A Study on Lebanon’s Competitive Knowledge-Based Economy, Relative Strengths, and Shortcomings

Abstract

Lebanon faces several social, political, and economic challenges delaying the efforts to develop a sustainable economy and inclusive society. The advancement of the knowledge economy is critical to the future economic prosperity of Lebanon. This paper aims to scrutinize the state of the knowledge-based economy in Lebanon, focusing on five pillars, such as education and human capital, entrepreneurship, innovation system, economic and institutional regime, and information and communications technology (ICT), and to present recommendations for future action. The methodology is based on semi-structured face-to-face and phone interviews with stakeholders using two questionnaires. The paper finds that the process of transitioning towards a knowledge-based economy in Lebanon is influenced by two contrasting factors: the education system and the entrepreneurship culture, on the one hand, and the country’s political turmoil, on the other. Indeed, moving toward a knowledge-based economy in Lebanon is supported by its highly qualified and multilingual human resources, which is an outcome of the reliable educational system and reinforced by a robust entrepreneurial spirit. However, several issues, such as weak ICT infrastructure, incompetent public institutions, and the brain drain, hinder the transition to a knowledge-based economy. These results help clarify and critically analyze the present state of the knowledge-based economy in Lebanon, which has various policy implications.