A large proportion of economic growth is accounted for by knowledge-driven technological change and innovation. Irrespective of whether innovation is related to products or processes, whether it is abrupt or incremental in nature, or whether it is technological or related to business models and organizational structures, it improves value for the consumer, the producer or the society at large. It is a nonlinear process involving complex interactions among a multitude of organizations. A society's capacity for innovation, as well as its ability to sustain growth, depends to a large extent on the strengths of and interactions among many institutions and the effectiveness of a variety of policies. The phrases "national innovation ecosystem" (NIE) and "national innovation system" (NIS) have come into use to characterize the relationship among people, enterprises and institutions that guides the flow of technology and information within a country.1 Both include elements such as human resources, research and development (R&D), knowledge networks that enable rapid communication and collaboration among technical professionals, an environment for entrepreneurship, a policy environment, market and financial conditions, and infrastructure. A serious weakness in any element can pose a significant barrier to innovation. Different schools of thought have emerged in the study of NIEs. Frameworks implemented by the governments of Taiwan and Korea have led to improvements in innovation capacities.2 The Korean model is based on the development of infrastructure, intellectual capital, incentives and commercialization. It encourages various sectors by use of incentives such as an intellectual property (IP) information center (an IP bank), IP rights protection, a procurement system, standardization and quality control, and the promotion of the quality of industrial products, standards, measurements, inspection and testing. This motivates each sector to innovate and out-compete the others and thus propel the economy further.3 The Australian government also continues to invest in infrastructure in order to promote skills development through teamwork, problem-solving, communication, prioritizing and managing innovation, and the development of fluency in the languages needed to enhance global competitiveness.4 The Finnish NIE process also considers infrastructure and intellectual-capital development as essential building blocks.5 The innovation capacity of both China and India has contributed to their economic growth in recent years.6 Their enhanced innovation capacity was primarily the outcome of heavy investments in R&D and personnel. Both governments have transformed their NIEs by linking the science and business sectors, incentivizing innovation activities, and balancing the import of technology with indigenous R&D efforts. The same may be said about Japan,7 where relationships among R&D entities, industry and other sectors play an important role in transforming the NIE there. Other Southeast Asian countries formulated their NIE frameworks to enable developing economies to pursue an industrial-development strategy.8 Both industrial policy and value-enhancing rents are playing an important role in the development of indigenous technology. Thanks to the industrial-development strategy in those countries, indigenous technologies benefit from linkages and technological spillovers, as is evident in the newly industrialized economies of Asia. Some nations have developed customized NIE structures designed to address major challenges related to science and technology development in their states. These practical models of NIE frameworks often exhibit iterative or radical changes that illustrate how an NIE framework evolves to meet needs over time.9 One of those models is the "7i" (seven eyes) framework, which identifies seven factors, all beginning with the letter I, that contribute to improving a nation's innovative capacity: infrastructure, intellectual capital, interaction, integrity, interactions, incentives and institutions.10 These factors facilitate movement up the innovation value chain. The 7i framework is surrounded by various agents, including government, enterprises, entrepreneurs, associations, financiers, knowledge-transfer centers, social networks and research hubs. The placement of the seven Is at the center of these organizations points to implicitly formed interactions, connections and feedback loops. Another NIE framework model is open innovation.11 This reinforces NIE by balancing the internal and external elements involved in the ability to acquire and sell knowledge and intellectual property. Open innovation enables a firm to benefit from various components within NIE — research centers, universities, technology-based firms, corporate entrepreneurship and intellectual-property management. For four decades, a question has often been posed: what would be the impact of the sudden deluge of wealth for the future of one of the most underpopulated and underdeveloped regions in the world?12 Saudi Arabia represents a rare case in which capital formation does not impose any constraint on development. The kingdom has focused on technology transfer to compensate for a paucity of indigenous technological capabilities. Three main factors are involved: manpower, expenditures and — most importantly — a well-conceived policy for carrying out scientific and technological activities. The five-year national development plans the Saudi government inaugurated in the mid-1970s (eight of them so far) have been an attempt to orchestrate the development rhythm inside the country, retaining its prominence as a modern state without losing its leadership position as the heart of the Islamic world. Since mid-2003, Saudi Arabia has experienced a strong economic performance, due primarily to a combination of high oil prices, increased oil production and oil-based export earnings. Increasing demand for oil, paired with structural reforms and stable macroeconomic policy making, has enabled a sustained growth momentum in the last decade. However, despite some attempts at economic diversification, the Saudi economy remains heavily dependent on oil and petroleum-related industries including petrochemicals and petroleum refining. Saudi Arabia's population of more than 27 million represents about two-thirds of the Gulf Cooperation Council (GCC). Its gross domestic product (GDP), which exceeded $727 billion with an annual growth rate of 8.63 percent in 2012, is dominated by the oil sector, accounting for 85 percent of GDP.13 Supported by higher oil and gas prices (despite reductions in output), government and private investment and consumption are driving overall economic growth. In order to defend its most significant resource, Saudi Arabia increased its oil-production capacity to more than 11 million barrels per day in 2011.14 Large parastatal corporations still dominate the Saudi economy: Saudi Aramco, which has a monopoly on upstream oil development and controls 98 percent of the country's oil reserves, and Saudi Basic Industries Corporation (SABIC), the world's seventh-largest petrochemical producer and the largest non-oil company in the Middle East. SABIC has been leading the nation's efforts to diversify into the manufacturing of petrochemicals, plastics, fertilizers and metals (mostly steel), all of which are dependent on oil or gas feedstocks or are energy intensive. Most other manufacturing in Saudi Arabia consists of the production, assembly or packaging of consumer products for the domestic market. In the Eastern Province, an industry cluster around light manufacturing, machine tools and assembly has emerged, in addition to the more established industry cluster related to chemicals, petrochemicals and fertilizers. In the Al Baha, Jazzan and Tabouk areas, food processing, packaging and other agriculture-related sectors are gaining ground. The Qaseem region has substantial industrial activity in building materials, foodstuffs, chemicals, plastics, fabrics, smelting and electro-mechanical equipment manufacturing. The Riyadh region has a solid industrial base in value-added manufacturing, assembly and chemicals, as well as service sectors such as information technology, healthcare and financial services. The Makkah (Mecca) region includes the Muslim holy places, in addition to King Abdullah Economic City (KAEC) and King Abdullah University for Science and Technology (KAUST) — an entrepreneurial hub for the whole country. The most populated region in Saudi Arabia, Makkah provides a huge demand for goods and services — light industry, healthcare technology, Islamic tourism and transportation. Generally speaking, small and medium-sized enterprises carry out the majority of manufacturing in the country. Many of these facilities are located in one of several industrial parks. Despite efforts by the government to spread economic activity around, development performance has been uneven among the provinces. The vast majority of production-line workers are expatriates, while at the same time, Saudi Arabia faces serious unemployment, particularly among younger people (6 percent for males, 35 percent for females).15 The nation also has one of the world's highest population growth rates, around 2.9 percent annually, which necessitates much higher levels of employment creation. Since the recovery of oil prices in the late 1990s, economic reform has steadily progressed, paving the way for Saudi Arabia's accession to the World Trade Organization (WTO) in 2005. The World Economic Forum's Global Competitiveness Index (GCI) included Saudi Arabia for the first time in 2007. Saudi Arabia's ranking of 35th made it the highest new entrant to the index. In addition, Saudi Arabia entered the index as one of the highest-ranked countries in the region. Its ranking in the World Bank and International Finance Corporation's Doing Business 2013 report jumped from 67th in 2004 to 22nd in 2012 out of 185 countries. Saudi Arabia was the top-ranked country in the Middle East and North Africa in 2012. As the home of the two holy mosques, Saudi Arabia has a unique advantage in the Islamic world that translates into economic opportunities: the Hajj and Umrah. Both are pilgrimages to Mecca performed by Muslims at least once in their lifetimes. The Hajj occurs from the eighth to the thirteenth of Dhu al-Hijjah, the twelfth and last month of the Islamic calendar; Umrah can be undertaken at any time of the year. In 2012, more than 3 million pilgrims performed the Hajj and more than 6 million Umrah. These figures illustrate the importance of investment in hard and soft infrastructure — security, crowd control and public health — in order to provide pilgrims with appropriate services. Thanks to its extensive capital resources, the country has made substantial investments in roads, air and sea ports, telecommunications, schools and hospitals, providing some of the most modern infrastructure available in the region. There are substantial reserves in its banking system, a history of government budget surpluses, and abundant domestic and offshore investments by institutions and individuals. Some of the key economic sectors in the country are leaders in the global arena and have attracted world-class companies and natural cluster formations around them. In addition, with a young population, Saudi Arabia has a continuously expanding labor pool that, if properly activated, could create sustained economic growth for the country. The most serious challenges facing Saudi Arabia in its efforts to stimulate innovation lie in its human resources. Despite enormous gains in education over the past three decades, a shortage of qualified people in science, technology and engineering is a major constraint on the development of innovation capacity and competitiveness. The number of science and engineering students has increased significantly, but graduates continue to be fewer than 1.0 per 1,000 people aged 20 to 34 — low when compared with most developed countries. In addition, employers generally agree that the quality of Saudi graduates' skill sets is a problem. Brain drain is also a major handicap; around 25 percent of graduates in science, medicine and engineering emigrate each year. Low student enrollment at secondary and tertiary levels and low public expenditures on education aggravate the human-resource situation. Despite the oil boom and financial liquidity, Saudi Arabia offers limited specialized loan and risk capital to innovation-oriented companies. Saudi investors tend to be risk averse and less favorable towards extending funds to young technology-driven companies, which almost always have a high-risk profile. Banks and investors are currently geared to extending funds to companies in established sectors such as trade and consumer-goods, wholesaling and retailing. Concerning national innovation performance, data on key indicators are scarce. For example, figures on employment in knowledge-intensive occupations are unavailable. R&D expenditures by private firms are not being monitored but are considered very low by international standards. R&D programs are limited largely to a handful of major companies. Until recently, institutions of higher education have focused solely on teaching; academic research has lacked momentum. Because of market failures related to knowledge creation and diffusion activities in the private sector, government spending on higher education and scientific research has been bolstered in the last few years. The country's leadership has committed itself to raising science and technology expenditures from below 0.2 percent of GDP in 2000 to 2.5 percent by 2020. An expanding spectrum of emerging opportunities, coupled with the aforementioned strengths of the Saudi economy, provides the country with the necessary impetus to build its innovation capacity and competitiveness. At the same time, a range of emerging challenges, coupled with the inherent weaknesses discussed earlier, dampens the interest of stakeholders in the innovation ecosystem. The rise of political instability in neighboring countries negatively impacts the flow of trade and people, though Saudi Arabia's 2005 accession to the WTO has paved the way for expanding access to new markets. The rise of post-industrial India and China, as well as dynamic regions such as Dubai, has significantly raised the level of competition for Saudi enterprises, especially in the export market. Of course, these developments also present opportunities for Saudi Arabia to leapfrog stages of development. The emergence of a wider set of sources of innovation offers the country an expanded range of partnerships to bolster its own NIE. The global economic slowdown and, more recently, the huge drop in oil prices pose major threats to Saudi Arabia's oil revenues in the near term. In addition, promising sources of technologies related to alternative energy threaten the sustenance of the economic boom Saudi Arabia has witnessed in the past few years. The country's private sector and universities still operate in silos when it comes to research and technology development. Aggressive global institutions of higher education and research lure the Saudi private sector to work with them rather than with local universities. On the other hand, local universities are developing their own technology plans without strategic inputs from industry. Saudi Arabia's vision is to become an international leader in science and technology. In the near term, the country intends to establish an infrastructure of people, equipment, policies and institutions that will provide the foundation for growth. In the longer term, Saudi Arabia aspires to significantly increase investments in science and technology to become one of the leaders in the region and in Asia. Reaching these goals will require the participation of an increasing portion of the population and greater effectiveness of the country's institutions. Saudi Arabia has the necessary resources to invest in people, infrastructure and R&D. It is essential, however, that these resources be targeted effectively to educate its population in math and science and train them to be researchers, innovators and technological leaders. The country must increase investment in R&D, strategically focus on the technical areas where it has the greatest chances of success, and fund ideas and people based on merit. Stakeholders in Saudi Arabia's innovation ecosystem highlight other weaknesses that continue to hinder the country's progress towards a knowledge economy. For example, an outdated legal system with obsolete laws and poor enforcement of property rights cripples the country's growth momentum. Resistance to change, a shortage of women participating in economic activities, poor public attitudes toward science and engineering, a lack of awareness and interest among parents in children's education, and a lack of respect for accountability and transparency slow the country's transition into a knowledge-driven economy. On top of these weaknesses, abundant financial resources resulting from oil revenues and the recent real-estate boom have produced a resource curse, a form of the Dutch Disease that has had the combined effect of making the manufacturing sector less competitive, creating complacency among young Saudis and reducing the incentive to pursue technology and innovation. A collaborative framework for innovation at the national level needs to be articulated. This framework must enable all relevant stakeholders to align their organization-level innovation plans with the activities of other participants in the ecosystem, identifying important leverage points, and enabling greater collaboration, coordination and achievement of organizational and national goals. NIE provides the missing link between the various plans, policies and programs initiated by major constituents in Saudi Arabia, catalyzing flows of knowledge, technology and information across all stakeholders. This would transform Saudi Arabia into a global innovation hub. Although the roles and responsibilities of actors categorized in these layers render an impression of a hierarchical system, in all dynamic NIEs, institutions interact nonlinearly and flexibly. They overlap in their roles, and varied communication channels enable and at all The NIE framework for Saudi Arabia must not be for the nation's level of development but also and to enable the nation to leapfrog development elements — infrastructure, education, — must be included in the as the kingdom is still in the process of building its capacity for innovation. 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Mohammad S Khorsheed (2015) studied this question.