Regional competitiveness in an oil rich economy : benchmarking the regions of Oman

• Main Author: Al Rowas, Meda
• Published: University of Sheffield 2013
• Subjects: 338.6048
• Online Access: http://ethos.bl.uk/OrderDetails.do?uin=uk.bl.ethos.575140

The objective of this study is to define, transfer and apply the concept of regional competitiveness to an oil rich developing country. Regional competitiveness is considered a composite relative concept that can be defined through conceptualising regions in terms of their respective competencies, attractiveness towards factors of production, existing systems and networks [e.g. knowledge networks], spatial interdependences and the subsequent relationships with regional productivity growth and sustainable prosperity. However, for the purpose of application to an oil rich developing economy where the existing of knowledge intensive industry and limited ability to generate knowledge capital, alongside fledgling knowledge systems and networks in place, this emphasis in the discourse limits the transferability of existing models since they would penalise developing and under-developing countries by design. Therefore to achieve this thesis' objective, a modified descriptive regional competitiveness framework was identified that works to benchmark regional inequalities and highlight sector based competitiveness within a given country. The regional model presented in this study benchmarks comparative regional performance across four core factors underpinning competitiveness: Drivers [Human Resources. Investment. Industrial Diversity/Market Size J. Inputs [Knowledge Intensity of Operations. Linkage Intensity. Competitive Environment]. Output [Industry Productivity. Labour Productivity, Sector Contribution to GDP. and Outcomes [Employment. Earnings, Sector based Income per Capita]. Instead of emphasising the growth and development of knowledge based industry. the knowledge component within the definition of regional competitiveness is satisfied by benchmarking the respective knowledge intensity of existing industry across a given sector thus enabling the transfer of the concept of competitiveness to an oil rich developing country. The comparative scoreboard approach is used to benchmark regional performance in manufacturing activity in Oman. in line with the standardised practices of existing published competitiveness indicators. Replenishment and depletion channels are introduced into the model to emphasise that individual scoreboards benchmark periodic rather than annual competitiveness and that RID channels benchmarks changes in the factors underpinning regional competitiveness between two or more consecutive periods. The case of Oman was selected as it is an under-researched developing oil rich economy that managed to show consistent long run growth in GO? and GDP per capita in defiance of the apparent resource curse outlined in some of the oil rich literature. The proposed regional competitiveness framework targets individual sectors rather than aggregated cross-sector regional performance where in the case of Oman the manufacturing sector was selected since it potentially provides an alternative producing sector to mining and quarrying activities. It is proposed that the usefulness of the approach deployed in this study lies in targeting an entire sector of the economy rather than aggregated cross-sector data to highlight: the extent of prevalent regional inequalities in development terms. Given that industrial organisation and micro-economic development in oil- rich developing countries remain largely under-researched. especially in cases like Oman. the application of a descriptive regional competitiveness framework to a particular sector works to transform inaccessible raw Industry data into accessible scoreboards that benchmark sector specific regional performance across the four core competitiveness factors. This creates the platform for more in-depth cross-industry studies. identifying potential obstacles hindering growth and an arguably useful repository that informs regional development policy.