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Key driver of economic growth

Successive governments have neglected the country's transition to a knowledge economy at the cost of better exports and healthy economy

Key driver of economic growth

The realisation that big money lies in high technology has overtaken the world by a knowledge revolution. Seeking dissemination/use of higher and technical knowledge besides industrial technology, innovations, information and communication technologies (ICT), the knowledge revolution is impacting all spheres of human activity, including socio-economic development.

As key driver of economic growth, knowledge now takes precedence over traditional drivers of growth, like physical capital and low-skilled labour. The trend of seeking, dissemination and use of knowledge that emerged in the second half of the twentieth century, has given rise to massive investments in electronics, pharmaceuticals, engineering goods, biotech products, computers, software, automobiles, aircrafts, defence equipment, alternative energy products, etc. Through e-commerce, IT is providing major opportunities for growth, while ICT is resulting in improved productivity in industry and agriculture and creating huge opportunities for businesses.

Countries that took the lead in using technology for their economic development have progressed rapidly and now rank amongst the developed countries of the world. The Asian countries that adopted the concept of knowledge economy rank among the fast growing countries, which are often cited as Asian tigers. Here, one may cite the example of Korea, whose exports have risen to $728 billion against $30 billion in the 1960s. Among late starters, one may cite the example of Malaysia. Presently, Malaysia accounts for 86.5 per cent of the total high technical exports of the entire Muslim world. It has achieved this distinctive position by spending 25 per cent of its budget on education over the last 30 years. Even the exports of a tiny country like Singapore, having a population of only five million, now stand at $577 billion.

Increase in awareness about the importance of science and skills in a country’s development has generated a lot of talk about giving priority to the teaching of sciences and demand-driven skills. But, it appears that so far we have failed to translate the rhetoric into widespread reality. A case in point is the capital city’s only polytechnic college which remains non-functional although its 200-room building was completed some 26 years ago in Islamabad’s Merabagwal village near Simly Dam.

There was a well-equipped Polytechnic Institute on Peshawar Road in Rawalpindi. This Institute was reputed to be one of the best in Asia. However, in the late 1970s, it was shut down by the despotic ruler of that time, who had no nerve for protests on the main (GT) road. As an alternate, General Ziaul Haq-led administration promised to establish a new polytechnic college in Islamabad. In 1985, when the government decided to build the institute in Merabagwal, the locals generously donated 232 kanals of land for this purpose.

Thought there is paucity of skilled labour in the country and great demand for experienced and educated skilled workers abroad, the tunnel-headed bureaucracy has yet to make arrangements for starting technical education classes in the Merabagwal polytechnic. During the PPP governments, former Interior Minister Rahman Malik thought of a novel use for the institute’s vacant building: He reportedly tried to establish a district jail in the building, but protests by the locals made him withdraw his plan.

Increase in awareness about the importance of science and skills in development has generated a lot of talk about giving priority to the teaching of sciences and demand-driven skills. But, it appears that so far we have failed to translate the rhetoric into reality.

While the situation is dismal, it bodes well for the future of the country that intellectual-scholars, like Professor Atta-ul Haq, remain engaged in efforts for creating awareness about the advantages of transition to knowledge economy. Think-tanks are also doing their best for raising the awareness level about the imperative need for transition to knowledge-based economy so as to spur the country’s economic growth.

On September 9 and 10, Islamabad Policy Research Institute (IPRI), in collaboration with the German Hanns Seidel Foundation, arranged in Islamabad a two-day national conference on “Building Knowledge-Based Economy in Pakistan: Learning from Best Practices. Federal Minister for Planning, Development and Reforms, Ahsan Iqbal, inaugurated this conference, while Minister of State Dr Miftah Ismail addressed its concluding session.

As the successive governments in Pakistan have neglected the country’s transition to a knowledge economy, the country’s exports remain dismally low. In the fiscal year 2013-2014, Pakistan’s exports stood at $25.13 billion, while the country’s imports increased to $45.11 that year, stated Professor Dr Ather Maqsood. In fact, the NUST (National University of Sciences and Technology) academician added, the country’s trade deficit has been constantly and continuously widening, reaching $19.98 billion in 2013-2014 against $1.21 billion in 2001-2002. This vividly highlights a non-promising trade profile due to limited products and lack of market diversification.

In knowledge-based economies, Dr Tariq Bashir, Head of Science Section of the Pakistan Council for Science and Technology, said that governments, industry and knowledge creating institutions — universities and R&D organisations — work together to create regional knowledge-hubs for generating knowledge and transferring/transmitting it to the community through education and training. For reaping optimal results and good dividends, one, however, needs to be careful and select only the real and valuable types of knowledge, cautioned Dr Asad Zaman, Vice-Chancellor, Pakistan Institute of Development Economics (PIDE).

NUST has established Pakistan’s first university-hosted National Science and Technology Park (NSTP), stated Amer Hashmi, Advisor NUST and Chairman NSTP. Its vision is “to capitalise on R&D collaboration between academia and industry, in order to create a knowledge-based economy using NSTP as the vehicle, with the ultimate aim of national socio-economic uplift.”

Dr Usman Mustafa, Head of PIDE’s Department of Management Sciences, stated that ‘knowledge age’ is the third wave of human socio-economic development. In the first wave — agricultural age — wealth was defined as ownership of land; while in the second wave — industrial age — wealth was defined as ownership of capital/factories. However, in the third wave, which is also called knowledge age, wealth was based on the ownership of knowledge and ability to use that knowledge to improve and create goods and services.

He cited the example of the Republic of Korea where knowledge was acquired, created, disseminated and applied to enhance economic development. According to a report issued by the World Bank in 1999: “Forty years ago, Ghana and the Republic of Korea had virtually the same income per capita. By the early 1990s, Korea’s income per capita was six times higher than Ghana’s. Some reckon that half of the difference is due to Korea’s greater success in acquiring and using knowledge.” Increased foreign competition and the need to acquire new sources of growth for moving into more profitable and wealth-generating stages of production warrant the urgent need for Pakistan’s transition to knowledge-based economy, he added.

If we wish to transform Pakistan’s economy into knowledge economy, all relevant organs of the state, in particular the Ministry of Science and Technology and Higher Education Commission, need to gear-up efforts for the country’s speedy transition to knowledge economy.

Alauddin Masood

alauddin masood
The writer is a freelance columnist based at Islamabad. He can be reached at [email protected]

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