The knowledge economy and development in light of the economic shocks in Arab world

With the beginning of 1990, world moved towards knowledge in the economy as sustainable development engine depending on production factors and economic growth rate based on four basic pillars of the knowledge economy: (1) economic incentive, (2) institutional system, (3) education, human resources and innovation, (4) communication technology information. In light of the economic shocks facing the Arab world, as the most recent was the COVID-19 pandemic in 2019, which led to decline in economic growth rates for Arab countries. The main objective of study is the effect of economic shocks on the knowledge economy and development in Arab countries during (1991: 2020). The study relied on secondary data and used descriptive economic analysis and the statistical analysis represented by the simple regression method. The study showed the most important factors affecting on an employment share of real GDP as an indicator of the production inputs contribution and technological progress in real GDP. The results of the study cleared a positive relationship between economic shocks and the barrel of oil price, as well as it showed the difference in the impact of the barrel oil price on the employment's share of real GDP in dollars in the Arab countries. The study indicated the importance of foreign direct investment in advancing development in the Arab world.