Abstract Proposal for ‘Individual paper.’ The paper would ideally fit into a panel related to development/change in the Arab Gulf countries og in MENA in general. Title of paper: The transformation from Rentier states to Knowledge based Economies: The case of the Arab Gulf countries. Abstract It is a difficult task for any country to transform into a knowledge economy, due to the fact that a successful knowledge economy rests on an intricate relationship between, entrepreneurship, motivation, and enabling economic and institutional regimes. A successful knowledge economy thus entails more than just having a well-educated population. As Nobel laureate Joseph Stiglitz articulates, successfully establishing a knowledge economy requires a broader change in culture which focuses on citizens’ participation (in economic activities), ownership of processes and active learning so that motivation, aspirations and entrepreneurship will become an intrinsic ethos of the individual. This paper takes its theoretical point of departure in Rentier State Theory (RST) to contextualize the dynamics within the Gulf Economies. It aims to analyzes the challenges and opportunities facing the planned transition from rentier economies to knowledge economies in the GCC countries. The analyzes carried out in the paper include the following: First, the concept of a knowledge economy will be defined and discussed as it relates to the Gulf context. Second, the current status of the GCC countries in regard of a knowledge economy will be analyzed, using data from the World Bank Knowledge Economy Index and the Global Competitiveness index. These data highlights that in an international comparison the GCC states perform well in regard to their enabling environment and quality of ITC infrastructure, but performs poorly on the two pillars of education and innovation. The paper proceeds to analyze and discuss reasons for the meager performance on these two pillars. Using data from extensive field work (especially in UAE) and key documents the quality and performance of the educational system at primary, secondary and tertiary level is analyzed. In recognizing that human resources are closely tied to the individual person, Beblawi’s concept of ‘rentier mentality’ is applied to facilitate a discussion of incentives. One key finding is that the Gulf Arab youth lack broader societal incentives to pursue both learning and innovation. Finally, the paper advocates that both job content (aiming for high job content) and especially increases in job productivity are important drivers for facilitating the transformation to knowledge economies. --- end ---