ABSTRACT
It is commonly believed that postindustrial economies follow a specific pattern of development. Most economies transition from a preindustrial phase of development shaped by an agrarian society and feudal political system to an industrial phase of development shaped by major innovations in agriculture, manufacturing, transportation, and culture (though with varied political systems), to a postindustrial phase of development characterized by a knowledge economy and/or information society. In this third phase, economic well-being cannot be achieved by simply depending on manufacturing alone, but by developing and retaining a knowledge-intensive society reliant on individuals who are talented, educated and creative (see Stolarick and Chen, 2011; Florida, 2002; among others). The economic crisis of 2008 has been the most severe economic challenge to countries around the world since the Great Depression. From the US to Asia to Europe, many economies continue to suffer as global growth has slowed. However, one region seems to have been relatively insulated: the Gulf Cooperation Council (GCC) countries. GCC countries include Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, and the United Arab Emirates (UAE). In the midst of the Great Recession, GCC countries managed to cushion the negative effects of the crisis through strong revenues from high oil prices coupled with fiscal policies supporting low direct exposure to risky assets (Khamais and Senhadji, 2010). However, the volatility of hydrocarbon prices (decreasing in value from $147 per barrel in July of 2008 to $40 per barrel in December of the same year) has highlighted the importance of both amassing monetary reserves and ultimately diversifying GCC economies away from hydrocarbons (Johnson, 2011).
