The UN Arab Human Development Reports of 2002 and 2003 painted a relatively bleak picture of progress towards the development of knowledge economies in Arab States (UNDP 2002, 2003), citing the poor quality of higher education and the low level of research productivity in higher education as key issues to be addressed. Although GCC countries have generally much higher levels of economic performance than other Arab States, they do not out-perform in indicators related to R&D in higher education and have not shown improved performance in those indicators over the past few years. However, GCC countries perform significantly better than other Arab States in other indicators relevant to innovation performance such as macro-economic performance, openness to trade, access to capital, retention of national professionals, infrastructure and access to ICT technologies. A cohesive strategy is needed to improve R&D performance and will require, among other measures, a focused R&D strategy developed with key stakeholders, a strong engagement by the private sector in funding & conducting R&D, and government funding of research infrastructure, basic and applied research, and research degree programs. The experience of other "emerging innovators" can be used to fast-track the development of research capacity and productivity while ensuring it also addresses issues of national importance.