The Knowledge-Based Economy and the Failure of the Arab Dream: What the !#%@ Happened?

19 Pages Posted: 24 May 2012

See all articles by Wesley Schwalje

Wesley Schwalje

London School of Economics & Political Science (LSE)

Date Written: May 24, 2012


This paper argues that the Arab countries are pursing knowledge-based economic development based on flawed practices from countries perceived to have made successful transitions to knowledge-based economies. Many of the archetypal models of the knowledge-based economy transition, such as the US and Ireland, face substantial economic development problems, such as record high youth unemployment rates, with tremendous societal implications The importation of the knowledge economy concept to the Arab region was accompanied by an emphasis on the welfare of individuals being tied directly to their success in gaining and maintaining higher qualifications and skills which could be sold in the labor market to match high wage employment opportunities expected to be generated by emerging high skill, knowledge-based industries. However, the high wage, high skills jobs associated with knowledge-based industries have not materialized in the region and are increasingly subject to competition from the emergence of low wage, high skill workers in other developing countries. The failure of Arab economies to deliver on the livelihood generating promises of knowledge-based development have caused economic frustrations which catalyzed the Arab Spring.

Keywords: Arab World, Middle East, skills formation, knowledge economy, skills development policy, economic development

JEL Classification: J24

Suggested Citation

Schwalje, Wesley, The Knowledge-Based Economy and the Failure of the Arab Dream: What the !#%@ Happened? (May 24, 2012). Available at SSRN: or

Wesley Schwalje (Contact Author)

London School of Economics & Political Science (LSE) ( email )

Houghton Street
London, WC2A 2AE
United Kingdom


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