The OECD Review of Kuwait’s Innovation Policy is part of a series of OECD country reviews of innovation policy (www.oecd.org/sti/innovation/reviews). It was requested, and entirely funded, by the authorities of Kuwait, represented by the Kuwait Foundation for the Advancement of Science (KFAS) and the General Secretariat of the Supreme Council for Planning and Development (SCPD), and was carried out by the OECD Directorate for Science, Technology and Innovation.

Oil has provided Kuwait with wealth and well-being for the past 80 years. Slowing demand for oil is threatening the sustainability of the current economic and social model, emphasising the need to transition towards a knowledge-based society – where value creation, the resolution of societal challenges and the well-being of society at large will be based on the production, diffusion and implementation of knowledge.

This chapter presents an overall assessment of Kuwait’s innovation system and policy, reflecting analytical findings of the review. It identifies the strengths and weaknesses of the national innovation system, and develops specific policy recommendations designed to facilitate Kuwait’s transition towards “Smart Kuwait”, a knowledge-driven society, which is the stated goal of the national development plan. Specific recommendations address the issues of governance of the overall innovation system, framework conditions for innovation, strengthening human resources, fostering critical mass and excellence in public research, intensifying diversification, fostering business innovation, and increasing and diversifying the sources of knowledge for enterprises.

This chapter first discusses Kuwait’s macroeconomic performance, and in particular, the benefits and long-term risks caused by Kuwait’s exceptional resource endowment, the diversification challenge, and its labour market and social contract. The second section discusses Kuwait’s framework conditions, especially those related to the business environment and entrepreneurship. The last section reviews Kuwait’s aggregate innovation performance. It starts by examining input indicators: R&D expenditure across sectors, education input and outcomes, and the availability of human resources for innovation. It then reviews indicators of innovation output to highlight qualitative and quantitative characteristics of Kuwait’s innovation system, in particular the quantity and quality of research outcomes, the number of patents, and the share of high R&D-intensive activities in its total exports.

This chapter presents the structure and mechanisms of governance of the STI system in Kuwait. Following a short summary of some general principles regarding effective STI governance structures, this Chapter presents a general overview of the Kuwaiti political and policy systems and discusses successively the three main levels of an STI governance structure: STI strategy and coordination; STI policy formulation and funding; and STI policy implementation.

This chapter presents the Higher education and research activity in Kuwait. It starts with a brief overview of the general principles that govern effective higher education and research based on international experience. It then successively reviews the main public and private higher education institutions, and the research institutes, KISR in the first place. A final section discusses KFAS supports to research activities.

This chapter presents the business innovation activity in Kuwait. It starts with some background concerning the diversification issue and the imperative for Kuwait to develop into a knowledge-based economy and society. It then gives a brief overview of the characteristics of an efficient business innovation system, based on international experience, discussing the role of research and development in enterprises, innovative entrepreneurship, knowledge diffusion, and business-academia linkages. The chapter then analyses the structure of the Kuwaiti business sector, which is dominated by state-owned enterprises in oil and other strategic sectors, with a relatively underdeveloped small and medium-sized enterprise sector. The chapter moves on to discuss the innovation and R&D performance in enterprises, followed by an analysis of business-academia co‑operation and linkages. The final section discusses Kuwaiti policies in favour of innovation and R&D in the business sector, which has many opportunities for improvement.