Press Release

Susan E. Mayer - Big Ideas Needed for Economic Growth

In a July column for Al-Eqtisadyah, an Arabic newspaper covering Arab World economy news, Dean Susan E. Mayer discusses economic growth in Saudi Arabia.

July 28, 2006
Big Ideas Needed for Economic Growth
Susan E. Mayer
Professor and Dean
University of Chicago, Harris School of Public Policy Studies

As in every other country, economic growth in Saudi Arabia will require people with big ideas who can put those ideas to work. Big ideas for new products, new uses for existing products, and new ways to produce and manage are powerful engines of economic growth.

It is not news that Saudi Arabia has too many expatriates working in jobs that Saudis could do, too many "ghost" jobs for which people get paid for little work, too many college graduates with no jobs, and a lingering oil boom mentality that discourages some kinds of work. The Kingdom, which already has a more open economy than many of its neighbors, has plans to liberalize and diversify the economy and to reduce the number of expatriates in the labor force.

To encourage big ideas requires a relatively open economy based on voluntary exchange, freedom to compete, and legal protection for property. Open economies provide the basic incentives needed to encourage ideas and attract investment for them. But even the most liberal economy is not sufficient to assure the creation of new big ideas.

Big ideas come from smart people. But while every country has smart people, big ideas are hardly distributed evenly across countries. By almost any measure of new ideas - patents per capita, science prizes, Nobel Laureates, self-made billionaires and so on - the United States and Europe lead the pack with a few Asian countries such as Japan making headway. These are rich countries that invest a lot in education and in research and development. But that is not why they produce big ideas.

What these nations share in common is that their education systems emphasize a general curriculum aimed at developing critical thinking skills. Students are encouraged to challenge old ideas, try new things, and work collaboratively. Big ideas begin with the education of little children.

The Kingdom has made progress in increasing the proportion of both male and female students who enroll in and complete primary and secondary schooling, and in increasing literacy rates, although in international tests of mathematics and science Saudi Arabian elementary school students rank along with much poorer countries at the bottom of the league tables.

The Kingdom is also making some progress in post-secondary education and training. The number of students enrolling in both private and public universities and colleges is increasing, new universities are being built, and universities from outside the Kingdom are working in collaboration with Saudi universities. Yet the majority of Saudi business leaders are educated in the US or other western countries, and the Saudi government has recently introduced plans to expand the resources for Saudi students to study abroad, especially in India and China - two nations that are poorer than Saudi Arabia. This begs the question, why are the universities of Saudi Arabia not producing more of the Kingdom's scientific, technological, and business leaders?

The answer is that Saudi universities have largely not mastered the kind of general education that dominates western universities. An educational atmosphere that encourages intellectual experimentation, diversity, tolerance of outsiders and eccentrics, and acceptance of new ideas presents a challenge for a conservative nation with political, social and educational principles based on traditional religious values. It is not possible to compartmentalize these values. Inventive minds will not stop at the border of religion. Big ideas can be troublesome.

All nations face trade-offs in their policies and what is right for one nation is not necessarily right for another. It is up to the leaders of Saudi Arabia to decide the balance in Saudi schools and universities between deference and freedom of thought, doctrine and critical thinking, and tradition and change. In the end there is a trade-off between traditional values and economic growth and that trade-off should be faced squarely regardless of which path Saudi Arabia chooses.