An-Najah National University 
Faculty of Graduate Studies 

 

 

 

 

 

Building the Innovation Strategy of the 

Palestinian Industrial Sector based on a 

 Triple Helix Model 

) Industry, University and Government( 
 

 

 

By 

Hana M. Nayef Hajhamad 

 

 

Supervisor 

Dr. Rabeh Morar 

 

 
This Thesis is Submitted in Partial Fulfillment of the Requirements for 

the Degree of Master of Economic Policy Management, Faculty of 

Graduate Studies, An-Najah National University, Nablus, Palestine. 

2017 





III 

Dedication 

To teacher of humanity, Prophet Muhammad (peace be upon him). 

To my father’s soul, may Allah have mercy on him, and forgive him. 

To my mother, may Allah give her health and strength. 

To my husband (Sultan) & my sons (Qusai & Qais). 

To my imprisoned brother (Yahya), our hero.  

To my brothers (Abdallah) & (Abood). 

To my sisters  (Laila, Lama, Lubna, Yusra, Dina, Ola, Israa, & Mais). 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 



IV 

Acknowledgement 

First of all, I am very thankful to Allah, the Almighty, who provided 

me with all the strength I need and granted me the courage to complete this 

research successfully. 

 I thank all those who supported me during my research. 

I am also very grateful to Dr. Rabeh Morrar, my supervisor, for his 

support and help during my research. I thank him for his constructive 

suggestions, valuable supervision, great efforts and assistance are 

appreciated. 

I would also like to thank the committee for their efforts which will 

me in producing my research. 

I would like to express my deepest gratitude to my parents and 

family for their motivation, support, and encouragement throughout my 

research 

I am also very thankful to the Higher Council for Innovation and 

Excellence, especially Mr. Khaled Qalalwa, for their support and 

encouragement. 

I am greatly thankful for the staff of the Management of Economic 

Policy Program at An-Najah National University, for their professional 

material and knowledge.  

Many thanks to my colleagues for the friendly and beautiful memories they 

left for me to remember during our days of study. 

 

 



V 

 اإلقرار
 :العنوان تحمل التي الرسالة مقدمة أدناه، الموقعة أنا

Building the Innovation Strategy of the Palestinian Industrial Sector 

based on a Triple Helix Model (Industry, University and Government) 

  

ارة متا تمتت ا شت باستتننا  اص،الخ جهدي نتاج هو إنما الرسالة هذه عليه اشتملت ما بأن أقر
 علمتي بلق أو درجة أي لنيل قبل من يقدم لم منها جز  أي أو كاملة، الرسالة هذه وأن إليه حينما ورد،

 .أخرى  بحنية أو تعليمية مؤسسة أي لدى بحني أو

Declaration 

The work provided in this thesis, unless otherwise referenced, is the 

researcher's own work, and has not been submitted elsewhere for any other 

degree or qualification. 

 
 :Student's name : ةاسم الطالب

 :Signature  التوقيع: 

  :Date   التاريخ: 

 

 

 



VI 

Table of Contents 

Dedication ................................................................................................... III 

Acknowledgement ....................................................................................... IV 

Declaration ................................................................................................... V 

Table of Contents ........................................................................................ VI 

List of Tables ............................................................................................. XII 

List of Figures ........................................................................................... XII 

Abstract ..................................................................................................... XV 

Chapter One ................................................................................................... 1 

Introduction ................................................................................................... 1 

1.1 Overview ............................................................................................. 2 

1.2 General Problem Statement ................................................................ 4 

1.3 Objective of the Study ......................................................................... 5 

1.4 Research Questions ............................................................................. 5 

1.5 Research Hypotheses .......................................................................... 6 

1.6 Significance of the Study .................................................................... 9 

1.7 Limitations of the Study .................................................................... 10 

1.8 Structure of the Study........................................................................ 11 

1.9 Ethical Considerations ...................................................................... 12 

Chapter Two ................................................................................................ 13 



VII 

Literature Review ........................................................................................ 13 

2.1 Overview ........................................................................................... 14 

2.2 Triple Helix definition....................................................................... 14 

2.3 The triple helix model and innovation: ............................................. 16 

2.5 Conceptual Framework for Triple Helix Model: .............................. 20 

2.7 Innovation-Industry Collaboration .................................................... 29 

Chapter Three .............................................................................................. 35 

The Palestinian Industrial Sector ................................................................ 35 

3.1 Overview ........................................................................................... 36 

3.2 A historical brief on Palestinian Economics ..................................... 36 

3.3 The Structure of the Palestinian Economic sectors .......................... 40 

3.4.3 The number of industrial firms in Palestine ............................... 42 

3.4.4 Size of employment in the industrial sector ............................... 42 

3.4.5 Gross capital formation in the industrial sector ......................... 43 

3.3.5 The classification of the Palestinian industrial sector in terms of 

size ....................................................................................................... 43 

3.5 Challenges facing the Palestinian Industrial Sector .......................... 44 

3.5.1 Economics challenges ................................................................ 45 

3.5.2 Political challenges..................................................................... 45 

3.4.3 Legal challenges ......................................................................... 46 

Chapter Four ................................................................................................ 48 



VIII 

Innovation and Academia Industry Collaboration in Palestine .................. 48 

4.1 Overview ........................................................................................... 49 

4.2 Innovation in Palestine ...................................................................... 49 

4.3 The Palestinian Innovation Index ..................................................... 51 

4.4 Academia Industry Collaboration in Palestine ................................. 54 

4.5 Innovation-related Centers in Palestine ............................................ 55 

4.5.1 Higher Council for Innovation and Excellence (HCIE) ............ 56 

4.5.2 An-Najah Business Innovation and Partnership Center (NaBIC)

 ............................................................................................................. 59 

4.5.3 Palestinian Food Industries Union ............................................. 60 

Chapter Five ................................................................................................ 62 

Methodology approach ................................................................................ 62 

5.1 Overview ........................................................................................... 63 

5.2 Research Approach ........................................................................... 63 

5.3 Research Strategy .............................................................................. 64 

5.4 Research Data .................................................................................... 72 

5.5 Research Sample ............................................................................... 72 

5.6 Empirical Survey and Data Collection ............................................. 73 

5.6 Quality Standards for the Research Tool ....................................... 76 

5.6.1 Validity .................................................................................. 76 

5.7.3 Reliability ................................................................................... 77 



IX 

5.8 Research Limitations ......................................................................... 80 

Chapter Six .................................................................................................. 81 

Data Analysis .............................................................................................. 81 

(Descriptive Statistics) ................................................................................ 81 

6.1 Overview ........................................................................................... 82 

6.2 Respondents' Characteristics ............................................................. 82 

6.2.1 Number of Employees in the Respondent Establishments ........ 82 

6.2.2 Percentage of Females to Males in the Respondent 

Establishments ..................................................................................... 83 

6.2.3 The Amount of Annual Revenue of the Respondent 

Establishments: ................................................................................... 83 

6.2.4 Legal Status of the Respondent Establishments: ....................... 83 

6.2.5 Types of Manufactures Provided by Respondent Establishments

 ............................................................................................................. 83 

6.2.6 To Whom the Respondent Establishments Offer Services ........ 84 

6.2.7 Target Markets for the products of the Respondent 

Establishments ..................................................................................... 84 

6.3 Descriptive analysis .......................................................................... 85 

6.3.1 Innovation in industry ................................................................ 85 

6.3.6 Triple Helix Model ..................................................................... 91 

6.3.7 Academia Government Collaboration ....................................... 96 



X 

Chapter Seven ............................................................................................. 99 

Results and Discussions .............................................................................. 99 

(Econometric Models and Testing Hypothesis) .......................................... 99 

7.1 Overview ......................................................................................... 100 

7.2 The impact of Triple Helix Collaboration on Industrial Sector’s 

Innovation.............................................................................................. 100 

7.2.1 Product Innovation ................................................................... 101 

7.2.2 Process Innovation ................................................................... 105 

7.2.3 Organizational Innovation ........................................................ 109 

7.2.4 Marketing Innovation ............................................................... 113 

7.3 Innovation Obstacles and Probability of Collaboration with Triple 

Helix Actors .......................................................................................... 117 

7.3.1 Innovation Obstacles and Probability of Collaboration with 

Governments ..................................................................................... 118 

7.3.2 Innovation Obstacles and Probability of Collaboration with 

Universities........................................................................................ 121 

Chapter 8 ................................................................................................... 127 

Discussions and Recommendations .......................................................... 127 

8.1 Research Overview ......................................................................... 128 

8.3 Research Recommendations ........................................................... 141 

References ................................................................................................. 146 



XI 

Appendixes ................................................................................................ 153 

Appendix -A- ............................................................................................. 154 

Appendix -B- ............................................................................................. 155 

Appendix -C- ............................................................................................. 164 

 ب ........................................................................................................... الملخص

 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 



XII 

List of Tables 

Table 3-1: Palestinian Enterprises Size Percentage as Economic Activity 

Based on Number of Employees 2015 ................................... 40 

Table 3-2: Economic Activities Contribution in 2015 ................................ 42 

Table 4-1: The Final Indicators of Innovation in Palestine According to the 

Arab Creativity Panel ............................................................. 53 

Table 5-1: The Total Degree of Questionnaire Correlation ........................ 77 

Table 5-2: Cronbach's Alpha  Reliability Test ............................................ 78 

Table 5-3: Cronbach's Alpha Coefficient of the Questionnaire .................. 79 

Table 6-1: Target Markets for the products of the Respondent 

Establishments ........................................................................ 85 

Table 6-2: Scaling Degrees ......................................................................... 86 

Table 6-3: Application Degree of Product/ goods Innovation .................... 86 

Table 6-4: Application Degree of Process Innovation ................................ 88 

Table 6-5: Application Degree of Marketing Innovation ........................... 89 

Table 6-6: Application Degree of Organizational Innovation .................... 90 

Table 6-7: Evaluation Degree of Triple Helix Model ................................. 93 

Table 6-8: Evaluation Degree of Academia Government Collaboration ... 97 

Table 7-1: OLS Regression of the Relationship between Collaboration and 

Product Innovation ............................................................... 102 

Table 7-2: GLM Regression of the Relationship between Collaboration and 

Product Innovation ............................................................... 103 

Table 7-3: Wald Test for the Joint Significant of 9 Independent Variables/ 

Collaboration and Product Innovation ................................. 104 

Table 7-4: OLS Regression of the Relationship between Collaboration and 

Process Innovation ................................................................ 106 

Table 7-5: GLM Regression of the Relationship between Collaboration and 

Process Innovation ................................................................ 107 



XIII 

Table 7-6: Wald Test of the Joint Significant of 7 Independent Variables/ 

Collaboration and Process Innovation .................................. 108 

Table 7-7: OLS Regression of the Relationship between Collaboration and 

Organizational Innovation .................................................... 110 

Table 7-8: GLM Regression of the Relationship between Collaboration and 

Organizational Innovation .................................................... 111 

Table 7-9: Wald Test of the Joint Significant of 7 Independent Variables/ 

Collaboration and Organizational Innovation ...................... 112 

Table 7-10: OLS Regression of the Relationship between Collaboration and 

Marketing Innovation ........................................................... 114 

Table 7-11: Robust Least Squares Regression of the Relationship between 

Collaboration and Marketing Innovation ............................. 116 

Table 7-12: Wald Test of the Joint Significant of 8 Independent Variables/ 

Collaboration and Marketing Innovation ............................. 117 

Table 7-13: Logit Model of the Effect of Obstacles of Innovation and 

Cooperation with Government ............................................. 119 

Table 7-14: Wald Test of the Joint Significant of 10 Independent Variables/ 

Obstacles of Innovation and Cooperation with Government120 

Table 7-15: Logit Model of the Effect of Obstacles of Innovation and 

Cooperation with University ................................................ 122 

Table 7-16: Logit Model of the Effect of Obstacles of Innovation and 

Cooperation with NGOs ....................................................... 124 

Table 7-17: Wald Test of the Joint Significant of 12 Independent Variables/ 

Obstacles of Innovation and Cooperation with NGOs ......... 125 

Table 8-1: main research results ............................................................... 129 

 

 



XIV 

List of Figures 

Figure 2-2: Triple Helix Society ................................................................. 25 

Figure 2-3: Hypercycle in the Neo-Evolutionary Triple Helix Model ....... 27 

Figure 3-1: The Palestinian GDP 2000-2015 .............................................. 39 

Figure 5-1: The Structure of the Questionnaire .......................................... 75 

Figure 8-1: The Palestinian triple helix framework .................................. 137 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 



XV 

strial Sector Building the Innovation Strategy of the Palestinian Indu

 based on a Triple Helix Model 

) Industry, University and Government( 

By 

Hana M. Nayef Hajhamad 

Supervisor 

Dr. Rabeh Morar 

Abstract 

The triple helix model is a model that clarifies university, industry and 

government collaboration relationships. The contribution of the industrial 

sector to the gross domestic production (GDP) is only13.4% (BCBS, 2015), 

which attributed to the lack of research and development (R&D) and the 

lack of technological innovations. This has lead the Palestinian industrial 

firms to find innovative solutions to bridge the knowledge gap for better 

product development. Moreover, the industrial firms, with their own 

capabilities, are not able to fulfill their needs for knowledge and 

technology. Therefore, the triple helix model is considered one of the most 

important solutions where universities- as a centre of excellence and 

knowledge- can provide the industrial firms with the required knowledge, 

technological competences and R&D. This will be supported and facilitated 

by the institutional competencies of governmental bodies including laws, 

regulations, technological infrastructure, financial and non-financial 

subsidies, and environmental investment. The triple helix model will 

provide a conceptual framework for exploring innovation dynamics and for 

forming national innovation and development policy-making for the 

industrial sector. 



XVI 

This study works out the degree of interaction between the triple helix 

elements (industry, university and public sector) and their impact on the 

performance of the Palestinian industrial firms, and their ability to develop 

new innovation.  In this regard, a collection of primary data was collected 

from a sample for 340 industrial firms in the West Bank.  Then, a set of 

quantitative measures and econometric models were applied to answer the 

research questions in light of the data collected.  

Data analysis was based on a number of methods including the Ordinary 

Least Square regression (OLS), Robust Least Square, Generalized Linear 

Model (GLM), and Logit Model.  

The descriptive statistics show that 17.94% of the industrial firms 

collaborate with Palestinian universities in order to develop new 

innovations. 25.29% of the industrial firms collaborate with the Palestinian 

government in order to acquire knowledge necessary for the development 

of the innovation process. In addition, 4.71% of the industrial firms 

collaborate with non-governmental organizations (NGOs).  

The analysis of the relationship of collaboration between the triple helix 

members and product innovation found that the existence of an 

organizational body as the Higher Council for Innovation and Excellence, 

(HCIE) regulates the cooperation relationships between triple helix model 

actors. This is necessary for the triple helix model to succeed as a non-

conventional solution for the lack of knowledge and technologies that 

might be important for industrial firms to grow and compete in an open 

international economy.   



1 

 

 

 

 

 

 

 

 

 

 

Chapter One 

Introduction 

 

 

 

 

 

 

 

 

 



2 

1.1 Overview 

The Triple Helix model states that the university can play a vital role in the 

innovation process in an increasingly knowledge-based society ( Etzkowitz 

and  Leydesdorff, 2000). The hybridization of elements from industry, 

university and government to generate new institutional and social formats 

is important for the production, assimilation and application of knowledge 

needed for innovation output.  

Etzkowitz and Leydesdroff (1995) define the triple helix model as a “spiral 

model of innovation", having the ability to capture multiple reciprocal 

linkages at different stages of the capitalization of knowledge, including 

three main actors: university, industry and government. The overlapping 

between them is vital to generate new ideas, knowledge, and information. 

The triple helix model of innovation clarifies the synergies between 

university, industry, and government, where each of them provides one or 

more competences in order to provide technological and non-technological 

innovations. The role of universities is mainly embodied in providing R&D 

and new technology for the industrial sector so as to develop new or 

innovative products. The government or public sector enact laws and 

regulations to facilitate the relationship between universities and the 

industrial. 

The triple helix model has been employed in both developing and 

developed countries. For example, Martini et al. (2012) analyzed the 

capabilities of triple helix actors (academicians, local businesses and local 

government) and proposed a model of collaboration to develop the 



3 

economic corridors for Indonesia. They found that all economic corridors 

still had lots of opportunities to grow integrated R&D institutions, 

vocational education programs and innovation clusters.  Moeliodihardjo et 

al. (2012) evaluated the readiness of universities to contribute to the 

Indonesian government's 2011-2025 economic development strategy. They 

found that the role of each element in the triple helix model needs to be 

developed and formulated in order to obtain a systematic and beneficial 

interaction among them.  

Palestine, one of the developing countries, suffers from weak performance 

and fragility of in its manufacturing sector. It contributed around 14.1% to 

the GDP in Palestine in 2014 (PCBS, 2014). In addition to the political 

instability and the constraints imposed by the Israeli occupation, this also 

might be attributed to the weak innovation performance and the 

nonexistence or weak structure of innovation framework that organizes and 

facilitates the flow and exchange of knowledge and technologies among the 

key stakeholders of the innovation process. Thus, the industrial sector 

needs new technologies, skills and competencies to grow and develop, 

which can be obtained through a systematic process of knowledge and idea 

generation, built mainly on R&D efforts.  

Statistics show a very weak R&D performance for the Palestinian private 

sector, where only 25% of firms spent on R&D, and just 11 patents were  

recorded in Palestine in 2013 (PCBS, 2013). Therefore, we expect that 

collaboration with universities might provide the needed knowledge and 

technologies for the industrial firms through some type of collaboration 



4 

arrangements protected and organized by laws and regulations provided by 

public bodies. 

1.2 General Problem Statement 

The low contribution of the industrial sector to the Palestinian GDP (13.4% 

only in 2015) is due to lack of R&D and technological innovations. This 

drives the Palestinian industrial firms to find innovative solutions to bridge 

the knowledge gap that is needed for new product development. Also, the 

industrial firms with their own capabilities are not able to provide the 

needed knowledge and technologies. In addition, the collaboration between 

industrial sector and government, universities or NGOs are low in terms of 

innovation. Where 17.94% of the industrial firms collaborate with 

Palestinian universities in order to develop new innovations, and 25.29% of 

the industrial firms collaborate with the Palestinian government in order to 

acquire the necessary knowledge to develop the innovation process, where 

4.71% of the industrial firms collaborate with non-governmental 

organizations (NGOs).  Therefore, the Triple helix model is likely to be one 

of the most important solutions where universities as a center of excellence 

and knowledge can provide the industrial firms with the needed knowledge, 

technological competences, and R&D. This will be supported and 

facilitated by the institutional competencies of government bodies (for 

example, laws, regulations, technological infrastructure, financial and non-

financial subsidies, and investment environments).  

 



5 

1.3 Objective of the Study 

This research aims at figuring out the impact of the collaboration 

relationship between the triple helix actors on the innovation performance 

of the Palestinian industrial firms. It sheds light on issues concerned with 

innovation in the Palestinian industrial sector such a innovation 

performance, obstacles of innovation, the innovation environments and the 

degree to which the industrial firms cooperate with academic institutions, 

the public sector, and NGOs.   

1.4 Research Questions 

The main research question is: 

What is the role of cooperation between the triple helix model members 

(industrial firms, universities and public sector) on the innovation 

performance of the industrial sector in Palestine?   

Moreover, the research aims at answering the following questions to 

provide information on the innovation system in Palestine:  

1. What are the main obstacles facing the development of innovation in 

the industrial sector in Palestine? 

2. What is the main role of public institutions within the Palestinian 

government in the provision of institutional frameworks required for 

industrial organizations to build a strategic relationship with 

universities and other members of the society?  

3. What is the level of innovation application in the Palestinian 

industrial sector? 



6 

4. Do the industrial firms in Palestine depend on information sources? 

5. What is the percentage of industrial firms collaborating with any of 

other the triple helix actors (universities, governments, and NGOs)? 

6. Is the existence of an organizational body (for example; the Higher 

Council for Innovation and Excellence, HCIE) important for the 

success of the triple helix model in Palestine? 

1.5 Research Hypotheses 

In order to answer the research questions, analysis is based on answering a 

set of hypotheses: 

The first hypothesis: there are no statistically significant relationships at α 

= 0.05 between the collaboration relationships among the helix actors and 

the ability of industrial firms to enhance their innovation performance. This 

hypothesis is divided into twelve main hypotheses based on the 

collaboration relationship and the type of innovation: 

H10: There are no statistically significant differences at α = 0.05 in the 

collaboration relationships between the industrial sector and 

universities regarding the ability of industrial firms to introduce new 

product innovation. 

H20: There are no statistically significant differences at α = 0.05 in the 

collaboration relationships between the industrial sector and 

government regarding the ability of industrial firms to introduce new 

product innovation. 



7 

H30: There are no statistically significant differences at α = 0.05 in the 

collaboration relationships between the industrial sector and NGOs 

regarding the ability of industrial firms to introduce new product 

innovation. 

H40: There are no statistically significant differences at α = 0.05 in the 

collaboration relationships between the industrial sector and 

universities regarding the ability of industrial firms to introduce new 

process innovation. 

H50: There are no statistically significant differences at α = 0.05 in the 

collaboration relationships between the industrial sector and 

government regarding the ability of industrial firms to introduce new 

process innovation. 

H60: There are no statistically significant differences at α = 0.05 in the 

collaboration relationships between the industrial sector and NGOs 

regarding the ability of industrial firms to introduce new process 

innovation. 

H70: There are no statistically significant differences at α = 0.05 in the 

collaboration relationships between the industrial sector and 

universities regarding the ability of industrial firms to introduce new 

organizational innovation. 

H80: There are no statistically significant differences at α = 0.05 in the 

collaboration relationships between the industrial sector and 

government regarding the ability of industrial firms to introduce new 

organizational innovation. 



8 

H90: There are no statistically significant differences at α = 0.05 in the 

collaboration relationships between the industrial sector and NGOs 

regarding the ability of industrial firms to introduce new 

organizational innovation. 

H100: There are no statistically significant differences at α = 0.05 in the 

collaboration relationships between the industrial sector and 

universities regarding the ability of industrial firms to introduce new 

marketing innovation. 

H110: There are no statistically significant differences at α = 0.05 in the 

collaboration relationships between the industrial sector and 

government regarding the ability of industrial firms to introduce new 

marketing innovation. 

H120: There are no statistically significant differences at α = 0.05 in the 

collaboration relationships between the industrial sector and NGOs 

regarding the ability of industrial firms to introduce new marketing 

innovation. 

The second hypothesis: there are no statistically significant differences at 

α = 0.05 in the relationship between obstacles of innovation (internal and 

external) regarding the tendency of the industrial firms to collaborate with 

other triple helix actors (government, NGOs, and university). This 

hypothesis is divided into three main hypotheses based on the type of 

collaboration relationship: 

 



9 

H130: There are no statistically significant differences at α = 0.05 in the 

relationship between obstacles of innovation (internal and external) 

regarding the tendency of the industrial firms to collaborate with the 

government institutions. 

H140: There are no statistically significant differences at α = 0.05 in the 

relationship between obstacles of innovation (internal and external) 

regarding the tendency of the industrial firms to collaborate with 

universities. 

H150: There are no statistically significant differences at α = 0.05 in the 

relationship between obstacles of innovation (internal and external) 

regarding the tendency of the industrial firms to collaborate with 

NGOs. 

1.6 Significance of the Study 

The importance of the study arises from its ability to tackle the 

collaboration relationships between the triple helix modal actors as a 

solution to the lack of knowledge resources in the industrial sector.  

The study seeks to find a solution through innovation to increase the 

contribution of the industrial sector to GDP and employment, regardless of 

the many distortions caused by  the long period of Israeli constraints on the 

Palestinian economy since 1967. 

Moreover, the study introduces the triple helix model as a non-conventional 

solution for the lack of knowledge and technologies that are important for 

industrial firms to grow and compete in an open international economy. It 



10 

need be noted that Palestine considers the membership of the World Trade 

Organization (WTO) a priority which, if achieved, will add extra 

competitive pressures on Palestinian industries. 

In the era of globalization, no firm can survive or compete in the medium 

and long-run without innovation. Innovation has become the solution to 

competitive pressures at national and international levels. Therefore, one of 

the important points in this study is to introduce an innovative solution for 

Palestinian industries that enables them to grow and compete. 

1.7 Limitations of the Study 

The researcher faces two main limitations:  

First, geographical limitation as the study only tackles innovation in the 

Palestinian industrial sector and its collaboration with the other members of 

the triple helix model (universities, governments, and NGOs) in the West 

Bank, exempting both Gaza and some areas in Jerusalem which have been 

under Israeli occupation since 1967. These have been excluded due to the 

difficulty of accessing and collecting information. 

The weakness of innovation and triple helix model culture and 

understanding in Palestine, along with the lack of research and studies in 

relation to the innovation and the Triple Helix model in Palestine are the 

second limitation. 

 

 

 



11 

1.8 Structure of the Study 

The thesis comprises seven chapters. Chapter 1 includes an introduction, 

and the objectives and it outlines the whole thesis. Chapter 2 is the 

Literature Review including related previous research, studies, reports and 

analysis (local and international) which define the triple helix model, 

illustrate  its relation with innovation, and mention some of its applications 

in many developed and developing countries. Chapter 3 includes the 

analysis of the Palestinian industrial sector; it talks about the history of the 

Palestinian economy and the structure of its activities. It also introduces the 

structure of the Palestinian industrial sector, and the main challenges facing 

it. Chapter 4 talks about innovation and academia industry collaboration in 

Palestine through applications of innovation in the industrial sectors of 

many countries and applied innovation in specific industries. It presents the 

reality of innovation and academia industry collaboration in Palestine. 

Chapter 5 describes the methodology used including data collection, data 

analysis and the statistical models. Chapter 6 contains the results of data 

analysis (descriptive statistics) and discusses population characteristics 

(demographic variables). Chapter 7 contains results of data analysis 

(econometric models and testing hypothesis), and analyzes the research 

hypotheses which are tested using the Ordinary Least Square OLS 

regression, Robust Least Square, and Generalized Linear Model GLM. 

Finally, chapter 8 includes the thesis conclusions and recommendations. 

 



12 

1.9 Ethical Considerations 

The collected data from firms in the Palestinian industrial sector will be 

secret and will be used just for analysis purposes. No names or detailed 

data are to be published. 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 



13 

 

 

 

 

 

 

 

Chapter Two  

Literature Review 

 

 

 

 

 

 

 

 

 



14 

2.1 Overview 

In the last two decades, there has been  a rapid increase in the literature on 

the triple helix model of innovation and its applications in the different 

economy sectors (Etzkowitz and Leydesdroff (1995); Goktepe (2002), 

Rosenlund (2015), etc). This section  introduces literatures from both 

developed and developing countries in order to reach an understanding of 

how the mechanism of tripe helix models works and its importance in the 

enhancement of innovation. 

2.2 Triple Helix definition 

There is no unified definition for the triple helix model, but most of the 

definitions describe it as a collaboration relationship between university, 

industry, and government. Etzkowitz and Leydesdroff (1995) were among 

the first who discussed this model. They define it as a “spiral model of 

innovation", which is able to capture multiple reciprocal linkages at 

different stages of the capitalization of knowledge, including three main 

actors: university, industry and government. Similarly, Etzkowitz (2002) 

defines the triple helix model as a spiral model of innovation that captures 

multiple reciprocal relationships at different points in the process of 

knowledge capitalization. Viale and Ghiglione (1998) clarify that the triple 

helix model is a spiral (versus traditional linear) model of innovation that 

captures multiple reciprocal relationships among institutional settings 

(public, private and academic) at different stages in the capitalization of 

knowledge. Goktepe (2002) describes the triple helix model as a model of 

http://www.jrc.es/home/report/iptsreport/vol29/english/#Contacts


15 

technological development in terms of university, industry, and 

government relations.  

Leydesdorff (2013) denotes that the triple helix is not only the relationship 

between university, industry and government, but also the internal 

transformation within each of these spheres. He shows that the role of the 

university has been transformed from a teaching institution into one which 

combines teaching with research; a revolution that is still ongoing, not only 

in the USA, but in many other countries. In another work, Leydesdroff 

(2000) describes the triple helix model as the overlay which operates by 

reflexively selecting from the observables on the basis of expectations that 

are socially distributed. Expectations can be improved when they are made 

the subject of systematic research. Thus, expectations and their interactions 

are the basis of social order in a knowledge-based economy. This overlay 

continuously reshapes the observable institutions in university–industry–

government relations.  

Etzkowitz, et al, (2007) clarify that the triple helix model has three main 

components which are university, industry and government, and each 

component plays a prominent role in the process of innovation.  In a 

knowledge-based society; it is a movement towards collaborative 

relationships among the three actors, in which innovation policy is 

increasingly an outcome of interactions among the spheres rather than a 

prescription from the government or an internal development within 

industry. In addition to that, each institutional sphere “takes the role of the 

other” (Etzkowitz, et al, 2007) operating on a y axis of their new role as 



16 

well as an x axis of their traditional function. Rosenlund (2015) indicates 

that the triple helix modal can be used as an initial framework for such a 

dialogue through which the model is redefined by input from all sectors.  

In general, we can conclude that the triple helix model is a model that 

clarifies the collaboration relationship between university, industry, and 

government, where each of them provides one or more competences, to 

modern innovation development. 

2.3 The triple helix model and innovation: 

Sutz (2015) notes that university structures -molded by interactions with 

other social actors will be mediated by the distinct styles of national 

systems of innovation. The state in the National System of Innovation 

operates mainly in a widespread way; its duties towards the innovation 

health of firms and the whole country are a necessity to assure the smooth 

operation of a smart network of incentives able to push each part of the 

system towards the road of innovative. In the triple helix model, the role of 

the state undergoes some changes. The problem is no longer that of getting 

the innovative milieu right, but rather shaping the course and the direction 

of the innovative behavior at the micro and institutional levels. Egorov et 

al. (2015) introduced an econometric method; a quantitative assessment of 

the innovative activity of a region’s economy actors at different levels on 

the basis of the innovation dimensional space model. They assessed the 

role of every triple helix participant in the innovative development of the 

region as a whole. They considered the municipality a real economy sector, 



17 

and divided it into territory specific innovative clusters. Numerical 

calculations were used to analyze the degree of contribution of the main 

innovation actors (science/education, business, state) to the innovative 

development of the regions on the basis of 2012 statistics. The level of 

innovative development in the economy of a region under analysis is 

mainly determined by the innovative activity of science/education. This 

outcome indicates insufficient mobilization and exploitation of the 

creativity of the human mind at universities and R&D centers, in enhancing 

the development of the region’s innovative activity. In another article, 

Leydesdorff (2000) uses the ‘‘lock-in’’ model by Arthur, W.B. (1988). He 

explains that the lock in model can be extended to the case of two and even 

three sources of random variation, which is found in the triple helix 

university–industry– government relation. In the case of two sources, the 

stabilization of a technological trajectory is enhanced, whereas in the case 

of three sources, a complex regime can be generated. Conditions for lock-

in, lock-out, return to equilibrium, substitution, etc., are specified in 

relation to the assumed complexity of the dynamics under study with 

reference to the stage of development, that is, before or after lock-in. Some 

normative implications of the triple helix model of innovation can be 

specified. Leydesdorff and Etzkowitz (1998) developed the triple helix into 

a cursive model showing how an overlay of communications operates at the 

underlying institutions. Market selections, innovative dynamics, and 

network control provide different codes of communication at the global 

level. Local translations at the interfaces induce adaptation mechanisms in 



18 

the institutional arrangements. While two dynamics tend to evolve into 

trajectories, a regime of transitions emerges when trajectories are 

recombined. The emerging hyper-networks are expected to be in flux. 

Institutions can then be flexible in temporarily assuming the roles of other 

partners. Niche management and human capital management become 

crucial. In another work for Leydesdorff (2010), he examines the changing 

nature of knowledge-based innovation systems in light of the dynamic 

interconnections between the university, industry and government. 

Industries have to assess in what way and to what extent they decide to 

internalize R&D functions. Universities position themselves in markets, 

both regionally and globally. Governments make informed trade-offs 

between investments in industrial policies, science and technology policies, 

and/or delicate and balanced interventions at the structural level. Such 

policies can be expected to succeed insofar as one can anticipate and/or 

follow trends according to the dynamics of the new technologies in their 

different phases. The evolutionary perspective in economics can be 

complemented with a turn towards reflexivity in sociology in order to 

obtain a richer understanding on how the overlay of communications in 

university-industry-government relations reshapes the systems of 

innovation that are currently the subjects of debate, policy-making, and 

scientific study. 

In another article, Leydesdorff (2010) explains that the triple helix model 

was first defined as university, industry, and government. These 

institutional carriers of an innovation system are expected to entertain a 



19 

dually layered network: one layer of institutional relations in which they 

constrain each other’s behavior, and another layer of functional relations in 

which they shape each other’s expectations. He added an example on how 

the function of university-industry relations can be performed by different 

institutional arrangements such as transfer offices, spin-off companies, 

licensing agreements, etc. The institutional relations provide us with 

network data, but the functions in a knowledge-based economy are to be 

analyzed in terms of the transformative dynamics. The knowledge base of 

an economy can be considered a specific configuration in the structure of 

expectations which feeds back as a transformation mechanism on the 

institutional arrangements. In another work, Rosenlund (2015) notes that 

the triple helix model claims that interaction between university, industry 

and public sector, is the key to modern innovation development, which has 

become a common way to solve environmental problems. It is of 

considerable importance to gain more knowledge about this process. The 

objective of this research is to study and explain cross-sector collaboration 

using the interactive research method, characterized by joint learning and 

interaction with the participants. This is applied to two case studies. The 

first case was an international collaboration between representatives of the 

triple helix sectors. The triple helix framework was used both on the 

intended analytical level and at a management level closer to the actor level 

of the participants. The second case was a three-year environmental 

research project. This collaboration was extended to include more actors in 

the region during the process. The actual practice of these cases showed the 



20 

importance of a dialogue between participants. Triple helix can be used as 

an initial framework for such a dialogue through which the model is 

redefined by input from all sectors. Rosenlund (2015) claims that 

interaction between university, industry and public sector, is the key to 

modern innovation development. 

2.5 Conceptual Framework for Triple Helix Model: 

 Rosenlund (2015) explains that the idea of the triple helix model is a 

means for different spheres to solve problems and to support each other in a 

cooperative manner. Consequently, a university may apply an 

entrepreneurial approach to its research and education. Industry will need 

to appreciate the value of knowledge, research and education within 

companies, and the government, or the public sector in general can be the 

driver of this triple helix development by financing universities, projects 

and infrastructure. The triple helix model can be compared with the 

national innovation system and the regional innovation system approach. 

The triple helix does not restrict itself to any particular geographical level. 

This opens the way for a broader range of analytical perspectives when 

studying such a model empirically. In a triple helix model, innovations 

evolve by selection (market), stabilization (politics) and globalization 

(knowledge). When traditional innovation systems used the first two, they 

faced difficulties in performing on a global level. Rozenlund (2015) sees 

the national innovation system as a type of triple helix where the sectors 

keep their traditional roles, whereas in a triple helix, the sectors become 



21 

more interconnected through innovation processes. Predicting where the 

innovation actually occurs is harder in a triple helix model because of this 

interconnection. 

Etzkowitz (2007) elucidates that the triple helix begins from different 

starting points: from separate institutional spheres that operate apart from 

each other; or from any one encompassing and directing others. The global 

trend is towards a mode in which the various spheres are autonomous but 

overlapping, not entirely distinct but not completely merged either. There is 

a shift from bilateral to trilateral interactions, from single and double 

helixes to university-industry-government joint projects. A typology of 

innovation systems incorporates various national perspectives.  

There is Triple Helix I, a statist triple helix in which the state encompasses 

academia and industry and directs the relations between them. Triple Helix 

II, a laissez- faire triple helix, consisting of separate institutional spheres, 

where government, university and industry operate apart from each other. 

In this model, the university provides basic research and trained persons. It 

is expected that firms in an industry should operate completely apart from 

each other in competitive relationships, linked through the market, whereas 

the government is limited to addressing problems that can be defined as 

market failures, with solutions that the private sector cannot or will not 

support.  

Triple Helix III, an interactive model, which consists of overlapping, yet 

relatively independent, institutional spheres. Therefore, academia plays a 

role as a source of firm-formation and regional development in addition to 



22 

its traditional role as a provider of trained persons and basic knowledge. 

The government helps to support the new developments through changes in 

the regulatory environment, tax incentives and provision of public venture 

capital, while industry takes the role of the university in developing, 

training and research, often at the same high level as universities.  

Most countries and regions are presently trying to attain some form of 

Triple Helix III, with university spin-off firms, trilateral initiatives for 

knowledge based economic development and strategic alliances among 

firms (large and small, operating in different areas and with different levels 

of technology), government laboratories and academic research groups. 

These arrangements are often incentivized (but not controlled) by 

governments, whether through new “rules of the game” (Etzkowitz, 2007) 

or through direct or indirect financial assistance. 

In 2011, Martynovich wrote that the neo-institutional perspective (on the 

triple helix model) acts as an operationalization of an innovation system 

(regional, national, etc.) through specifying its main institutional actors: 

university, industry and government. The main focus of analysis in this 

case is on the networked interrelationships between these spheres. Neo-

institutional perspective suggests that the development of an economic 

system- in the situation of increasing importance of knowledge and 

innovation- is enhanced when the main institutional actors start taking the 

role of each other, stimulating interrelations among them and forming, 

therefore, interactive trilateral relationships. This overlay of 

communications becomes as important for the dynamics of the system as 



23 

the original knowledge infrastructure of university, industry, government 

and bilateral relations among them. However, such structure of institutional 

arrangements in a system is not given naturally – it is developed from one 

of the opposing standpoints: etatistic (statist) society (Figure 2-1-1) or 

“laissez faire” society (Figure 2-1-2).   

Figure 2-1: Etatistic (Statist) Society (1) or “Laissez Faire” Society (2) 

In statist societies, governments act as a dominant institutional actor, who 

coordinate the relations between university and industry, and play the main 

role in developing new initiatives. 

The role of the government in this case is limited to solving the problems 

of the so called “market failures”, which is supported by liberal political 

agendas and neo-classical economic schools. In such societies, the 

institutional spheres of university, industry and government are clearly 

divided, and the relations between them are performed ad hoc on the 

bilateral basis across decently defended boundaries. Each of the spheres is 

supposed to be appointed to the functions on the one-to-one basis. 



24 

University is for basic research, government for normative regulations and 

industry as a productive force. With the development of the knowledge-

based economy, two major transformations, which shape the brand new 

structure of an innovation system, can be distinguished. First, the formation 

of reciprocal relations between institutions in the system on the constant 

basis, and second, the replacement of industry by university as a core 

institutional actor. Metcalfe (2010) distinguishes three steps for this 

transformation, which reflect the evolutionary aspect of the model:  

1. Internal transformation in each one of the institutional actors, during 

which they “take the role of each other” – for example universities may 

take the “third mission” of wealth creation through firm formation, 

business oriented research, etc. as they keep the core competencies for 

education and basic research,. 

2. Formation of the new overlay of trilateral relations among the 

institutional spheres. To create a science park for private companies to 

acquire technologies and knowledge is one example. This knowledge is 

developed in a university, with governmental financial support. (The 

science park, in this case, acts as an intermediary organization between 

the three actors).  

3. Recursive development of the triple helix networks. This depends on 

developments achieved in each one of the helix model elements and on 

the past configuration of the networked overlay of the relations. 



25 

As a result, a complex system of relations is developed, forming some kind 

of a hierarchy of internal dynamics among the components, and the 

bilateral and trilateral relations among them (Figure 2-2). 

 

 

Figure 2-2: Triple Helix Society 

In this system, the traditional university transforms into the so-called 

“entrepreneurial university”, which becomes the main institutional actor in 

the system. Such form of a university is based on 5 norms: 

• Capitalization of knowledge. This states that the production and 

transfer of knowledge is to be driven through means of practical 

application and product development as well as disciplinary 



26 

advancement. Gibbons et al. (1994) state that this type of knowledge 

production is also the main idea of the “Mode 2” thesis. 

• Interdependence. This refers to the close reciprocal relations with 

governmental agencies and industry.  

  The entrepreneurial university should stay independent from the other 

institutional actors. 

• Hybrid organization. This refers to the combination of “core” and 

“supportive” missions of knowledge production and contribution to 

the society. 

• Reflexivity. This is achieved through a continuous reflexive 

reconstruction of the internal structure of a university along with its 

networks. 

To sum up, the neo-institutional perspective on the triple helix model is 

considered as one of the approximations for the structure of an innovation 

system (national, regional, etc.). The evolutionary character of the model is 

reflected in the mechanism of transformation to the triple helix society.  

The neo-evolutionary perspective aims at studying possible synergies 

between these functions, which are supposed to enhance the development 

of the knowledge base in the national (or regional) innovation system. The 

graphical representation of neo-evolutionary triple helix by Leydesdorff 

(2011) is different from – if not opposing – the neo-institutional one 

(Figure 2-3). 

 



27 

 

Figure 2-3: Hypercycle in the Neo-Evolutionary Triple Helix Model 

It is clear from the figure that all functions are highly interdependent. When 

two of the helices form bilateral relations, the third helix acts as a selection 

environment (context) through having mutual relations with the first two 

(but not with their interaction). Hence, the third element reduces the 

uncertainty in the system, when two helices interact. Brought together on 

the level of a system, such selective environments form the synergetic 

mechanism, which enforces the systemness of an economic as well as an 

innovative system and the ability to enhance self organization. This 

synergetic mechanism acts as the next-order system, coordinating the 

helices over time. The co-evolution between knowledge exploitation and 

knowledge production under some circumstances may form the 



28 

technological trajectory, due to the interdependence between demand for 

and supply of technologies. The synergy between knowledge production 

and normative control may give impetus to the formation of a national 

innovation system or enforce changes.  

In another work for Leydesdorff and Etzkowitz (1998), they explain that 

the triple helix is a model for analyzing innovation in a knowledge-based 

economy, and this model accounts for the phenomenon of emergence, that 

is, it helps us to understand how the innovation system is based on 

expectations. While the complex phenomenon of innovation is what has to 

be explained, different theories provide us with a variety of possible 

suggestions. More than a single explanation is expected because different 

perspectives are useful. To use an evolutionary metaphor, the perspectives 

can be considered as the 'genotypes' that reflect on specific interactions 

within and among the helices, while the complex dynamics of innovation 

are 'phonotypical,' that is, beyond the control of any given perspectives. In 

contrast to biological evolution, the 'genes' are not given, but constructed in 

the social, technical, and economic evolution of modern societies with their 

tendency to transform themselves and their interactions operationally by 

rearranging their configurations. In a new regime, the system is 

reconstructed from a set of its own previous states, including the natural 

environment and society's communal roots. Thus, technology celebrates 

community as a social achievement, including its ongoing redefinition of 

'nature' and 'culture.' 



29 

Leydesdorff (2000) writes about the evolution of innovation systems, and 

the current conflict over which path to be taken in university–industry 

relations. These are reflected in the varying institutional arrangements of 

university–industry–government relations. First, one can distinguish a 

specific historical situation which can be labeled as Triple Helix I. In this 

configuration the nation state encompasses academia and industry and 

directs the relations between them. 

2.7 Innovation-Industry Collaboration 

Several studies indicate the importance of innovation in industry. For 

example, Misthal and Eddy (2013) wrote a research about across industries 

on 20 countries. They found a clear correlation between innovation and 

success in growing revenues. In breakthrough innovation and growth, they 

report that the most innovative companies overall are growing significantly 

faster than the least innovative. The difference for industrial manufacturing 

companies is dramatic. The sector’s most innovative companies grew 38% 

over the last three years—nearly 12% per year—while the least innovative 

managed just 10% growth over the same period. Looking forward, the 

sector’s top innovators have somewhat more modest expectations, but 

they’re still targeting annual growth of 6.9%, while the least innovative 

companies are expected to manage just 3.6%. In another article, OECD 

(2009) confirms that to meet the growing environmental challenges, much 

attention has been paid to innovation as a way of developing sustainable 

solutions, also known as eco-innovation. This concept is gaining ground in 



30 

industry and among policy makers as a way to facilitate the more radical 

and systemic improvements in corporate environmental performance that 

are increasingly needed. This has led to understanding eco-innovation in 

the sense that solutions concern not only technological developments but 

also non-technological changes such as those in consumer behavior, social 

norms, cultural values, and formal institutional frameworks. Changes 

across all these areas, however, cannot be achieved by a single company.  

 Hongqi and Jianlong (2014) show that strategic emerging industry is a 

typical innovation- driven industry, and major technological breakthrough 

is the key to sustainable development of strategic emerging industry. Thus, 

from the angle of modular theory, they built radical technology innovation 

paths for strategic emerging industry: "peripheral modules →core modules" 

path, "core modules →architecture rules" path and "architecture rules 

→core modules" path. These paths are based on analyzing the connotation 

and modular characteristics of radical technology innovation of strategic 

emerging industry, and then validating the paths as being scientific and 

feasible with the example of a typical representative of high-end equipment 

manufacturing industry, radical technology innovation paths of large 

aircraft industry. The purpose is to provide theoretical and method support 

as well as decision references for strategic emerging industry to carry out 

the radical technology innovation.  

In addition, several authors studied the impact of innovation on one or 

more branches of industry. For example, Hurley and Hunter (2013) discuss 

that innovation in the oil and gas industry isn’t only centered on increasing 



31 

production; making sure that operations run safely is another top priority. 

That can mean finding new ways to monitor the integrity of materials in 

changing environments or creating new systems for inspection, 

maintenance and repair. And as the industry enters more challenging 

environments, innovation to ensure safety is becoming more vital. Take 

deep-sea drilling as an example. Hurley and Hunter (2013) found that one 

of the keys to driving growth is to focus on a balanced innovation portfolio 

which means finding the right mix of investments in incremental, 

breakthrough and radical innovation across the whole range of innovation 

areas. The right mix for oil and gas companies will depend on where they 

are in the value chain. 

Another study by ITRE committee, Hamza et al., (2015) describe  the  

mutual  reinforcement  of  open  innovation  and  additive  manufacturing  

and  address  recommendations for different policy levels. The  study  tries  

to  avoid two potential pitfalls: not  to  underestimate  the  potential  of  

open  innovation and 3D printing and at the same time not to overestimate 

it. The study found that technical innovation in additive manufacturing and 

3D printing is speeding up and is supported by European programmers. 

The social aspect, consequences for the labor market and the work flow and 

new business models need further research and development. 

On innovation in the automotive industry, Wyman (2015) analyzes the 

innovation strategies of the industry’s most successful auto companies. The 

study identifies the levers that car manufacturers and suppliers must pull to 

become state-of-the-art innovation leaders. Depending on the business 



32 

design of the supplier and OEM, four dimensions must be brought into 

alignment: innovation proposition, competence focus and collaboration, 

innovation business case, and innovation organization and structure. The 

leading suppliers in innovation management generate a 16 percent higher 

EBIT margin than their peers – all by employing a clear innovation strategy 

and balance along these four dimensions. Wyman concludes with five 

recommendations for innovation management in the automotive industry: 

- Increase customer orientation and marketing focus on R&D. 

- Generate a diverse innovation product and services' portfolio. 

- Improve R&D effectiveness and efficiency; reduce innovation risks. 

- Enhance the innovation culture and organization. 

- Align innovation strategy according to Oliver Wyman’s “Innovation 

Strategy Framework” 

In agriculture industry, Winger and Wall (2006) wrote a paper to provide a 

background context to discussions that will define further work in the area 

of agricultural food system innovation. They define Product Development 

as systematic, commercially oriented research to develop products and 

processes, satisfying a known or suspected consumer need. They define the 

innovation spectrum using terms such as “new to the world”, “product 

improvements” and “cost reductions”. This paper describes the food 

industry as being one in which there is a large number of new products 

offered to retailers each year and the inclusion of a new product almost 

always leads to discontinuation of another product. However, only a very 

small proportion of new products encountered radical changes, the majority 

faced incremental changes. Even then, 75% of new products were 



33 

considered to be failures. It was noted that in comparison to other industries 

(e.g. electronics, bio-technology), a very low level of R&D is undertaken. 

This was determined when the economic impact of the food industry was 

examined. Their analysis also shows that there is a much greater influence 

on the non-food sector from stimulating the processed food sector, rather 

than the raw material (agricultural) sector. It was noted that there is a 

stronger correlation between growth in manufacturing exports and 

processed food exports, than there is between processed food exports and 

primary products exports. It was noted that countries are seeking to capture 

value-added locally and implement trade regulations that encourage 

imports of relatively less-processed agricultural commodities. The paper 

concludes with three questions in relation to innovation in the food industry 

and specifically in the area of food product development. First, what 

actions can individual companies, or the private sector as a whole, take to 

improve food product development? Second, what can the public sector 

within countries do to create an environment that might engender more 

successful product development and can it obtain better leverage from 

existing investments in food sector R&D? Third, what can multilateral 

organizations do to assist individual countries or geographical regions to 

add value to agricultural products through food product development? 

Atalya et al. (2013) wrote a study which aims at examining the 

relationships between innovation and firm performance. Their study survey 

was conducted on top level managers of 113 firms operating in the 

automotive supplier industry which is one of the most innovative industries 



34 

in Turkey, for 2011. They concluded that technological innovation (product 

and process innovation) has significant and positive impact on firm 

performance, but no evidence was found for a significant and positive 

relationship between non-technological innovation (organizational and 

marketing innovation) and firm performance. 

 

 

 

 

 

 

 

 

 

 

 

 



35 

 

 

 

 

 

 

Chapter Three 

The Palestinian Industrial Sector 

 

 

 

 

 

 

 

 

 

 

 



36 

3.1 Overview 

In this part the researcher sheds the light on the Palestinian economics 

history and its structure based on economic activities and the size of 

enterprises. This sector suffer from many distortions, basically occupation 

and affect the economic growth.  Extensive details on the industrial sector, 

its structure and its components are necessary as it also contributes to the 

Palestinian GDP. 

3.2 A historical brief on Palestinian Economics 

Historically, Palestinian economics has a three joint period; the time before 

1994, the period between 1994 to 2000, and the period after 2000 up till 

today.  

Before 1994, Palestinian economics was fully under occupation. The Israeli 

occupation had control over of the elements of Palestinian production, land, 

natural resources, work, capital, management and organization. Making 

change in the Palestinian economic infrastructure requires the Palestinian 

economy to be totally independent from all Israel constrains. One-third of 

the Palestinian work force was employed in Israel; approximately 90 

percent of the imports were of Israeli origin; and some 80 percent of 

exports were sold in Israel or passed through its ports. The main features of 

Israel's policy were1: 

                                           
1 http://www.btselem.org/freedom_of_movement/economy_1967_1994 



37 

 Delaying, obstructing, and failing to encourage investment in the 

Occupied Territories. The civil administration bureaucracy and 

military legislation were used for this purpose. 

 Creating a "captive market" for Israeli goods by blocking imports to 

the Occupied Territories from other countries. 

 Encouraging mass entry of Palestinians into the Israeli labor market, 

particularly in construction, agriculture, and services. 

 Causing investment to fail in the development of physical 

infrastructure in the Occupied Territories, and channeling some tax 

revenues collected from Palestinians to the Israeli treasury, rather than 

investing them in the Occupied Territories. 

 Damaging agriculture, a main component of the Palestinian 

economy, by dispossessing Palestinians of their land, limiting the 

water quota, and restricting export of agricultural products to Israel. 

The period between 1994 to 2000 is known for the establishment of the 

Palestinian National Authority as a self-governing body. Abu Alqumsan 

(2005) notes that the Palestinian National Authority (PLA) has been trying 

to develop a constituent mechanism of action through an action plan for the 

formation of economic and institutional structures and for the coordination 

with other countries. He confirms that the PLA needs to activate the role of 

the productive sectors through development programs at macro and micro 

levels accompanied with the reformation of the financial and economic 

laws necessary to motivate both local investment and foreign direct 

investment.   



38 

The macroeconomic indicators of this period show a steady increase in 

economic growth and a decrease in unemployment growth. For example, 

the economic growth rate between 1998 and 1999 was 11% with 8.2% 

growth in real GDP, and the unemployment rate decreased by 1.8% for the 

same period (PCBS). This was mainly due to the state of the temporal 

political stability following the Oslo Accords accompanied with an increase 

in foreign aid granted to the Palestinian Authority, mainly for infrastructure 

projects, as well as an increase in employment in the Palestinian public 

sector and in Israel.  

Despite these positive statistical results, we cannot conclude that they 

represent a real economic development in terms of failure of economic 

policies to achieve economic pillars and props necessary for the survival of 

the positive economic indicators including: low competitiveness for 

Palestinian products, widening the trade deficit, and increasing the role of 

service sectors; mainly public services, while the role of productive sectors 

is diminished. 

 The next period started with the breaking out of the second Intifada at the 

end of the year 2000 and since then, Palestine has witnessed a dramatic fall 

in all economic indicators at micro and macro levels. Siege and closure 

against the Palestinian territories in the West Bank and Gaza, and the 

destruction of the infrastructure (roads, airport, public institutions, 

industrial infrastructure, etc.) stand behind this fall.  

Figure (3-1) shows the Palestinian real GDP for the 2000 to 2015 period. 

Because of the intifada, GDP decreased between 2000 and 2002. However, 



39 

GDP started to increase following 2002, and since 2007 it increased from 

4913.4 million US dollars to reach 7721.7 million US dollars in 2015 

 

Figure 3-1: The Palestinian GDP 2000-2015 

But, until now, the Palestinian economics is still suffering from distortions 

and weaknesses in the macroeconomic indicators. For example, the 

Palestinian nominal GDP reached 12,673 million US dollars in 2015, while 

it was 12,715.6 million US dollars in 2014. The nominal GNP per capita in 

2015 reached 2863.9 US dollars while it was 2960.1 US dollars in 2014. 

(PCBS, 2016). Theses distortions are a result of many reasons like wars 

that lead to the destruction of the Palestinian economy every time it tries to 

stand on its feet. The state of interdependence existing between the 

Palestinian economies on the one hand and Israel and tangles on the other 

hand caused the transitional phase of the Oslo Accords (1994-2000) to fail 

in strengthening the independence of the Palestinian economy.   

 

 

 



40 

3.3 The Structure of the Palestinian Economic sectors  

The Palestinian economy is described as a small sized enterprise economy, 

as most of the Palestinian enterprises are small and medium (SMEs). Table 

(3-1) elucidates the size of the Palestinian sectors in terms of the number of 

employees. It shows that about 90% of enterprises in Palestine are small 

and medium (SMEs). Enterprises are classified as SMEs if they employ 

less than twelve employees in industry, transport, and storage sectors; less 

than seventeen employees in construction sectors, or    less than eight 

employees in trade sectors.  The services sector is considered an SME 

when it employs less than fifteen employees, while he information and 

communication sector is an SME when it employs less than sixteen 

employees. 

Table 3-1: Palestinian Enterprises Size Percentage as Economic 

Activity Based on Number of Employees 2015 

Economic 

activities 

Palestinian enterprises size 

Small Medium Large 

No. 

employees 

percent No. 

employees 

Percent No. 

employees 

Percent 

Industry 1-3 68% 4-11 27% 12 and 
above 

5% 

Construction 1-5 59% 6-16 31% 17 and 
above 

10% 

Trade 1-2 80% 3-7 18% 8 and 
above 

2% 

Services 1-3 80% 4-14 17% 15 and 
above 

3% 

Transport and 

storage 

1-4 53% 5-11 32% 12 and 
above 

14% 

Information and 

communication 

1-3 60% 4-15 32% 16 and 
above 

8% 

Source: PCBS, 2015 



41 

Regarding the contribution of each economic sector to the GDP, data from 

the Palestinian Central Bureau of Statistics (PCBS) for 2015 show that the 

service sector contributes to about 49.5% of GDP, 17.7% for wholesale and 

retail trade, 13.4% for the industrial sector, 8.3% for the construction 

sector, 5.9% for information and communication technology, 3.3% for 

agriculture, and only 1.9% for transport and storage. 

It is clear that the level of economic activities varies. Service activities and 

other branches ranked first in the Palestinian economy in terms of value 

added and employment, followed by wholesale and retail activities, and 

industry activities, while transport, storage and farming activities occupied 

a lower rank. As for the average worker's share of value-added, information 

and communication, activities ranked first, followed by service activities 

and other branches, then industrial activities. Daily wage nominal rate 

reached its highest value in information and communication activities 

followed by service activities and other branches. It had less value in 

transport and storage activities along with agriculture activities. 

Regarding employment share, data in table 3.2 show that the service sector 

contributed to 42.1% of total employment rates in 2015, while the 

industrial sector's contribution was only 13.7%, with a real daily wage of 

66.1 NIS per labor. Despite its low contribution to employment rates 

(around 1%), information and communication activities had a real daily 

wage of 108 NIS per labor, which is the highest among other economic 

sectors.  This might be attributed to the high skills required for jobs in the 

information and communication sector which leads to high value added and 

productivity.  



42 

Table 3-2: Economic Activities Contribution in 2015 

Economic Activities Contribution to Employment 

Rate (%) 

Real Daily Wage NIS 

/Labor 

Agriculture 8.7 46.2 

Industry 13.7 66.1 

Construction 9.1 77.5 

Wholesale and retail trade 20.0 50.0 

Transport and storage 5.4 39.3 

Information and 

communication 

1.0 108.2 

Services and Other 

Branches 

42.1 86.4 

Source: PCBS, 2015 

3.4.3 The number of industrial firms in Palestine 

Data show that there were around 18,662 industrial enterprises in Palestine 

in 2015, distributed in the West Bank with 13594 facilities (73%) and 

5,068 in Gaza Strip (27%). 

3.4.4 Size of employment in the industrial sector 

 The Palestinian industrial sector employs 90483 employees, 75% in the 

West Bank, and 25% in Gaza Strip. In addition, the industrial sector's 

contribution to value added is 1458699.9 thousand dollars, 21.5% in the 

West Bank, and 78.5% in Gaza Strip. But the industries which contribute 

the most to the value added are manufacture of food products and other 

non-metallic mineral products, followed by manufacture of furniture and 

manufacture of fabricated metal products, except machinery and 

equipment.  



43 

3.4.5 Gross capital formation in the industrial sector 

Palestinian industrial sector contributes to 30347.1 thousand dollars of total 

capital formation (91% in the West Bank and 9% in Gaza). The food 

products sector has the largest contribution to gross capital formation in the 

Palestinian industrial sector with 13376 thousand dollars, followed by basic 

pharmaceutical products and pharmaceutical preparations, and other non-

metallic mineral products. Also rubber and plastic products contribute to 

gross capital formation with 4419, 3024.1, 2204.3 thousand dollars 

respectively. Other sectors do not contribute to gross capital formation like 

remediation activities and other waste management services, other transport 

equipment, and coke and refined petroleum products. 

3.3.5 The classification of the Palestinian industrial sector in terms of size  

The Palestinian industrial sector is characterized as small in terms of size. 

Small enterprises which employ less than four employees form about 68% 

of the total industrial firms. Medium firms which employ from four to 

eleven employees form about 27% from the total industrial firms, whereas 

large enterprises which employ more than eleven employees represent only 

about 5% of the number of Palestinian industrial enterprises  

The small enterprises are important in developing economies as in 

Palestine; they have several benefits as: 

 Increasing the value added of products, by producing many goods 

and services. 



44 

 Decreasing the unemployment rate even to a small rate, by 

employing some of the Palestinian working forces. 

 Increasing self-employment of graduates from universities and 

institutes, especially in the professional and technical fields. 

 Encouraging individual initiatives, skills and talents, especially those 

that do not require significant funding to implement. 

 Exploiting the savings of individuals, especially that the savings of 

members of the Palestinian society are low due to the low average 

per capita income which equaled 2864 $ in 2015. 

 Increasing the role of Palestinian women in the labor market, which 

usually helps in creating traditional and agricultural projects and 

others. 

 Establishing small enterprises as the first step for the development 

and expansion in the future so as to become big enterprises. 

3.5 Challenges facing the Palestinian Industrial Sector 

Industrial sectors in states around the globe suffer from several challenges. 

These challenges differ from one state to another pursuant to economic and 

political stability and the level of development. The Palestinian industrial 

sector suffers continuous challenges because of Israeli occupation and the 

sieges. Following is an illustration of these challenges. 

 

 

 



45 

3.5.1 Economics challenges 

 These include production elements as land and water sources, which are 

controlled by Israeli occupation. Add to that, almost 85% of inputs are 

imported via "Israel".  Consequently, the Palestinian economy is dependent 

on Israel. The Ministry of National Economy estimates the Palestinian 

domestic product share as only 20%; 70% from Israel. Another issue is the 

absence of a Palestinian currency and the use of the Israeli shekel with its 

low value. As a result, Palestinians' import from inputs, machines, 

equipment and raw material is more expensive leading to high costs on 

Palestinian industrial enterprises. Another challenge is the lack of 

appropriate infrastructure for industrial zones, in terms of roads, transport, 

communication, water and electricity networks. 

3.5.2 Political challenges 

Due to the Israeli occupation, the Palestinian industrial sector suffers from 

many political challenges including the political instability, the presence of 

occupation, and the intifada cascade through every few years along with 

siege and border closing. Such situations make it difficult to import 

production requirements from overseas market, or to export Palestinian 

products to foreign markets.  The Paris Protocol was signed in 1994 

between PLO and Israel and was incorporated as a supplement into the 

Oslo Accords in 1995. The protocol cancels any fees or customs between 

Palestinians and the Israeli occupation. Palestinians are not allowed to 

impose fees or customs less than those imposed by the Israeli occupation 



46 

on imports from any other country. The protocol also identifies specific 

lists of goods that Palestinians can import with specific quantities from 

certain Arab and Islamic states and other countries under specific 

conditions. 

3.4.3 Legal challenges 

 Legal challenges are those related to strategies of establishment and 

expansion, in terms of the long and complex procedures of project 

registration, the large number of required documents, and the duplication of 

certain fees like license fees for profession. The Palestinian Presidential 

Decree No. (8) of 2011 concerning income tax1, in the fourth chapter on 

Tax rates and segments, Article (16) imposed  an income tax on enterprises 

by 15%. Another legal challenge is the Palestinian Investment Promotion 

Law affecting mainly small and medium enterprises which accounts for 

95% in this sector. This law targets the 5% big enterprises. The Presidential 

Decree No. (7) of 2014, on an amendment to encourage the Palestinian 

Investment Law No. (1) of 1998, and its amendments2, Article (8) imposed 

a tax on new industrial enterprises which employ more than 24 employees; 

new industrial enterprises which export more than 40% of  production; new 

industrial enterprises which use 70% of domestic components (equipment 

and raw materials), and existing industrial enterprises who hire 25 new 

employees. These enterprises can benefit from tax incentives. Examples of 

incentives are the 5% income tax rate for up to five years starting from the 

                                           
1 http://muqtafi.birzeit.edu/pg/getleg.asp?id=16266 
2 http://legal.pipa.ps/files/server/Law%20on%20the%20Encouragement_Merged.pdf 



47 

date of making profit and not exceeding four years; and the 10% income 

tax rate for a period of three years starting from the end of the first stage, 

and then calculated as valid percentages and slides. But in Article (12), 

businesses and real estate projects and real estate development, electricity 

projects of all kinds, communications, crushers, quarries, and corporate 

developments on the concession contracts of the Council of Ministers 

engaged in monopolistic companies are enterprises excluded from tax 

incentives. 

 The absence of effective laws for the protection of innovation in terms of 

intellectual property rights and product patent is also a legal challenge 

affecting the Palestinian industrial sector. 

 

 

 

 

 

 

 

 

 

 

 

 

 



48 

 

 

 

 

 

 

 

 

 

Chapter Four 

Innovation and Academia Industry Collaboration 

in Palestine 

 

 

 

 

 

 

 

 

 

 



49 

4.1 Overview 

Innovation is a necessity for both developed and developing countries to 

stay on the path of development. Palestine needs innovation in every sector 

especially with the suffering caused by occupation and its control over 

boarders and markets. This chapter highlights Palestinian innovation, 

innovation index, academia industry collaboration, in addition to some 

innovation-related centers such as the Higher Council for Innovation and 

Excellence (HCIE) and An-Najah Business Innovation and Partnership 

Center (NaBIC). 

4.2 Innovation in Palestine 

Innovation is the process of translating an idea or invention into a good or 

service that creates value or for which customers will pay. Any idea to be 

called an innovation, must be replicable at an economical cost and must 

satisfy a specific need. Innovation involves deliberate application of 

information, imagination and initiative in deriving greater or different 

values from resources, and includes all processes by which new ideas are 

generated and converted into useful products. In business, innovation is 

often achieved   when ideas are applied by the company in order to further 

satisfy the needs and expectations of the customers1.  

Palestine, as any country, needs innovation to stimulate economic 

development to be a knowledge society. Khatib et al. (2013) analyzed a 

community innovation survey on two major Palestinian industrial sectors, 

                                           
1 http://www.businessdictionary.com/definition/innovation.html 



50 

namely quarrying and stone fabrication and the food and beverages sector. 

The analysis revealed high innovative potentials in both sectors; where 

employment, export, and revenues are clearly improved in innovative 

enterprises. They also analyzed the importance of cooperation between the 

industrial sector, higher education and R&D institutions, considering the 

lack of such cooperation a major problem that should be tackled in order to 

strengthen the enterprises’ ability to innovate. 

Palestine is one of the developing countries that suffers from weak 

performance and the fragility of the manufacturing sector which only 

contributed to 13.4% of the GDP in Palestine during 2015 (PCBS, 2015). 

The political instability and the constraints imposed by the Israeli 

occupation, can be considered as a cause of the weak innovation 

performance and the inexistence or weak structure of innovation 

frameworks that organize and facilitate the flow and exchange of 

knowledge and technologies among the key stakeholders of the innovation 

process. Thus, the industrial sector needs new technologies, skills and 

competencies to grow and develop.  These can be obtained through a 

systematic process of knowledge and idea generation, built mainly on R&D 

efforts. Despite the importance of R&D, the statistics are weak, because it’s 

very poor in Palestine. A research and development survey was carried out 

by PCBS, in 2013.  It reached the following findings:  

1. Research and Development Personnel: In 2013, there were 8,715 

employees in R&D, representing 5,162 full-time equivalent (FTE) 

workers. There were 4,533 researchers, which represent 2,492 FTE 



51 

researchers, including 3,510 male and 1,023 female researchers. 

There were 566 FTE researchers per one million inhabitants.  

2. Research and Development Outputs: The major outputs of R&D in 

2013 were 72 international awards and 116 local awards, 149 

international standard book numbers (ISBN), and nine patents. 

Research was distributed by fields of research as follows: 26.7% 

studies and consultations, 34.4% basic research, 30.6% applied 

research, and 8.3% experimental research. 

3. Expenditure on Research and Development: The total expenditure on 

R&D was USD 61.4 million, representing USD 24,641 per (FTE) 

researcher. The governmental sector contributed 56.1% of all R&D 

expenditure, non-governmental organizations contributed 20.9%, 

and higher education contributed 23.0% of total expenditure on 

Research and Development.  

So, we expect that the collaboration with universities might provide the 

needed knowledge and technologies for the industrial firms through some 

types of collaborative arrangements protected and organized by laws and 

regulations provided by public bodies. 

4.3 The Palestinian Innovation Index 

Developing a Palestinian Innovation Index is very important to provide an 

initial database of private institutions, official bodies and researchers in 

Palestine. It is also important to assist the decision-maker in developing 

successful and effective policies in this regard. It enables Palestine to be 



52 

enlisted within the Arab Innovation Index, which has been published 

annually since 2014. The index helps assess the level of innovation in 

Palestine compared with other Arab countries as well as developing 

countries that have similar economic conditions (PCBS & Morrar, 2016).  

In 2016 and in cooperation with the PCBS, Morrar (2016) developed a 

Palestinian Innovation Index based on the Global Innovation Index, and the 

Arab Innovation Index. He divides the indicators to inputs and outputs; the 

inputs contain the legal system, the human element and research, the 

infrastructure of information technology and communication, the size of 

partnership in innovation, and the flow of knowledge from abroad, 

supported by innovative projects. The outputs contain intellectual products, 

and goods and services of a creative nature. The author found that a large 

number of the indicators from the Global Innovation Index, and the Arab 

Innovation Index are not available in Palestine. He concludes with the final 

indicators of innovation in Palestine according to the Arab innovation 

panel, as in the table (4-1) below. 

 

 

 

 

 

 

 



53 

Table 4-1: The Final Indicators of Innovation in Palestine According to 

the Arab Creativity Panel 

Indicator  Year Value 

Population (million) Mid 2016 4.82 

Population aged 25-64 years (in thousands) Mid 2016 1.691 

GDP at current prices in US $ (billion) 2015 12.6 

Share of goods and services in GDP 2015 18.3% 

Input of Innovation 

Human Resources 

Higher education graduates per 1000 population (25-64 

years) 

2011\2012 20.9 

Number of PhD graduates in higher education 2011\2012 1 

Number of graduates of higher education 2011\2012 37383 

Percentage of science graduates of higher education 

graduates 

2011\2012 7.9% 

Percentage of  engineering graduates of higher education 

graduates 

2011\2012 8.4% 

Percentage of science and engineering graduates of higher 

education 

2011\2012 16.3% 

Number of R&D staff 2013 8715 

Number of R&D staff in full time equivalent 2013 5162 

Number of enrolled in secondary vocational education 2014/2015 2734 

Enrollment in education 2014/2015 721004 

Empowerment 

Foreign direct investment ratio of GDP 2014 0.9% 

Foreign direct investment (US $) 2014 120 

The quality 

Total Tertiary Students' Achievement in Mathematics and 

Science (TIMSS) 

2014 824 

Eighth Grade Students in Mathematics (TIMSS) 2014 404 

Eighth Grade Students in Science (TIMSS) 2014 420 

Total commodity exports in US $ (million) 2014 943.72 

Exports of high-tech goods in US $ (million) 2014 24.9 

Percentage of information technology from exports 2013 0.3% 

Percentage of exports of goods with heavy technology of 

commodity exports 

2013 2.7% 

Intellectual products 

Applications for resident patents 2015 18 

Registration of resident trademarks 2015 915 

Industrial design registration 2015 37 

Source: PCBS, 2016 



54 

4.4 Academia Industry Collaboration in Palestine  

The discussion on industry-academia collaboration has increased in 

Palestine within the last few years, aligned with global trends in this field. 

To build a strategic collaboration based on a win-win relationship is crucial 

for the industrial firms to provide the R&D and knowledge required to 

grow and develop.  

In Palestine, Abu Hanieh et al. (2015) discuss the existing status of industry 

academia partnership with relevance to engineering education and the 

horizons of implementing new scenarios and strategies in developing 

countries, particularly in Palestine. To strengthen the relationship between 

academia and industry, they propose an innovative model built on 

“awareness and market needs feedback” in order to create modern learning 

techniques which are capable of bringing the two sectors together. They 

found that a strong industry-academia partnership is likely to be optimal for 

understanding constrains and real life settings, and will reflect on the 

solutions provided by engineering graduates to serve more sustainability. 

This can lead to improvements in sustainable development and significant 

increase in the added value. Abu Hanieh confirms that industry-academia 

partnership can be applied on two tracks; the first track is based on 

curricula development, while the second track is based on taking modern 

structural measures.   

In another study, Albydah and Saleh (2016) found that the link between 

industry and universities is weak which affects the innovation system in 

Palestine. Regardless of the low role that the Palestinian government plays 



55 

in knowledge generation and transfer, the development of such knowledge 

and technology transfer collaboration will provide the environment needed 

to raise the level of innovation by providing the knowledge and technology 

needed for all participants. They clarify the whole knowledge and 

technology transfer process by identifying the factors that affect the 

knowledge and technology transfer collaboration, determining the 

stakeholders of these collaborations and evaluating the current states of 

these factors according to each participant's role in the knowledge and 

technology transfer collaborations. Depending on exploratory and 

qualitative research methodology, they found that universities are the core 

participant in the knowledge and technology transfer, and this system must 

start with the researcher’s development and end with the transformation of 

the university to the entrepreneurial form. They confirm that the industrial 

sector must be involved in knowledge and technology transfer 

collaboration, to help in providing necessary knowledge, technology and 

profit. . 

They found that it is important to build independent knowledge and 

technology centers inside universities to identify and coordinate knowledge 

and technology transfer process activities with the existence of the right 

structure and experts inside these centers.  

4.5 Innovation-related Centers in Palestine 

Despite political instability and the lack of financial and non-financial 

resources, many trials have been developed in the last few years to build 



56 

the infrastructure for R&D and innovation in Palestine such as innovation 

centers and centers of excellence in universities, technology incubators, the 

Higher Council for Innovation and Excellence. 

4.5.1 Higher Council for Innovation and Excellence (HCIE)  

HCIE was founded in 2012 following a Palestinian presidential decree. 

HCIE is taking in consideration the importance of its existence, which is 

putting more responsibility on its role in leading change through its faith 

and confidence in the potential creative capacities and the energies of the 

Palestinian people. It recognizes the vital role of creativity in building up 

the State of Palestine and strengthening the steadfastness, resilience and 

prosperity of the Palestinian people. HCIE seeks to play a leading role in 

consolidating a culture of innovation and excellence among the Palestinian 

community and very fair and just empowerment of all those innovators and 

creative people. It aims at strengthening the structure of creativity systems 

in various sectors, so that creativity becomes the mainstay of economy and 

the knowledgeable society which we seek.  

HCIE has several strategic goals: 1 

1. Dissemination and entrenchment of a culture of excellence and 

innovation amongst the Palestinian people, especially among the 

youth. This is achieved  through: 

a. Setting up a code that includes values, directives, and standards, 

functioning and stimulating creativity and excellence. 

                                           
1 http://www.hcie.ps/ar 



57 

b. Embracing creative people and providing them with care and support 

in various forms. 

c. Working with the Ministry of Education and Higher Education to 

develop policies, regulations and supportive programs for innovation 

and excellence, especially at the level of primary education and 

higher education. 

2. Strengthening the structure of the innovation system within the 

various sectors. This is achieved through: 

a. Supporting institutions that work in the field of innovation and 

excellence, strengthening institutional capacities and stimulating 

the coordination and concerted efforts and the integration of their 

roles in order to maximize the collective impact, and put an end 

to the duplication and fragmentation of efforts. 

b. Encouraging the private sector in Palestine and in the Diaspora to 

increase its investment in the field of innovation and creativity, 

and stimulating the issue of establishing multi-party partnerships 

including the public sector, private sector, the national sector, and 

universities and institutions concerned so as to form an 

organizational structure or framework that stimulates and 

enhances innovation, and facilitates the realization of economic 

and developmental outcomes. 

c. Building information systems, knowledge resources, and 

providing information services that support the individual and 

public corporations working in the field of innovation.