INTRODUCTION

This chapter introduces respectively the issues related to production, trade concentration and trade diversification as they have been experienced by Arab economies during the past periods.

DOI: 10.4018/978-1-4666-6268-1.ch005

of reports and publications, the economies of the Arab world appear to be dominated by a limited set of goods and services with a recent trend at­tributed to ICTs. Such a limited portfolio generates often vulnerabilities to shocks and translates to the trading patterns of these countries because of the reduced diversification of production and trade. Institutional and technological innovations do provide opportunities for diversification op­portunities through new competitive niches where production and trade could adjust to the knowledge flows and to the needs of international markets. Such a trend has been observed to be taking place in different Arab countries and mainly among those economies that are oil and gas based. These economies are now progressively involved in the sectors of financial services, banking, real estate and tourism, but the resilience of traditional sec­tors will not allow easily the required changes. Further inclusion and acceleration of access to knowledge through education, research, innova­tion with emphasis on ICTs are likely to identify new opportunities and markets with the creation of new enterprises in both old and new production and trading systems.

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The present chapter is composed of two ma­jor parts. The first one deals with a descriptive analysis of production and trade. It then focuses on the trends characterizing trade diversification and concentration with the estimation of the re­lationships with the most important knowledge components. The second part focuses on the special sector of ICTs as a driver of important changes in the Arab economies.