Abstract/Summary

The relationship between R&D investment and economic development is well established. Yet at a global scale, the resource rich countries of the Gulf Cooperation Council (GCC) are consistent outliers in this relationship, combining rich-world national incomes with R&D expenditure of developing countries. This paper uses a case study on Kuwait to illustrate a particular form of developmental trap, a version of the resource curse which makes it irrational for private business firms to invest in R&D and innovation. Based on an analysis of the literature and secondary data, focus groups, and an original survey of large manufacturing firms, we argue that a narrow focus on R&D-led diversification of economic activity ignores the systemic problems faced by Kuwait, and particularly the unsuitable supply of skills and capabilities provided by the national education and training system.