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Prelims

Industry Clusters and Innovation in the Arab World

ISBN: 978-1-80262-872-2, eISBN: 978-1-80262-871-5

Publication date: 13 June 2023

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(2023), "Prelims", El Ebrashi, R., Hattab, H., Hassan, R.S. and Bouchra, N.H. (Ed.) Industry Clusters and Innovation in the Arab World, Emerald Publishing Limited, Leeds, pp. i-xxxi. https://doi.org/10.1108/978-1-80262-871-520231016

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Emerald Publishing Limited

Copyright © 2023 Raghda El Ebrashi, Hala Hattab, Rasha S. Hassan and Nancy H. Bouchra. Published under exclusive licence by Emerald Publishing Limited

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Industry Clusters and Innovation in the Arab World

Title Page

Industry Clusters and Innovation in the Arab World: Challenges and Opportunities

Edited by

Raghda El Ebrashi

The German University in Cairo, Egypt

Hala Hattab

The British University in Egypt, Egypt

Rasha S. Hassan

The German University in Cairo, Egypt

And

Nancy H. Bouchra

Amity University Dubai, UAE

United Kingdom – North America – Japan – India – Malaysia – China

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Emerald Publishing Limited

Howard House, Wagon Lane, Bingley BD16 1WA, UK

First edition 2023

Editorial matter and selection © 2023 Raghda El Ebrashi, Hala Hattab, Rasha S. Hassan and Nancy H. Bouchra.

Individual chapters © 2023 The authors.

Published under exclusive licence by Emerald Publishing Limited.

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ISBN: 978-1-80262-872-2 (Print)

ISBN: 978-1-80262-871-5 (Online)

ISBN: 978-1-80262-873-9 (Epub)

List of Figures and Tables

Chapter 1
Figure 1.1. Evolution of high-tech exports in Algeria (in % of exports of manufactured goods).
Chapter 2
Figure 2.1. Challenges Facing the Automotive Sector in Egypt.
Figure 2.2. Diamond Conditions for the Egyptian Automotive Industry Cluster.
Chapter 4
Figure 4.1. V&A, Favoritism, and SBR Modes in the Arab World (2015–2017).
Figure 4.2. Clusters' Development in the Arab World (2015–2017).
Figure 4.3. V&A, Favoritism, and Industrial Clusters' Development in the Arab World (2015–2017).
Figure 4.4. Clusters' Development and Innovation in the Arab World (2015–2017).
Figure 4.5. Clusters' Development and Productivity in the Arab World (2015–2017).
Chapter 5
Figure 5.1. UAE Ethnic Composition.
Figure 5.2. Workforce Distribution by Occupation.
Figure 5.3. Dubai Visitors in 2021.
Figure 5.4. Dubai Hotel Inventory by Classification (‘000 Rooms).
Chapter 6
Figure 6.1. Structural Equation Models With Composite Industrial Clustering Index (Standardized Estimates). (a) Dependent Variable: Labor Productivity per Worker. (b) Dependent Variable: Labor Productivity per Hour.
Chapter 8
Figure 8.1. Paradigm Shifts in Organization Competitiveness.
Figure 8.2. Framework.
Figure 8.3. Model Formulation.
Figure 8.4. Industrial Cluster Involvement Model.
Figure 8.5. Communication Supply Chain.
Chapter 9
Figure 9.1. Key Stakeholder of National Innovation System.
Figure 9.2. Triple Helix Model.
Chapter 10
Figure 10.1. Market-Related Difficulties.
Chapter 11
Figure 11.1. Measuring the Degree of Clustering, “Cluster-o-Meter.”
Figure 11.2. Technology TAPE.
Figure 11.3. Total Exports of Agadir Countries (2001–2020).
Figure 11.4. Automation in Industrial Countries has Boosted Imports From Developing Countries.
Figure 11.5. Exports of HS Code 8702: “Motor Vehicles for the Transport of 10 or more Persons, Including the Driver” (2001–2020) for Agadir Countries.
Figure 11.6. Trade Balance of HS Code 8702: “Motor Vehicles for the Transport of 10 or More Persons, Including the Driver” (2001–2020) for Agadir Countries.
Figure 11.7. Egypt's Shares of the Imports of the HS Code 8702: “Motor Vehicles for the Transport of 10 or more Persons, InclDriver” by Jordan, Morocco, and Tunisia (2001–2020).
Figure 11.8. Exports of HS Code 8703: “Motor Cars and Other Motor Vehicles Principally Designed for the Transport of Persons” (2001–2020) for Agadir Countries.
Figure 11.9. Share to the Total Country Exports for HS Code 8703: “Motor Cars and Other Motor Vehicles Principally Designed for the Transport of Persons” (2001–2020) for Agadir Countries.
Figure 11.10. Trade Balance of HS Code 8703: “Motor Cars and Other Motor Vehicles Principally Designed for the Transport of Persons” (2001–2020) for Agadir Countries.
Figure 11.11. Morocco's Shares of the Imports of the HS Code 8703: “Motor Cars and Other Motor Vehicles Principally Designed for the Transport of Persons” (2001–2020) for Agadir Countries.
Figure 11.12. Exports of HS Code 8704: “Motor Vehicles for the Transport of Goods, Incl. Chassis With Engine and Cab” (2001–2020) for Agadir Countries.
Figure 11.13. Trade Balance of HS Code 8704: “Motor Vehicles for the Transport of Goods, Incl. Chassis With Engine and Cab” (2001–2020) for Agadir Countries.
Figure 11.14. Exports of HS Code 8708: “Parts and Accessories for Tractors, Motor Vehicles for the Transport of Ten or More Persons, …” (2001–2020) for Agadir Countries.
Figure 11.15. Egypt and Tunisia Shares in Morocco's Imports for HS Code 8708: “Parts and Accessories for Tractors, Motor Vehicles for the Transport of Ten or More Persons, …” (2001–2020).
Figure 11.16. Egypt and Morocco Imports From Tunisia's Exports of HS Code 8708: “Parts and Accessories for Tractors, Motor Vehicles for the Transport of Ten or More Persons, …” (2001–2020).
Figure 11.17. Exports of HS Code 854430: “Ignition Wiring Sets and Other Wiring Sets for Vehicles, Aircraft or Ships” (2001–2020) for Agadir Countries.
Figure 11.18. Share to the Total Country Exports for HS Code 854430: “Ignition Wiring Sets and Other Wiring Sets for Vehicles, Aircraft or Ships” (2001–2020) for Agadir Countries.
Figure 11.19. Trade Balance for HS Code 854430: “Ignition Wiring Sets and Other Wiring Sets for Vehicles, Aircraft or Ships” (2001–2020) for Agadir Countries.
Figure 11.20. Tunisia's Exports to Morocco for HS Code 854430: “Ignition Wiring Sets and Other Wiring Sets for Vehicles, Aircraft or Ships” (2001–2020).
Figure 11.21. Exports of HS Code 700711: “Toughened Tempered Safety Glass, of Size and Shape Suitable for Incorporation in Motor Vehicles, …” (2001–2020) for Agadir Countries.
Figure 11.22. Egypt's Exports of HS Code 700711: “Toughened Tempered Safety Glass, of Size and Shape Suitable for Incorporation in Motor Vehicles, …” to Jordan, Morocco, and Tunisia (2001–2020).
Chapter 1
Table 1.1. R&D Expenditure (as % of GDP) – International Comparison.
Table 1.2. Funding and Execution of R&D Activities in Algeria (in %).
Table 1.3. School Enrollment Rate in Algeria – International Comparison (in %).
Table 1.4. Evolution of the Number of Publications of Scientists in Algeria – International Comparison.
Table 1.5. Number of Patent Filings by Residents and Patents Issued Abroad for Algeria – International Comparison.
Table 1.6. Manufacturing and Technological Performance in Algeria – International Comparison.
Chapter 2
Table 2.1. Background About the Two Case Studies.
Chapter 3
Table 3.1. Conceptual Framework of Knowledge Sharing in an Emerging Cluster.
Table 3.2. Coding Study Participants and Identifying Positions Within the Cluster (Web-Level Lateral Actors).
Table 3.3. Coding Study Participants and Identifying Positions Within the Cluster (Firm-Level).
Table 3.4. Identification of the Participants in the SAM Cluster.
Chapter 4
Table 4.1. Set {A} Regressions.
Table 4.2. Set {B} Regressions.
Table A.1. Proxies, the Sources From Which They Are Obtained, and How They Are Calculated.
Table A.2. Variance Inflation Factor (VIF) Test for Multicollinearity.
Table A.3. Statistical Testing for Choosing the Proper Regression Model.
Table A.4. The Instruments Used in the TSLS Regressions.
Table A.5. Sequential Elimination of Insignificant Variables.
Chapter 5
Table 5.1. Distribution of Workforce by Sector in UAE.
Table 5.2. Dubai's Hotel Performance.
Table 5.3. Hotels, Apartments Buildings, and Rooms for 2021.
Table 5.4. Air Flights at Dubai International Airport for 2021.
Table 5.5. Economic Indicators of Arts, Entertainment, and Recreation Activities by Economic Activity – Emirate of Dubai 2020 (Value in 000 AED).
Chapter 6
Table 6.1. Main Indicators by Governorate.
Table 6.2. Main Indicators by Industrial Sector.
Table 6.3. Surveyed Establishments in the Egypt Enterprise Survey 2016.
Table 6.4. Industrial Clusters by Governorate.
Table 6.5. Structural Equation Model Results (Standardized Estimates) – Dependent Variable: Output per Worker.
Table 6.6. Results of Structural Equation Models With Composite Industrial Clustering Index (Standardized Estimates).
Table 6.7. Regression Results.
Chapter 7
Table 7.1. Five Palestinian Clusters.
Table 7.2. From Clusters to Industrial Districts: An Evolutionary Perspective.
Table 7.3. From Clusters to Industrial Districts: An Evolutionary Perspective Applied to Palestine.
Table 7.4. Cluster Promotion Policies: Different Categories of Instruments.
Table 7.5. Palestinian Cluster Promotion Policies.
Chapter 8
Table 8.1. Different Forces of Agglomeration.
Table 8.2. Traded Versus Untraded Interdependencies.
Table 8.3. Sustainable Supply Chain Indicators.
Table 8.4. Effect of Industrial Clusters on Sustainability (Social and Economic).
Table 8.5. Operationalization of Industrial Cluster Involvement Based on Seo et al. (2015).
Table 8.6. Items Used After Professionals Were Consulted.
Table 8.7. AHP Output 1.
Table 8.8. AHP Output 2.
Table 8.9. AHP Output 3.
Table 8.10. AHP Output 4.
Table 8.11. AHP Output 5.
Table 8.12. Performance Index Sustainability.
Table 8.13. Performance Index Involvement.
Chapter 9
Table 9.1. Types of University–Industry Links.
Table 9.2. Landscape of University Activities and Theoretical Evidence.
Chapter 10
Table 10.1. Examples of Successful Cluster.
Table 10.2. Vital Statistics About MSMEs in Egypt.
Table 10.3. Definition of Micro, Small, and Medium Enterprises.
Table 10.4. Importance Index by Key Groups.
Table 10.5. Lacked Skills.
Table 10.6. Most Critical AIP Success Factors.
Table 10.7. Activities to be Offered by the AIP.
Table 10.8. Opportunities Along the Value Chain.

About the Editors

Prof Raghda El Ebrashi is an Associate Professor of Strategic Management at the German University in Cairo (GUC), and the Head of the Management and Organization Department. She authored seminal articles in top international journals, and lead national and international research projects in the fields of social entrepreneurship, CSR, inclusive business, and SMEs' internationalization. She also serves in the Advisory Editorial Board of the Social Responsibility Journal. Raghda is a consultant for numerous international development organizations, multinationals, and local conglomerates. She is the Founder and Chairperson of Alashanek ya Balady Association for Sustainable Development (AYB-SD), which is one of the biggest youth NGOs in Egypt. She also serves as the Vice President for Golden Years Foundation for community development. Raghda served as a board member in the International Youth Foundation in the US from 2010 till 2013, and lead development projects in Africa from 2017 till 2019. Raghda received numerous international and national awards including: World Business Magazine (London) International award “35 under 35”; UNDP's (Malaysia) “100 global young social entrepreneurs” award; YouthActionNet Fellowship (US); Synergos fellowship (US); King Abdullah Award for Youth Innovation and Achievement (Jordan); Young Global Leader (YGL) by the Schwab Foundation and the World Economic Forum (Switzerland); and Ashoka Fellowship. Last but not least, she was awarded and recognized by His Excellency President Abdel Fattah El Sisi for her community development efforts in 2016. Raghda has a PhD in Strategic Management from the German University in Cairo, a Master's in Political Science, and a Bachelor's in Business Administration from the American University in Cairo (AUC).

Dr Hala Hattab has more than 10 years of experience in the field of entrepreneurship as an Associate Professor of Entrepreneurship at the British University in Egypt (BUE), trainer, mentor, and an entrepreneur. Through her 11 years at the BUE, Hala taught various business courses. In 2013, she developed a program in entrepreneurship that aims at preparing students to be entrepreneurs themselves, including ideas generation, opportunity recognition, and business planning, among others. Dr Hattab was appointed as the Program Manager for the Global Entrepreneurship Monitor, Egypt, and authored three reports about entrepreneurship in Egypt for three consecutive cycles. She is an active researcher, and published several researches and reports in different internationally recognized journals and presented her research work in both national and international conferences. Dr Hattab is a member of the editorial boards of different journals, as well as a regular reviewer for entrepreneurship-focused journals and conferences. She is a founding member of Middle East Council for Small Businesses and Entrepreneurship. As a trainer and a mentor, Hattab has worked closely with hundreds of startups across different countries, applying different entrepreneurship methodologies. She is also a lead trainer for many programs focused on social and sustainability issues. She served as a judge in business plan competitions across the MENA region, and sits in the selection panel of different organizations to interview their prospect entrepreneurs. Hala has been working with different international organizations on consultancy basis to carry out different activities related to entrepreneurship and innovation in Egypt and Middle East.

Dr Rasha Hassan is an Assistant Professor of Entrepreneurship and Innovation in the Faculty of Management Technology at the German University in Cairo (GUC). She holds a PhD in Entrepreneurship and Innovation from Aston University, Birmingham, UK. Rasha has been teaching entrepreneurship and innovation courses for the past 14 years, and her areas of interest include SMEs growth, innovation, entrepreneurship education, and women entrepreneurship and has several publications and conference proceedings in the field. In addition to that, Hassan serves as a reviewer for several refereed journals as well as the British Academy of Management (BAM) and is a member of (BAM). Rasha has been an instructor and the project lead for ROWAD 2030 – a collaboration between the German University in Cairo and the Egyptian Ministry of Planning, Monitoring, and Administrative Reform in Egypt and the German University in Cairo – aiming to qualify the youth and develop their entrepreneurial skills.

Dr Nancy H. Bouchra is an Assistant Professor of Strategy and Entrepreneurship at Amity University Dubai and the head of industry relation for Amity Business School. Nancy holds a Master's and PhD in Strategic Management from the German University in Cairo (GUC) and currently serves as a reviewer to different entities including the Academy of Management Annual Meeting. She has several Scopus indexed publications. Aside from her academic work, Nancy worked with the public and private sector through consultancy projects to promote effective business methods. Adding to this, she received several grants from the GUC and Deutscher Akademischer Austauschdienst (DAAD) to study financial modeling in Germany and to attend several international conferences, and she is currently involved in supervising various research projects and theses for MBA and Master of Science students. Her research interest includes dynamic capabilities, strategy micro-foundations, entrepreneurship cognition, and business model innovations.

About the Contributors

Ms Amira Aldibiki is an Assistant Lecturer at the Faculty of Management Technology, the German University in Cairo (GUC), Egypt. She holds an MSc in Strategic Management and International Business from the GUC. Her main areas of interest in research are organization networks, SMEs' internationalization, and emerging multinationals. She is currently a PhD fellow in Strategic Management at the GUC, and is involved in international research projects in her research fields.

Mr Mohamed Abouelhassan Ali received an outstanding rating for his degree in Urban and Regional Planning from Cairo University in Egypt in 2009. Between 2009 and 2011, he was an urban planner at the Ministry of Housing, Utilities, and Urban Development. After that, he worked as a teaching assistant at the Faculty of Regional and Urban Planning at Cairo University. He earned a Master's in Regional Planning and Development in 2015, and from then until 2018, he worked as an Assistant Lecturer in the Department of Urban Regional Development. He is a PhD candidate in the School of Regional Policy and Economics at the University of Pécs in Hungary. He is interested in spatial science and smart city policies in addition to regional innovation policies.

Dr Mona Ali Ali is an Assistant Professor of Operations Management at the German University in Cairo and an interested researcher in Manufacturing and Service Systems. She graduated with a BSc in Mechanical Engineering and an MBA in Operations and Finance and a Dr-Ing in Mechanical Engineering. Mona uses novel approaches to assess behavioral and nonbehavioral factors leading to sustainability of organizations. She studies and teaches different models and tools to ensure smooth operations in both manufacturing and service organizations. Her focus is to improve productivity output of complex systems by simplifying and optimizing organizational structures, processes, and overall ways of working. Mona's extensive international exposure ensures that adaption of the most recent global insights in Operations Management will directly benefit the financial and operational sustainability of organizations, cities, and countries.

Prof Rédha Younes Bouacida is a doctorate in Economic science from Aix Marseille University (AMU), France. Currently, he is a University Professor, Faculty of Economics, Commerce and Management of the University of Skikda, Algeria. He was a former member of the Maghtech-DIM Team, Clersé UMR 8019 of the CNRS, University of Lille 1, France. He is a member of the Innovation Research Network (RRI), France, and the Third World Association (ATM), France. He is also a consultant in international economy at the television channel AL24 News, Algeria, and a columnist in international economy at the newspaper Le Maghreb, Le Quotidien de l'Économie, and El Watan, Algeria. His research work focuses on development economics, knowledge economics, innovation management, industrial economics, international economics, and sustainable development. His latest book (edited) 2022: Innovation, Recherche & Développement au Maghreb et en Afrique subsaharienne: Enjeux pour le développement et exemples sectoriels, 228 pages, L'harmattan, France.

Prof Meine Pieter van Dijk is an Economist, Em. Professor of Water Services Management at UNESCO-IHE Institute for Water Education, Visiting Professor at the Beijing University for Civil Engineering and Architecture, and Em. Professor of Urban Management at the Institute of Social Studies (ISS) and the Institute of Housing and Urban development Studies (IHS) of Erasmus University. He currently works at the Maastricht School of Management (MSM) of Maastricht University in the Netherlands. He published 50 books and over 300 professional articles. He worked on and in developing countries since 1973 as a consultant for NGOs, the Asian Development Bank, the Inter-American Development Bank, the World Bank, and different bilateral donors and UN agencies.

Dr Menatallah Darrag is an Assistant Professor at the Faculty of Management Technology, the German University in Cairo (GUC) in Egypt. She holds a PhD in Management from De Montfort University, Leicester, UK. Her main areas of interest in research are organizational behavior, CSR and sustainability, as well as general management areas. Her works are published in journals like Social Responsibility Journal, Business and Society Journal, Journal of Change Management, and others. She serves as a reviewer for a number of journals as well. In addition to that, she worked as a consultant in areas of development and sustainability with bodies like the ILO, DAAD, as well as with different universities.

Dr Dina El Kayaly's background spans the fields of market research, performance management, strategic marketing consultancy and research in Egypt and the MENA region. She is a graduate of Kuwait University with a degree in Applied Statistics, a Master's in Statistics from Cairo University, a Master of Business Administration, and a doctoral degree from Maastricht School of Management. She worked as Statistical Data Analyst & Performance Management Consultant at the Ministry of Higher Education, Ministry of Manpower, and Ministry of Health and Population in Egypt. She headed the Marketing Research Division at Solution Consulting and then joined KPMG as Market Research Manager. Dr El Kayaly's academic research includes publications and conference presentations on Big Data and decision-making process, CSR supporting SMEs, competency assessment, entrepreneurship, customer loyalty and satisfaction, knowledge management, Six Sigma and improvement, strategic management, and international business. She is currently an Adjunct Faculty of New Giza University, School of Business and Finance in Egypt, the Principal of Marketing at DAAM Group, and also the Head of Marketing and Market Research at EDGE for Training and Consultancy. Dr El Kayaly was selected to be one of the 50 most influential women in Egypt in 2021.

Mohamed Zaki El Sewedy has been the Chairman of the Federation of Egyptian Industries (FEI) since 2013, and served as its Deputy Chairman beforehand. He was a member of the Egyptian Parliament, and a member of the High Council of Investment. Mohamed El Sewedy is a Board Member of Ayady co. for Investment and Development, and also of the Egyptian Electric Utility and Consumer Protection Regulatory Agency (EGYPTERA), as well as of the Gas Regulatory Authority. El Sewedy graduated in 1987 from Cairo University, with a Bachelor's degree in Electrical Engineering and Power.

Mr Sameh Hammad is a practitioner and expert in industrial development and international trade since 1999. He is currently heading the industrial clusters component of the Special Initiative for Jobs project in the Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH – Egypt office. Across his career, he gained diversified experience from working in corporates, consultancy houses, banking sector, and development projects in Egypt, the Middle East, and Africa. He conducted several EU-funded projects within the Egyptian ministry of trade and industry and its affiliates in the context of industrial strategies and private sector development. Also, he worked as a national consultant for International Trade Centre (a joint agency between the UN and WTO) with regards to trade facilitation publications and Non-Tariff Measures. Hammad is preparing the dissertation of his DBA degree from Alexandria University. He received his MBA from the Arab Academy for Science and Technology in the year 2011. This is in addition to other professional certificates from UNCTAD, UNIDO, ITC, GIZ, Chamber de Commerce et d’ Industrie de Paris, American University in Cairo, and Frankfurt School of Finance and Management.

Prof Jose Louis Iparraguirre is Full Professor of Economics, German International University of Applied Sciences, in Egypt. Born in Argentina and with over 30 years of professional experience within and without academia in three continents, he holds a PhD, five MSc degrees, and three graduate diplomas in subjects ranging from economic policy, demographic change, social economy, local development, public policy and management, applied statistics, contemporary philosophy, new teaching technologies, and research methods.

Ms Enas Moustafa Mohamed Abousafi has an MSc in Economics and worked as teaching assistant of Research Methodology and Microeconomics at the German International University of Applied Sciences in Egypt at the time of this research.

Dr Mohamed Ismail Sabry is currently a Visiting Postdoctoral Researcher at the International Institute of Social Studies (ISS) of the Erasmus University of Rotterdam. His previous research engagements include being a Postdoctoral Research Fellow at the Merian Center for Advanced Studies in the Maghreb (MECAM)-Research Group “Resources and Sustainability” and the Bremen University of Applied Sciences (HSB). He is also a Lecturer at Fresenius University of Applied Sciences (Hochschule Fresenius). He obtained his PhD in Economics from the Philipps University of Marburg in 2013, with his Bachelor's and Master's degrees obtained from the American University in Cairo (AUC). His professional experience includes working in the field of development at a United Nations Development Programme (UNDP) project in Cairo and another project in Berlin funded by the German Foreign Ministry. Dr Sabry's academic fields of interests are Institutional Economics, Economic Development, Political Economy, and the Middle East and North Africa (MENA) region, and the focus of his research is state–society relations and state–business relations. He published several books in English and Arabic and several academic papers in different peer-reviewed journals.

Dr Rani Shahwan is an Assistant Professor (Strategy and Innovation) at the Faculty of Economics and Social Sciences of An-Najah National University, Palestine. He holds an MBA (focused on E-business and Information Technology) from Maastricht School of Management (the Netherlands) and a PhD in Strategic Management and Innovation from Newcastle University (UK). His most recent work focuses on business model innovation and the impact of novel business models on organizational performance at various organizational and industry settings. Currently he is engaged in various research projects focusing on innovation adoption and diffusion in healthcare.

Dr Suhail Sultan is an Associate Professor of Business Administration from Birzeit University in Palestine. He received his PhD in Business Administration from Maastricht University in the Netherlands. He has several publications in the fields of clustering, triple-helix, innovation, family businesses, and SMEs. Dr Sultan joined the University of San Francisco Gellert Family Business Center for the academic year 2022–2023 as a Fulbright Scholar-in-Residence.

Ms Salma Tosson is an Assistant Lecturer at the Faculty of Management Technology, the German University in Cairo (GUC) in Egypt. She holds an MSc in Entrepreneurship and Innovation Technology Management from the GUC. Her main areas of interest in research are entrepreneurship ecosystems, networks, and orientation. She is currently working on her PhD in the domain of National Innovation Systems, and is also involved in international research projects in this regard.

Dr Aliah Zafer is an Assistant Professor in the Department of Business Administration at Prince Mohammad Bin Fahd University (PMU). Since 2021, she has been serving as a Chair of Mission and Goals Committee of COBA. During 2017-2018, she worked in Imam Abdulrahman Bin Fasil University as an Assistant Professor and a consulting member in the Knowledge Café. Dr Zafer is also an Affiliate of the Microeconomics of Competitiveness (MOC) Network, founded by the Institute for Strategy and Competitiveness at Harvard Business School. Dr Zafer's research interests span both General Management and Strategic Management. Much of her publications and research work has been on improving the understanding mechanisms of knowledge sharing within industry clusters and geographical mapping of clusters, mainly through the application of different research models. She has also investigated the implications of Saudi Vision 2030 Realization Programs as an ongoing research project from Strategic planning perspectives.

Dr Tabish Zaman is a Senior Lecturer of Innovation, Entrepreneurship, and Strategy at Anglia Ruskin University, Cambridge. His work involves understanding complexity and innovation in complex organizations such as the healthcare. Innovation adoption and implementation are central to Dr Zaman's research endeavors. He has been exploring the notion of entrepreneurship and small business especially in developing nations. He has a PhD from the University of Leeds focusing on adoption of healthcare technology in healthcare and a Master's in International Management. He is an Associate Fellow (Higher Education Academy) and was an Assistant Professor (Lecturer) at the University of Hull. Dr Zaman is the author of various articles and chapters in reputed journals, conferences, and books. He is currently working on various research projects and continues to teach on innovation, entrepreneurship, and strategy modules at undergraduate and postgraduate levels.

List of Contributors

Rédha Younes Bouacida Skikda University, Algeria
Menatallah Darrag The German University in Cairo, Egypt
Raghda El Ebrashi The German University in Cairo, Egypt
Amira Aldibiki The German University in Cairo, Egypt
Salma Tosson The German University in Cairo, Egypt
Aliah Zafer Prince Mohammad Bin Fahd University, Saudi Arabia
Mohamed Ismail Sabry Erasmus University Rotterdam, Netherlands
Nancy H. Bouchra Amity University Dubai, UAE
Rasha S. Hassan The German University in Cairo, Egypt
Enas Moustafa Mohamed Abousafi German International University of Applied Sciences, Egypt
Mohamed Abouelhassan Ali Cairo University, Egypt
Jose Louis Iparraguirre German International University of Applied Sciences, Egypt
Suhail Sultan Birzeit University, Palestine
Meine Pieter van Dijk Maastricht University, Netherlands
Mona Ali Ali The German University in Cairo, Egypt
Rani Shahwan An-Najah National University, Palestine
Tabish Zaman Anglia Ruskin University, UK
Dina El Kayaly New Giza University, Egypt
Sameh Hammad Deutsche Gesellschaft für Internationale Zusammenarbeit, Germany

Foreword

The Arab World has been a zone of treasure for the whole world with immense flow of natural resources, trained labor, and youth innovations. During the last few decades, many countries in the Arab World started to migrate from resource dependency and raw material exporting, to the development of heterogeneous resource bundles and building world-class competitive industry conglomerates. The emergence of the petrochemical industry cluster in Egypt, the tourism cluster in the UAE, the technology cluster in Saudi Arabia, and the artisanal cluster in Tunisia are just examples. Building clusters in the Arab World necessitates the existence of strong firm-level rivalry, government support, technical and vocational education, technological advancement, developed suppliers, and citizens that support their local brands. Only through clusters with those necessary pillars will the Arab World states be able to emerge as key players in international markets.

If we take Egypt as an example, the story of the Egyptian cotton is one of the marks in building the textile industry cluster in the region. Since the Pharaonic period, cotton cultivation has been a well-known commodity in Egypt, and has been a major factor that has affected the country's development over the past half-century. Undoubtedly, Egypt economic fate was linked to the flows of cotton production. As in 1927, cotton cultivation developed to cotton manufacturing when Talaat Harb established Egypt Cotton Spinning and Weaving Company as one of the companies of Banque Misr. The Company started its production at 12,000 reaching 357,000 spindles. Due to the country's pioneering achievements in the spinning and weaving of cotton, Egypt was able to establish a global reputation for its quality. This became a trademark of the country and the Egyptian cotton shirt; that is “Made in Egypt” is exported to various parts of the world. Referring to it as “white gold”, Egyptian cotton exports are believed to be the past and future of the modern Egyptian renaissance rather than just a simple crop.

The Egyptian cotton shirt is manufactured with the finest Egyptian cotton, the latest spinning and weaving techniques, superior finishing materials, and unique design. Due to its strong competitiveness, technological advantages, and higher spinning consistency, it outperforms the quality of international kinds. All connected sectors, including those in research, agriculture, production, marketing, and industry, contributed their efforts to this outcome. This ultimately resulted in the creation of direct and indirect employment for one million people with investments totaling 26 billion Egyptian pounds in agriculture and its related businesses, such as the textile industry, dyeing, and apparel industry. Currently, the textiles industry accounts for 20% of the country's employment, and it is one of the country's major exporters of high-quality cotton. Egypt is additionally one of the world's largest producers of long-staple cotton, which is a type of textile that is known for its superior quality. Egypt supplies around 17% of global long-staple cotton, which is about half the output of the United States (world's top exporter) as well as China.

The Arab World has always been a major contributor to global oil and gas production. It accounts for five of the top 10 global producers and is responsible for approximately 27% of the world's production. Two of the top market players in the Middle East are Saudi Arabia and United Arab Emirates. Saudi Arabia is a major producer and exporter of oil to the whole world. It has the second-largest proven crude oil reserves; holding 15% of the world's proven oil reserves. It retains the largest crude oil production capability at close to 12 million barrels per day and is the top crude oil exporter in the world. The Saudi Arabian economy is mostly based on oil exports; in 2020, oil exports made up over 70% of the nation's total exports in terms of value, and 53% of the Saudi government's revenue stemmed from oil. As for the United Arab Emirates, it is one of the world's largest oil producers. About a 100 billion barrels of proven reserves are located in Abu Dhabi, which is regarded the sixth-largest producer in the world. The country produces approximately 3.2 million barrels of oil and liquids per day. The country's reliance on hydrocarbons continues to be a critical part of its economy. About 30% of the country's GDP is derived from its oil and gas industry, and 13% of its exports. The UAE government continues to rely on the country's oil and gas exports for a huge portion of its revenue.

Instead of being heavily dependent on oil and gas exports, Saudi Arabia and the UAE induced development of industry clusters using oil and gas; including fueling new power stations, and water desalination plants. Additionally, major industrial facilities use gas as feedstock to produce petrochemicals, fertilizers, steel, metal smelting, and other products that in turn supply a booming industrial sector. One of the largest projects that was developed is water desalination plants, as water scarcity possess a serious concern all over the Middle East. Saudi Arabia owns the largest overall desalination plant in the world in Jubail located in the east coast, with an output capacity of 1.4 million m3/d. Additionally, the UAE uses natural gas in the process of oil production designed for pumping into the wells and for desalination of water. Moreover, gas has also been used for the jet fuel consumption; Saudi Arabia consumed a value of 16.91000 barrels per day in 1980 compared to 81.58000 barrels per day in 2019. Similarly, UAE has used 4.2000 barrels per day in 1997 compared to 163.75000 barrels per day in 2019.

The rapid advancements in the Arab World allowed the region to become a remarkable exporter after being limited to merely importing goods. Not only are there products being exported, but there are also national industries being established. These industries utilize national labor force, which in turn develop labor skills and build cadre of local talents. Hence, the overall education system evolves and adjusts accordingly. Therefore, when building the Arab industries, we are building skills, we are building an economy based on exports, and we are building other industries (upstream and downstream) that increase the competitiveness of local industries to compete globally.

As the Chairman of the Federation of Egyptian Industries, we have been keen to move forward in construction, reform, and innovation and in strengthening the infrastructure of all sectors of the local industry. A strong industry can help provide the necessary financing for the development of various vital systems related to the lives of citizens. These include education, health, and scientific research. The yield from an industry can also be used to fund the establishment of other national industries in the region. Additionally, we work on the establishment of industrial parks in each governorate with the appropriate natural resources and the market requirements. Moreover, we are involved with supplementary industries for large industries in order to create new job opportunities especially for young people as well as the continuous effort to encourage exports, open new markets, and attract new exporters.

It is my utmost pleasure to present you this piece of work; the first book written on the development of industry clusters for innovation in the Arab World. Presenting cases from different countries in the region, this book, we hope, shall add to the knowledge of academics, students, and practitioners in various fields, and shall shed the light on the emergence of Arab world industries as the “new tigers” in the coming years. I dedicate this book to our Arab firms, local brands, and Arab conglomerates that make us all proud!

Thank you and hope you enjoy it!

Eng. Mohamed Zaki El Sewedy

Chairman of the Federation of Egyptian Industries (FEI)

Preface

Over the last decades, studying industry clusters have risen to prominence and became popular among academics, policymakers, and economic development professionals, who have stressed the importance of encouraging and supporting clusters for national innovation and global competitiveness. Porter's seminal article “The Competitive Advantage of Nations,” published by Harvard Business Review in 1990, drew the attention to the notion of industry clusters as a group of geographically close-by and linked – vertically or horizontally – industries; helping one another in a mutually reinforcing process. By definition, clusters are a group of similar things, or people, close together, to form a group, either by surrounding something, or by creating something, to achieve a shared vision. Within this perspective, business and industry clusters emerged and later, due to technological developments and globalization, innovation clusters and information clusters followed. Despite the differences among these clusters, but all serve as enablers to have easier access to skills, suppliers, customers, specialized information, and complementary products and services that lead to achieving lower costs and higher quality.

Clusters promote innovation via collaboration among businesses, businesses and research institutions, and businesses and governments, which lead to the creation and sharing of different aspects of knowledge. It promotes professional networking, interfirm links, access to spillover knowledge, and talent pool which are the necessary elements supporting the spawning of innovation. Moreover, clusters can spill over innovation through the demand conditions, due to the presence of sophisticated and demanding local customers who will force industry cluster firms to continuously innovate and stay on the leading edge. In turn, this will be the main pillar to achieve competitive advantage. Another reason for the increasing interest in clusters is its capacity to foster economic development, especially in emerging countries. In addition, the impact of industry clusters extends to improve micro and small firms' performance and induce their internationalization. This is through availing knowledge and information gained from the various cluster members, in addition to creating a pool of specialized labor. Furthermore, these linkages build suppliers' capacities in terms of their specialization and quality, making the way for those suppliers to also have international presence.

Examples from different parts of the world has shown that clusters helped in strengthening competitiveness by increasing productivity, stimulating innovative new partnerships, and presenting new opportunities for entrepreneurial activity and new SMEs' formation and growth. Consider the IT cluster in Bangalore/India, that was identified as one of the most important and growing IT clusters outside the US and OECD region. Nigeria has another successful example for micro, small, and medium enterprises forming industry clusters, which helped in the creation of competitive advantage for various industries and advanced the Nigerian economy in the past years. To name a few, there is the leather and apparel cluster in Aba, Abia State; the Kannywood cluster in Kano, and the Adire tie and dye cluster in Abeokuta.

Thus, there is no doubt that industry clusters are capable of supporting the Middle East North Africa (MENA) countries in their socioeconomic development and transformation. The region is endowed with a central geographic location situated at the crossroads of three continents, a growing young well-trained and educated population, and a significant share of the world's energy resources. However, the MENA region is increasingly under pressure to face the external and internal challenges that have slowed the economic development of some of its countries. For example, the region has witnessed unprecedented turmoil over the last 10 years, a rapid population growth with high unemployment rates, low economic diversification, geopolitical tensions, and fluctuations in foreign currency exchange, which all threaten long-term economic growth. Despite of these challenges, the countries in the region have embarked on a series of reforms to increase economic openness and diversification, improve productivity, and encourage innovation and competition. These reforms initially led to an increased investment, trade, an improvement in the levels of innovation and entrepreneurship, as well as economic growth. In the core of these reforms, different MENA countries have integrated the establishment of industry clusters as a central component of their 2030 vision. For example, Saudi Arabia is establishing an automotive industry cluster, the United Arab Emirates is giving attention to its Tourism cluster, Egypt is focusing on its textile and furniture clusters, and Morocco is developing its agriculture cluster.

Since most of published research on industrial clusters and its impact has focused on developed countries as well as countries in Asia, this book is one of the few attempts to shed light on the emerging industry clusters in the Arab World. Industry Clusters and Innovation in the Arab World introduces readers to wide array of pragmatic perspectives and case studies on successful industry clusters in the region, and demonstrates the challenges faced by industries in different Arab countries with suggested solutions that are practically applicable. The book constitutes 10 chapters, shedding the light on different industry clusters in number of Arab countries and explaining the macroenvironmental characteristics surrounding these clusters, posing opportunities or threats.

Chapter 1 focuses on the strategies that the Algerian public authorities may employ to build a solid National Innovation System (NIS) to improve economic performance in Algeria. The chapter analyzes the different components of the Algerian NIS, evaluates its learning and innovation capacities, and measures the production of innovation, as well as how these affect the economic performance of the country. Chapter 2 tackles the automobile industrial cluster in Egypt that possesses promising potential yet faces some challenges. The chapter displays the importance of the labor dimension in increasing the labor competitiveness of the cluster and showcases this through two cases of German automobile manufacturers that pioneered in venturing into the market through employing technical and vocational education and training (TVET).

Chapter 3 takes us to Saudi Arabia, which investigates how clustering promotes knowledge sharing and transfer in an emerging, government-directed industry cluster. It is determined that lateral actors play a key facilitating role, and that cluster knowledge exchange is supported by the existence of formal, informal mechanisms, and interpersonal links among actors. Limited social capital strength and depth, as well as a lack of trust that prevent knowledge sharing are partially explained by the cluster's limited vertical and horizontal actors. Chapter 4 explores how state-business relations (SBR) in the Arab World influence public policy on industrial clusters and the resulting economic benefits from these clusters on innovation and productivity. This chapter suggests that the development of industrial clusters in the Arab world necessitates institutional reform addressing the power relations governing SBR in the region. Chapter 5 examines the competitiveness of the tourism cluster in the United Arab Emirates (UAE) by applying Porter's competitiveness of nation diamond model, with its four dimensions factor conditions, demand conditions, the related and supporting industries, and, lastly, the firm's strategy and rivalry. Chapter 6 applies the five drivers of productivity framework to regional microdata for Egypt and extends it by introducing an index of industrial clusters as an explanatory factor of the productivity performance of local private sector firms.

Chapter 7 illuminates out understanding of the Palestinian context, where the chapter analyzes the challenges facing five Palestinian clusters and to comprehend their dynamics and level of development. The five clusters in Palestine are located in a complex environment that imposes a mix of challenges, which adversely affect their performance. As for Chapter 8, it proposes a framework for developing an index measuring both organizational cluster involvement and organizational supply chain including the three pillars (Economic, Social, and Environmental). The proposed framework aids firms within a cluster in making timely decisions about what needs addressing to improve supply chain sustainability performance. Chapter 9 illustrates the role of higher education establishments in Middle Eastern countries specifically in Saudi Arabia. The contributions of higher education establishments are particularly significant in relation to regional and national innovation system, which have been earmarked as engine for growth of the local economy across the region. Chapter 10 is a practitioner view for understanding the challenges facing agricultural micro and small enterprises in Egypt, and the role of Agro-Industrial Parks (AIP) in creating synergies and competitiveness in the sector.

It is our utmost honor and pleasure to present you with this piece of work that spans across the borders of the Arab World, brining diversified knowledge, experience, and novel ideas for the development of the region. Hope you enjoy it!

Raghda El Ebrashi

Lead Editor

Hala Hattab

Coeditor

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