knowledge creation and

production.

Policies & Socio-Economic Action

● Mobilize coordinated national policies, strategies and legislation towards economic

growth and job creation by adopting an integrated KE model across socio-economic

regimes, education & human capital, innovation (R&D & S&T) and ICT

infrastructure, boosting KT and absorption capacity.

● Accommodate regulative processes to macroeconomic conditions, market size,

workforce skills and security, through reforms to include price liberalization,

macroeconomic stabilization and daily economic activity focus.

● Promote foreign direct investment (FDI) and international trade, as two major

channels for international technology transfer (for the recipient), and source of

income for innovation (for the supplier) for cross-border technological KT.

● Support manufacturing and e-services towards increased KT across economy pillars

to boost FDI and international trade.

● Enhance business regulations and environment, focusing on the ease of doing

business and IPR protection.

● Increase the absorptive capacity and innovation in business by investing in R&D.

● Promote private sector participation in investment for job creation and improved

productivity.

Total ICT goods





Miscellaneous

2008 293.33 39.51 226.26 18.65 0.39 8.51

2009 99.18 36.94 46.03 12.13 0.29 3.79

2010 90.88 22.5 38.58 9.17 3.36 17.26

0

50

100

150

200

250

300

350

US

D M


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● Combat environmental deterioration, protect natural resources, locate innovative

alterative and renewable energies. Mitigate water-scarcity and environment-pro

human behaviour.

Human Capital & Education

● Promote two dimensional human capital mobility across firms or institutes, as key

KT channel.

● Educate and train human capital through ICT-based training models fostering KE,

entrepreneurship and job creation skills, within reformed systems.

● Promote female participation in employment and self-owned business.

● Enhance higher education policies to meet demands and diversification, and ICT-

based lifelong learning based on social engagement and commercialization of S&T

and RDI.

● Conduct research on the impact of mobility on knowledge; regulate mobility of

academics to serve KT in higher education, quality and research.

Innovation, S&T, R&D

● Create innovation supportive policies within and outside academia, linked to

research, academia and private/civic sectors participation; heightened by competitive

production environments.

● Increase investment in R&D more than in fixed capital.

● Create innovative educational systems and increased absorptive capacities in

business firms based on R&D, S&T capacities, and ICT backbone.

● Increase highly qualified future researchers within openness of research,

patents/copyrights, domestic R&D institutions linkages with industrial, service and

business sectors, for effective diffusion of innovation.

● Support researchers and scientists inward and outward mobility.

ICT Infrastructure

● Invest in national ICT infrastructure and relevant technologies (KT enablers) to

create a facilitative, dynamic and effective communication channel.

● Decrease digital divide through increased accessibility, promotion of effective usage

and expansion of telecommunications markets.

● Apply interlinked and sector-based management information systems.


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3. Deduction and assimilation based on findings & enabling factors for KT in

Jordan (a case study) |Back|

Executive summary

Jordan is a country that has both beauty and potential; a picturestique land of diverse

terrain and climate, rich history and heritage, unexploited resources, friendly and

educated people who are eager to develop and succeed, based on good foundations for

growth and development. Yet, Jordan falls short in key determinants of

competitiveness, highlighted by high public expenditures, further burdened by

responsiveness to Arab Spring, frequent changes in cabinets, weak competitiveness

rankings, energy and water shortages, unexploited mining, tourism, and renewable

energy24. There is lack of knowledge retention, and support to KT, its channels and

enabling environments. Systems seem to lack sturdy coordinative platforms, guided by

KE orientation towards economic growth and job creation, while human resources face

challenges of inadequacy of KE skills, highlighted by high unemployment, particularly

among women. Jordan has an opportunity to improve its competitiveness, amidst

political stability, reliant on employment-relevant education and hosting of enabling and

conductive environments to knowledge transfer and absorption. Jordan can build on its

main knowledge transfer channels (openness to foreign investment and trade) and

enablers for knowledge flow (relatively lower corruption, institutional technological

advancements and in-house capability to absorb technologies), in addition to its well-

educated population, innovation determinants and emerging competitive clusters in

ICT. It has knowledge enablers through sectors and services, such as the medical,

tourism, natural renewable energy resources (wind and solar) sectors, and untapped

human potential (whether employed, seeking employment or economically inactive,

inclusive women).

Jordan’s socio-economic regimes play an important role in promoting absorptive

capacities of knowledge, as poverty and youth unemployment adversely affect KT;

complexity of administrative procedures, fiscal procedures and corruption are further

inhibitors. Although international institutions promote absorption capacity, yet non-

receptive audience or resistance to change are bottlenecks where human capital

readiness is a major KT enabler. Such KT and KA enablers / bottlenecks are attributed

to incidence of tacit and codified knowledge (educational attainment, literacy) and

effectiveness (employment and participation rates, productivity growth, industry value

added, high-tech exports, publications and patents). KT channels are reliant on - and

produced through - educational and academic systems (including research institutions),

tacit knowledge through and among national educational institutions, (foreign) direct

investment, international trade and networks, NGO's and provision of technical

assistance, etc. Free trade zones and business parks are good conductors for KT, in

addition to labour, product market flexibility and immigration (e.g. diasporas) as

economic growth and KT factors. The human capital empowerment, a long-term

objective, is a main KT channel and platform which relies on knowledge holders,

recipients and institutional settings, where knowledge holders regulate the amount and

quality of shared knowledge and recipients need to be ‘receptive’ for flow and absorption

of knowledge. The characteristics of knowledge holders and knowledge recipients are

24 Extracts from the USAID Jordan Economic Growth Assessment - Business Environments for Agile Markets (Beam), prepared by Carana Corporation


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very important for the process of KT. Human capital mobility as a KT channels is based

“carriers” of tacit knowledge, particularly in organized two-dimensional mobility across

firms or institutes. International conferences are important in knowledge-generation

and knowledge-transfer infrastructures in both manufacturing and services, aided by

human exchange of knowledge.

Jordan has achieved economic growth of 3.1%, registered high unemployment (13%),

budget deficit (5.5% GDP), and increased inflation (5%)25. The level of debts exceeded

the permitted maximum of 60% of the GDP. Most of GoJ income comes from taxes and

most of its expenses go to public sector salaries, pensions and compensations. Its GDP

comes from manufacturing (17.8%) followed by net taxes on products. Economic reform

is slow, despite paving good grounds for an investment climate. The energy crises topped

the list of challenges. GoJ was advised by WB not to cut back on capital expenditures,

needed for economic growth. Critics fear further taxations, as they criticize Jordan’s

trade imbalance and question the ‘real’ value of economic growth, some refer to it as the

“jobless growth”.

Jordan’s ranking on international indices lagged behind. Posed challenges covered

public debt, government budget deficit, weak funding through local financial markets,

tax laws, customs procedures, lack of modern technologies in production areas, linking

wages to productivity, diminished usage of modern marketing technologies by

companies, efficiency of management in delegating authorities in corporations,

development of clusters, weak public and private sector institutions in general and the

inability to link international markets to local ones at low costs. Additionally, challenges

resided on the levels of RDI and lack of enablers, weak linkages among scientific

research and the industrial sector, non-effectiveness of IPR legislative protection, low

quality and output of education and declined enrolment rates in secondary education.

Jordan was specially behind in the economic environment and labour market efficiency

indices with significant drops in infrastructure, business environment development and

institutions. Innovation efficiency and scientific research indicators for Jordan were low,

with low expenditure on R&D. The ICT sector lacks regulation as IT usage remains low,

especially among SMEs that regressed on the competitiveness scale. Telecom costs and

PC prices are high, leading to low penetration. KT channels and absorption are

impaired within inhibitive environments, for example, weak educational output effects

levels of creativity and innovation, which is also challenged by lack of IPR and nurturing

environments that support innovation and commercialization leading to economic gain

and job creation.

Jordan’s high unemployment has been heightened by 2 million economically inactive

persons, of same working-age group that no longer seek employment, most of which are

women, lack skills or simply gave up. Guest workers exceed 300,000, as Jordan trades

high-export labour with incoming low-skilled workers. Higher education outcomes lack

soft skills with poor industry-academia linkages. A good portion of Jordan’s mobile

students or scholars never return for lack of favourable conditions.

Jordan case study |Back|

Jordan had not reached knowledge deepening and knowledge production stages

reflective of developed economies that get reflected on the GDP. Little studies on

25 CBJ 2010


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knowledge transfer and knowledge absorption capacities in terms of enablers and

impediments exist. Without undermining Jordan’s enormous achievements on numerous

fronts, the case study focuses on KT enablers and impediments based on Jordan-specific

resources, literature and interviews.

Socio-economic regimes

● Jordan is an upper middle income country, with a population of 6.51 million (2011),

having a 92.1% literacy rate26 and 77% primary, secondary and tertiary enrolment.

The Nominal27 GDP is $21.92 B and per capita GDP is $4,700.

● Jordan’s economic growth was 3.1% in 2010, registering unemployment at 13% –

unofficially cited at 30%, budget deficit at 5.5% GDP, external trade up by 10.5%,

inflation up by 5% due to rise in international markets basic commodities prices. CBJ

reserves surged by 12.5% exceeding $12 B. Outstanding balance of credit facilities

extended by banks increased by 8.5% (mainly to private sector)28.

● The recorded budget deficit (excluding grants) was JD -1,840.2 M; [Table 3] reflects

Jordan’s main economic indicators – inclusive the trade deficit. The summary of the

central government budget [Figure 8], GoJ revenues and expenditures [Table 4] and

sectors contributions to GDP [Table 5] , are shown hereafter, respectively.

● The trade balance deficit was JD – 4,238.1 million, in light of JD 4,063.6 million in

FOB exports, versus JD 8,637.9 million in FOB imports (CBJ). Jordan’s trade volume

with the top 10 partners [Figure 9] shows higher imports than exports (JD 2.5M).

Globally, trade data showed that Jordan’s imports from the world were about $14,000

M, and its exports to the world were about $6,500 M (2009)29. Trading with Arab

countries registered about $ 3,260 M [Figure 10].

● FDI dropped from 706,941,417 in 2009 to 224,109,100 JD in 2010. This means that

the FDI dropped 68.3%, [Figure 11] shows the FDI inflows and outflows in $Million.

● Investment promotion is facilitated through the Jordan Investment Board (JIB),

Jordan Industrial Estates Corporation, Aqaba Special Economic Zone Authority

(ASEZA) and Development Zones Commission. However, existing multiple

regulations and laws governing investment is proving to be confusing to investors.

● Jordan has 260 investment opportunities estimated at $7.6 B (USD)30, in agriculture,

energy, water, and environment sectors; mining, chemicals, plastics, fertilizers,

textiles, ICT, business and logistics services; plus real estate and tourism31.

● Real estate accounted for the highest number of projects totalling 24 [Figure 12]

representing 13% of investment projects, followed by financial and business

services32.

● E-services enablers are lacking, namely the appropriate legislative laws pertaining to

intangible goods and services, heeding similarities yet vivid differences from

manufacturing, to boost KT channels and economic growth, through FDI and DDI.

● Jordan underperformed on the Global Competitiveness Report 2010-2011. All

performance indicators dropped down, save the economic environment one, as

compared to the previous year [Figure 13].

● The WEF Financial Development Index 2010 denoted difficulties in starting a

business, particularly in enforcing contracts and dealing with construction permits33.

The same Index recorded regression in institutional and business environments,

26 Jordan’s Department of Statistics 27 Re USDoS Bureau of Near Eastern Affairs, December 30, 2011 28 CBJ 29 Source: International Trade Center, http://www.trademap.org/ 30 Source: Investment Climate in Arab Nations Report, 2010. 31 Source: Investment Climate in Arab Nations Report, 2010, The Arab Investment & Export Credit Guarantee Corporation 32 FDI Intelligence from Financial Times Ltd) 33 Doing Business Index (IFC)


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financial stability, banking and non-banking financial services, financial markets and

financial access. [Note 2].

● The 2012 Country Scorebook34 denoted shortcomings in areas of ruling justly,

corruption control, economic freedom, investing in people, fiscal policy, regulatory

quality, inflation, natural resource management and expenditures on education.

[Note 3].

● King Abdullah II Centre for Excellence is the national reference for quality and

excellence through its public, private and civic sectors Awards that motivate transfer

channels where KT is a process and enabler to spillovers resulting from impact of

knowledge among individuals and firms. It is a success story, [Note ].

● Transportation comprising an enabling and logistics environment, has been assessed

in terms of competitiveness as expansions are underway for airports and seaport.

● Jordan imports 80% of its needs from the Egyptian natural gas to generate electricity

at the rate of 6.8 M3/day of the imported gas35. The pipes were affected during recent

events, causing $1.5B in damages and further financial burdens.

Table (3) Main Economic Indicators – JD M

Public Finance (Exc. Central Gov. Deposits) 2011 2010 2009 2008 2007

J.-Nov.

Domestic Revenues 3,895.1 4,261.1 4,187.8 4,375.4 3,628.1

Foreign Grants 1101.3 401.7 333.4 718.3 343.4

Current Expenditures ( Commitment basis ) 5,019.8 4,746.6 4,586.0 4,473.4 3,743.9

Capital Expenditures 715.5 961.4 1,444.5 958.5 842.6

Deficit / Surplus (Including Grants) -738.9 -1,045.2 -1,509.3 -338.2 -615.0

Deficit / Surplus (Excluding Grants)) -1,840.2 -1,446.9 -1,842.7 -1,056.5 -958.4

Internal and External Public Debt 2011 2010 2009 2008 2007

Gross Domestic Debt of Central Government Nov.

( Budgetary and Own - Budget Agencies) 9,561 7,980 7,086 5,754 3,695

Trade Balance (Deficit -) -4238.1 -4823.8 -4448.8 -5084.4 -4574.2

Exports F.O.B. 4243.9 4990.1 4526.3 5633.0 4063.6

Imports F.O.B. 8482.0 9813.9 8975.1 10717.4 8637.8

Source: CBJ

Figure (8) Summary of Central Government Budget, 2006 – 2010, JD M

Source: CBJ

Table (4) - Budgetary Central Government, 2010

34 MCC USA Indicators to Millennium Challenge 35 Haidar Al-Qamaz, Al-Rai


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Domestic revenue Public expenditures

General sales tax 46.5% Revenues from selling goods &

services 14%

Military expenditures 29.8% Pensions & compensation 13%

Capital expenditures 16.9% Other expenditures 12.5%

Compensation of employees 15.6% Interest payments & subsidies 12.25%

Other revenues 15.5% Taxes on int. trade &

transactions 6.7%,

Taxes on income & profits 14.7% Other tax revenues 2.1%

Source: Annual Report 2010 - www.cbj.gov.jo

Table (5) - Sectors Contribution to GDP (%) (3rd Q 2011) Sectors Q3 Q3 Sectors Q3 Q3

2010 2011 2010 2011

Manufacturing 17.5 17.8 Community, social &

personal services

4.3 4.3

Net taxes on product 17.5 16.9 Agriculture, hunting,

forestry & fishing

3.2 3.3

Transport, storage & comm. 13.4 13.5 Electricity and water 2.3 2.3

Producers of government services 10.3 10.4 Restaurant and hotels 1.4 1.3

Real estate 9.9 9.9 Mining and quarrying 1.3 1.4

Wholesale and retail trade 9.4 9.4 Domestic services of

households

0.6 0.6

Finance and insurance services 8.6 8.7 Producers of private non-

profit services to

households

0.4 0.4

Construction 5 5 Imputed bank service

charge

-5.1 -5.1

Source: MOPIC

Figure (9) Trade Relationships with its Top 10 JD M (Excluding Re-Exports), Jordan

2009

Jordan Country Fact Sheet - Jib

0

200

400

600

800

1000

1200

1400

%

Imports

Exports

Re-Exports

http://www.cbj.gov.jo/


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2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

Inflow 913.3 273.6 238.2 547 936.8 1984 3544 2622 2829 2430 1704

Outflow 44.3 70.1 83.9 80.3 286.6 449.6 311.6 359.7 382.4 454.8 483.2

0

500

1000

1500

2000

2500

3000

3500

4000

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Jordan FDI US$ - UNCTAD 2010

Figure (10) Bilateral Trade between Jordan and Middle East 2009 (Includes Re-

Exports) – Thousand $

Source : International Trade Center, Http://Www.Trademap.Org/

Figure (11) FDI Inflows and Outflows in $Million

UNCTAD 2010

0

500,000

1,000,000

1,500,000

2,000,000

2,500,000

3,000,000


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Figure (12) Investment Projects per Sector

Source: FDI Intelligence from Financial Times Ltd

Figure (13) Global Competitiveness Index 2010/2011 – Jordan

Source: Global Competitiveness Index 2010/2011

R.Eastate

Financial Serv.

Business Serv.

Hotels & Tourism

Communication

s

Food & Tobacco

IT services

Consumer

Products

Consumer

Electronics

Textiles Other

2006 11 1 1 4 2 3 2 2 6

2007 2 3 1 1 1 2 1 9

2008 6 3 6 2 4 2 1 2 2 6

2009 1 2 4 3 3 2 2 9

2010 9 3 1 3 1 4

0

2

4

6

8

10

12 A

xis

Titl

e

0

20

40

60

80

100

120 Basic Requirement

Institutions

Infrastructure

Economic environment

Health & basic education

Efficiency Enhancers

Higher education & training

Market efficiency Labour market

efficiency

Financial markets dev.

Technological readiness

Market size

Innovation & Sophistication Factors

Business environment development

Innovation

Ranks of Jordan out of 139 countries


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Note (3) Justice

The Judiciary Sector (Formal and Islamic jurisprudence) has deficiencies in numbers of specialized judges, increasing number of cases and weak infrastructure of courts. Overlap between courts, public prosecution and public civil attorney department.

The legislation Sector faces deficiencies in numbers of qualified personnel and absence of training. Lack of coordination with institutions leading to unclear legislative text that meets the needs of all concerned parties

Source: MoPIC Natural Resources

Jordan has limited natural resources

Scarcity of water. Absence of a comprehensive management plan for natural water resources and systems.

Increasing aggression on natural reserves and forests.

Environmental degradation. Weak institutional awareness of environmental safeguards and lack of coordination among the various concerned sectors. Failure to link environmental degradation to the national economy,

Shortage of technical environmental staff in institutions related to natural resources and the environment.

Unexploited mining sector (such as Shale oil, raw minerals, raw nuclear material, solar and wind energies)

Source: MoPIC

Note (2) Doing Business:

Starting a business needs 8 procedures over 13 days at a cost of 50% of income / capital, and min. capital of 20% of income per capital.

Dealing with construction permits needs 19 procedures over 87 days at a cost of 697% of income per capita.

Registering property needs 7 procedures over 21 days at a cost of 7.5% of the property value.

Getting credit is governed a low strength in legal rights (4/10), low depth of credit information (2/6), low public registry coverage at 1% of adults and no private bureau coverage.

Protecting investors has an average extent of disclosure, low extent of director liability 4/10, low ease of shareholder suits 4/10 and low strength of investor protection 4.3/10.

Trading across borders needs 7 documents to export, and 17 days, at a cost of 730 $/container; 7 documents to import, and 19 days, at a cost of 1290 $/container.

Enforcing contracts needs 38 procedures over 689 days, at a cost of 31.2% of the claim (this depends on the efficiency of the judicial system in resolving a commercial dispute)

Closing a business takes 4.3 years, at a recovery rate of 27.3 cents on the dollar and 9% cost of estate.

Source: Ease of Doing Business – Jordan (WB-IFC).

Taxes

Paying taxes covers 101 days, needing 26 tax payments. Profit tax is 14.3%, labour tax and contributions is 12.4%, other taxes are 4.4% and the total tax rate is 31.1% of profit.

Source: Ease of Doing Business – Jordan (WB-IFC).


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Note (4) Success Story

King Abdullah II Center for Excellence is the national reference for quality and excellence among

public, private, business associations, educational service providers and non-governmental institutions. It acts as a catalyst to development and increase competitiveness. The Center launched:

● The King Abdullah II Award for Excellence in Government Performance and Transparency ● The King Abdullah II Award for Excellence - for the private sector ● Mark of "Best Practice" for Business Associations

The awards motivates transfer channels where KT is a process and enabler to spillovers resulting from

impact of knowledge among individuals and firms. This is done through:

● Creating qualitative transformation ● Developing the performance of government and institutions in serving Jordanian citizens and

investors ● Enhancing positive competitiveness among government departments and institutions through

promoting awareness of the concepts of distinguished performance, innovation and quality, and entrenching the culture of excellence for best practice.

● Instill the exchange of exceptional expertise between the Jordanian institutions and the sharing of their success stories.

● Guaranteeing that the government sector undertakes duties and tasks assigned to it in the best manner and with high levels of quality, efficiency and professionalism.

● Provides a reference guide and standards for measuring the level of progress and development of the performance of government departments and parties

● Support development programs and strategic planning in government departments and parties. ● Motivation of private sector, covering large manufacturing organization, SMEs and CSOs.

The Five key elements the Award include: leadership, operations, knowledge, individuals and finance. Participation in the Award is compulsory to all ministries and government institutions, to be affected gradually as stated in the Royal Decree. The King Abdullah II Center for Excellence publishes the success stories of Award achievers on the websites of both the Center and the Award with the aim of sharing the achievers’ knowledge, promoting the Award’s benefits and publicizing their achievement. The Award’s achievers present their success stories and share them with other organizations through the Award related training courses, awareness sessions, and relevant conferences. Award achievers may also preserve the confidentiality of information they do not want to publicize. After announcing the results, each organization participating in the Award receives an assessment report based on the Award’s criteria clarifying its strengths and areas for improvement, to help it achieve continuous improvement on its performance. By adopting the excellence criteria and international best practices, organizations participating in the King Abdullah II Award for Excellence for the private sector benefit in developing their internal systems which ultimately has a positive impact on their performance. They also benefit from these criteria in the self-assessment process which aims to determine the organization’s strengths and areas for improvement.

Sources: http://www.kace.jo

http://www.kace.jo/


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Education and the Human Capital

● The population of Jordan is about 51% males, 60% are under the age of 24 and 76%

under the age of 35 (DoS, 2011). The GoJ allocated 10% of its general budget to

education, at JD 590,748,446 out of JD 5,708,024,127, i.e. 10.35%.

● The distribution of students and schools in the Kingdom, is shown in [Figure 14].

● Tertiary education enrolment in public and private institutions was 266,881,

distributed as 234,559 (5A), 30,061 (5B) and 2,261 (6) ISCED levels. Public and

private universities graduated 48,377 students, at an increase of 20% from the

previous year, with 46% males36. College graduates dropped down 6%. Vocational

school graduates dropped 60% compared to previous years, with 71% males. Academic

schools graduates increased by 9%, with 41% males in 2008/2009.

● Jordan’s high unemployment falls among the age group 16-64, mostly women, that

are actively seeking but not finding employment, this leave 2 million persons, of same

age group that are economically inactive. [Table 6 ]. The high cost of unemployment;

the low income per capita, the high dependency ratio of 1:5 and unemployed youth are

pressurizing the government for jobs and solutions.

● HM Queen Rania has initiated numerous education and teachers’ training initiatives

and awards. One story of success is “Madrasati” [Note 4 ].

● Higher Council for the Affairs of Persons with Disabilities (HCAPD), headed by HRH

Prince Raad Bin Zeid, President of the Council, is leading initiatives to enhance

conditions and employment for PWD (success stories).

● Jordan’s mobility students and scholars is challenged by lack of favourable conditions

to encourage returnees. Jordan received about 30,000 inbound students, from all over

the world.

● Jordan’s workforce of 1.8 million and 313,000 registered guest workers mostly work

in services, manufacturing and the public sector.

● Reformed social security procedures are allowing a wider base of subscribers which

increased by 6% (2009), while registering companies sustained growth by 18%. Early

retirement accounted to 1% increase versus 4% in 2008.

● On mobility [Tables 7 and 8], the internationally outbound students37 were 10,102

(2009), at an outbound mobility ratio of 4%, so that 2,203 students left to Ukraine,

2,188 to the USA, 1,329 to UK, 558 to Saudi Arabia and 541 to Germany. The

inbound students were 26,637 (mostly from Arab countries, mostly males 67%), with

a net flow of mobile students (inbound and outbound) for both males and females of

16.5% and a net flow ratio of 6.5%.

● Jordanian students in higher education comprise 90.1% studying in Jordan and 9.1%

study abroad [Figure 15].

● The inbound Arab & foreign students enrolled to Jordanian universities were 29,379,

and mostly males (68%) in 2009/2010.

36 Ministry of Labour Figures 37 Global Education Digest


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Figure (14) – Students Distribution 2010-2011

Source: MoE Statistics Book 2010-2011

Table (6) - Population of Jordan - Employment / 6,249,000 (100%), DoS Work Age Group 15-64 / 3,714,790 (67.2%)

Not Working Age >15 & <64

(32.8%)

Economically Active (40.1%) Economically Inactive

(59.9%) 1,489,631 2,225,159

Working (87%) Out of Jobs (13%)

1,295,979 193,652

MoE Private Unrwa Other Gov.

Students 1,143,008 382,867 117,957 14,090

Teachers 71,183 25,627 4,493 1,332

Schools 3,433 2,368 173 33

0

200,000

400,000

600,000

800,000

1,000,000

1,200,000

1,400,000

Axi

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tle

Note (4) Success stories

Her Majesty Queen Rania spearheads efforts in Jordan to adopt a holistic approach to national education, encouraging agencies and organizations to work on classroom quality, teaching standards, computer access, family involvement, community investment, and health awareness, through initiatives, like Madrasati and the Teachers Award . http://www.queenrania.jo/) Madrasati is a story of success with the aiming to reach 500 public schools in urgent need of assistance across Jordan, an estimate of 250,000 students through a five-year initiative. The Teachers’ Award is a main knowledge transfer and absorption enabler, so that the effects of the Award have been immediately visible creating competitiveness and surging applications.

http://www.queenrania.jo/


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Table (7) International Flows of Mobile Students– Tertiary Education & ISCED 5 & 6

Levels (2009)

Source: UIS-UNESCO Global Digest - http://www.uis.unesco.org/Education/Pages/ged-

2011.aspx

http://www.uis.unesco.org/Education/Pages/ged-2011.aspx



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Table (8) Int. Mobile Students /Host Country & Origin, Tertiary Education & ISCED 5

& 6 (2009)

Source: UIS-UNESCO Global Digest - http://www.uis.unesco.org/Education/Pages/ged-

2011.aspx

Figure (15) Jordanian Students in Higher Education Studying Inside/Outside Jordan

Source: Ministry of Higher Education & Scientific Research

Number

0

50,000

100,000

150,000

200,000

250,000

300,000

350,000

Inside Jordan Outside Jordan

Total

Axi

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tle

Inside Jordan Outside Jordan Total

Number 274,711 27,451 302,162




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● Jordan ranked 38.4/100 on the Global Innovation Index 2011, falling short on

institutions, human capital & research, infrastructure, market sophistication,

business sophistication, scientific output and creative output.

● The total number of researchers in Jordan, was 1,952 researchers/million population

(2007) taking the lead among Arab countries.

● The Royal Scientific Society (RSS), founded by HRH Prince Hassan, is devoting

resources for testing, knowledge, quality and outreach sectors. Jordan's Technology

Incubator (iPARK) succeeded in training about 2000 entrepreneurs since 2004,

supported start-ups and value-added jobs [Note 6].

● The RSS ICT for Development Cluster has commercialized research in serving

communities, e.g. successful PWD and health sector initiatives [Note 7].

● HRH Prince Hassan Bin Talal’s Award for S&T “The El-Hassan Bin Talal Award for

Scientific Excellence” was established in 1995 for the encouragement of academic,

scientific, and technological activities in all institutions involved in education and

training.

● Jordan has numerous bridging institutions yet ranks low on the scientific research

indicator. Function of research is not recognized and limited, void of participation in

far-reaching programs.

● Expenditures on research and development are low, at 0.34–0.4% of the GDP,

compared to 2-4% spent by highly industrialized countries.

● Higher education weakness are creating gaps in labour markets. Students are not

presented with analyzed market trends and demand when selecting their topics of

study.

● Government subsidies are unpredictable, hence adversely affecting long-term

planning by universities.

● Brain drain of scholars shows that 4000 established scientists and engineers are

employed in R&D and Research in the USA. This is mainly attributed to poor

incentives, frustration and potential in the system. Few patents come out of

universities.

● There are 81 tertiary and higher education institutes in Jordan, 62% are community

colleges, 21% private universities and 12% public ones.

Note (6) Success Stories El Hassan Business Park (EHSC) of El Hassan Science City is one of the main innovation leading institutions in Jordan. EHBP consists of : Queen Rania Centre for Entrepreneurship, iPARK business incubator and the Intellectual Property Commercialization Office. iPARK Technology Incubator aims at providing the needed catalyst to fuel the entrepreneurial process that is pivotal to Jordan's economic development and specialized value-added services to incubated companies in the form of assistance in developing business plans, student internship/employment, networking, grants, promotion, HR management, raising capital from VCs, IP and laboratory facilities. More than 35 incubated companies and 20 gradated ones were processed. More than 750 jobs were created. The export oriented companies succeeded in reaching international clients (86%) and local clients (14%). The high-value added products and services contributing to Jordan’ intellectual capital were 26 shares of copyrights, 10 shares of patents and 4 shares of other.


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ICT infrastructure

● The IT sector is deregulated. The local market is considerably small and fragmented.

● Low public spending on R&D slows down potential expansion of the ICT sector.

● IT usage is low. High telecom costs and PC prices, compared to the average income

level, lead to low penetration of PC’s and Internet usage in the country.

● SMEs, especially small family businesses, do not use IT to strengthen their

competitiveness.

● Uncertainty over laws changes governing sales tax.

● Poor linkages between ICT and academia.

● Domestic consumers are not global trend-setters, adversely affecting innovation.

● Lack of access to venture capital and other non-traditional forms of financing.

● The privatized telecommunication market faces monopoly, this time by Jordan

Telecom, (JIB).

● Low accessibility to modern technologies (WEF).

● The ICT sector exports to more than 45 countries.

Note (7) Success Stories – ICT4D The ICT for Development (ICTD) cluster has registered success stories such as the life-saving development of an online centralized workflow system for the Higher Council Affairs for Person with Disabilities (HCAPD) to manage the workflow of service-provision. A PWD would register using a unique National Number to selects a service (e.g. wheelchair or hearing aid). The system will perform a diagnosis analysis, coordinates and follows up on medical checkups up until the service has been granted, preserving digitized records of the process. The system far-reaches into remote areas and villages, with de-centralized assistance to use and benefit from the system. A database is kept to ensure safety of patient in terms of medical reports and non-duplication of services. This represents a success story of knowledge transfer and absorption throughout centres by means of training, application and documentation. It was also a realization of R&D into a nationally commercialized system, that will save the Council expenses (by avoiding duplication of services), efforts and time. PWD on the other hand become enabled through those aids to become economically active, as the council sets another employability plan for PWD. There are 300,000 PWD in Jordan, but some estimates expect that 15% of the population are with disabilities. The DoS is aiming for a 2014 census that includes focus on PWD.

RSS, http://www.hcd.jo ICTD is also addressing a Social Health and Information Technology initiative for the benefit of rural communities in Jordan (SOHITCOM) regarding maternity issues in rural areas, where expecting mothers are reached to follow up on immunization schedules of newborns and children, in coordination with the National SMS Gateway. The concept was adopted after extensive research.

RSS, http://www.sohitcom.org.jo

http://www.hcd.jo/

http://www.sohitcom.org.jo/


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● The ICT sector has generated 84,000 jobs, contributed by 14% to the GDP38, and has

opportunities in e-learning, e-health, telecommunications, process outsourcing, online

and mobile content, and gaming, among others.

● One success story of Jordan’s ICT sector that raced across the global media was the

“Yahoo acquisition of Maktoob the largest Arabic portal, [Note 8].

● The Ministry of ICT has an ambitious plan to provide universities, schools,

government offices and medical facilities with broadband access to the Internet.

Currently, the National Broadband Network program is connecting school with aimed

connectivity to remote villages. Increased penetration of computers and broadband

access in homes, businesses, and schools will be a significant step in moving Jordan

toward a knowledge economy.

Gaps and inhibitors of KT, its channels and absorption, in Jordan Case Study

|Back|

● Political situation in the region and the Arab Spring.

● Fiscal deficit, lack of controlled public spending and overspending, higher debts than

60% of GDP, high inflation.

● Frequent change in cabinets.

38 MoICT – ICT Economic Impact

Note (8) Success Stories – Yahoo acquires Maktoob

One success story of Jordan’s ICT sector raced across the global media about two pioneering Jordanian entrepreneurs entitled “Yahoo!, the global Internet portal and search engine, acquires Maktoob, the largest Arabic portal, in a landmark deal that speaks volumes about Arab entrepreneurship”. Maktoob founders, Samih Toukan and Hussam Khoury are two tenacious entrepreneurs, innovative, patient and practical who managed to go through discovery, creating a unique product at the right time for the right geography. Maktoob started as a consulting company, then changed to become one of the first (if not the first) Arab website developers, and then moved on to inventing Arabic web email. They saw the niche and they went all the way, building everything around that niche. Maktoob suffered until the first venture investor came. Ironically, it was argued that local media did not ‘take note” of this major event.

Souce: Fadi Ghandour Blog http://www.fadighandour.com/samih-and-hussam-maktoob-story-is-so-relevant-today

The partnership between Yahoo and Maktoob started in 2009 to empower Arabic online content to serve increasing Arab online ‘searchers’, hence availing more of the giant “Yahoo” online services to Arabic speakers.

http://info.maktoob.com/ym_partnership.php

http://www.fadighandour.com/samih-and-hussam-maktoob-story-is-so-relevant-today

http://info.maktoob.com/ym_partnership.php


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● Low competitiveness and ranking in global indices. Lack of knowledge retention and

support to KT, its channels and enablers.

● Low and retreating competitiveness in investment, foreign investment, trade,

business and innovation climates void of ample enhancive legislations.

● Energy challenges and water deficit.

● Low levels in education quality and output, with declining enrolment rates.

● Lack of favourable conditions to encourage return and engagement of some mobile

students and researchers.

● Jordan’s population is suffering from high unemployment and economically inactive

people. The low income per capita is matched with high dependency ratio.

● Vocational training lacks orientation to markets and females.

● Guest workers are estimated at 300,000, as locals abstain from low-wage (culturally

unattractive) jobs. Jordan is exporting highly skilled labour and importing low to

none-skilled workers.

● Absence of a comprehensive and active innovation policy.

● Low expenditures on R&D, estimated at 0.34–0.4% of the GDP compared to 2-4%

spent by highly industrialized countries.

● Key weaknesses in higher education. Lack of research participation and none-

commercialization of research.

● Businesses , government and universities laboratories/research centres are not

regularly spinning-off new firms from their R&D efforts.

● The ICT sector is adversely affected by low public spending on R&D and lack of

skilled human capital. Poor linkages with academia.

● The sector has a considerably small and fragmented local market that lacks

regulation.

● Start-ups lack access to venture capital and other non-traditional forms of financing.

SMEs do not use IT to strengthen their competitiveness.

● Lack of universal accessibilities and high tariffs resulting in low usage.

Recommendations |Back|

Jordan has rendered itself in a very challenging position, with high deficits, debts

reaching their limits, high unemployment and increased pressures on the government to

perform and deliver. Jordan needs to raise its income more than what it can save from

cutting back on public expenditures to sustain growth and job creation. It needs to

achieve fast gains, build on its strengths to nourish KT and retention. FDI and foreign

trade constitute short-term gains and enhancive roles to KT channels and consequent

growth, subject to revamping the investment climate reliant on a unified investment

package for Jordan aided by faster law ratifications focused on manufacturing,

intangible goods and services, and respective KT enablers. E-commerce supporting

mechanisms are apt to empower SMEs, drag them into the force field to cash onto the

myriads of untapped international opportunities. This is without forgetting to enhance

ease of doing business. Not only will this lead to prosperity but it will save Jordan from

taking alternative, perhaps desperate measures, to counter its deficit. Simultaneously, a

long-term measure has to be reconciled, focusing on education and emerging youthful

generations by instilling ICT-based KE and entrepreneurship skills, fostering creativity

towards innovation and job creation. The socio-economic regime, in the meantime has to

be reformed under a unified and integrated agenda that withstands changes in office,

enriched with transparency, accountability and rule of law. Innovation, S&T and R&D

merit nurturing attention across sectors towards feasible commercialization. Through

the perspectives and perceptions of a KE model, it is no longer viable to excel in one


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sector, nor score in one sub-indicator, since what would make a difference is to have

horizontal integration and coordination across sectors, that share platforms and

enabling environments. More awareness is needed on the ‘value of knowledge’ as a

commodity and service that can contribute to 50% of a country’s GDP, the added value

in sharing and transferring knowledge, and working in groups and teams. In addition to

the aforementioned KT enablers and inhibitors on international and MENA levels, in

order to boost KT, its channels and absorption towards economic growth and job

creation in Jordan. Following are key proposed recommendations:

Socio-Economic Regime

● Knowledge economy-based reform and integration of socio-economic policies,

harbouring economic transparency, accountability, fighting corruption and rule of

law. Look at developed countries models where knowledge production nears 50% of

the GDP.

● Focus on FDI, DDI and enablers, focusing on investment and business climates;

empowerment of SMEs and the private sector – as a short term goal. Promote capital

and intangible goods and services.

● Look into countries success stories in job creation, e.g. Turkey has created 3.5 M jobs

through innovative service provision models.

● Create and preserve a “national memory”, where knowledge retention and flow is

streamed-lined to support national agendas.

● Increase public and institutional spending on R&D, nurture a vibrant S&T sector,

increase linkages with academia and invest in knowledge and RDI towards

commercialization.

● Strengthen public and private institutional capacities and competitiveness.

● Focus on law-related gender issues to create equity.

● Work on creating alternative and renewable energy. Focus on water deficit through

supportive policies and RDI (e.g. innovation in agricultural methodologies).

● Increase employability, particularly among females through job creation. Promote

social security and medical health insurance, specially for the private sector to

increase employability (there is preference for public sector employment).

● Educate, train and cater for employability and job creation skills.

● Track brain drain and achievements of Jordanians aboard. Create enhancive

environments for their return or engagement.

● Focus on persons with disabilities through the HCAPD.

● Further develop and regulate the ICT infrastructure. Reduce high telecom costs and

PC prices to raise accessibility and technological usages.

● Support accessibility and sharing of information to individuals and systems.


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Acknowledgements

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I would like to thank all those who facilitated this assignment for their time, wisdom

and care.

Luxemburg:

Van der Meer, Dr. Jacques, EIB

Uppenberg , Kristian, EIB

The Netherland:

Satti, Dr. Samia, University of Maastricht

Jordan:

Hassan, His Excellency Mr. Jafar - Minister of Planning and International

Cooperation

Rousan His Excellency Mr. Basem - Minister of ICT

Kanakriyeh, HE Ezeddin - Secretary General Ministry of Finance

Bakheet, Nadera - Ministry of Labour

Al-Shamali, Yousef - Ministry of Industry and Trade

Omari, Mukhallad - Ministry Planning and International Cooperation

Al-Zubi, Aktham - Ministry Planning and International Cooperation

Aqel, Firyal - Ministry of Education

Ghwanmeh, Dr. Sameh - Ministry of Education Consultant

Farraj, Elias S. - Jordan Investment Board

Mansour, Dr. Yousef - Economist

Fayoumi - Dr. Nabeel - RSS

Daher, Daher - RSS

Hamarneh, Omar - iPark

Rabadi, Wissam - iPark

Asfour, Samer - PricewaterhouseCoopers

Fariz, Jamal - Tamkeen

Ahmad, Islam – RSS

March, 2012

case study on knowledge transfer to jordan 2012 bsaiso r

Documents

knowledge transfers

new knowledge

application of knowledge

management of knowledge

knowledge transfer kt

knowledge transfer channels

ict goods figure

knowledge economy moict