The factory of the world is clamouring with technological changes as evidenced by the breathtaking leaps in Artificial Intelligence.
In Sweden, homes are now being heated using residual energy from the internet. Self-healing glasses, electric, and autonomous vehicles are on the horizon. Our neighbours are building eco-friendly and futuristic cities.
The world is making a transition to a ‘knowledge economy’— a term coined by Peter Drucker in his book Effective Executive. This is an economy where attention is given to building human capital and intangible assets like intelligence, which lead to innovations. In this race, where does Pakistan stand?
We, it seems, are still obsessed with jobs and systems of the past. The stereotypical mix of skills that we are inclined to learn, namely, engineering, business administration and medicine, create saturation in the job market and also stifle economic growth, hindering any transition into a knowledge economy.
Almost 2 million people are being added to the Pakistani workforce every year, but the addition of jobs has not been in tandem to that.
Another point to consider is the issue of brain drain. The Ministry of Overseas Pakistanis and Human Resource Development states that over the last five years around 2.765m have left the country.
While the world rushes towards a knowledge economy, we are still infatuated with the sights and sounds of factory and labour
It is instructive to highlight the importance of human capital at this point. When youngsters do not find the ground to practice what they have learned, it disturbs the demographical and structural pattern of the economy as well.
We are also lagging behind when it comes to digital innovation. The Global Information Technology Report 2016 that measures the extent to which a country can take advantage of the digital revolution, places Pakistan at 110 out of 139 countries.
There is almost little to no focus on robotics and artificial intelligence. Blatant ignorance exists regarding building an economic vision and narrative. If there is a vision, it is shackled in documents only. The whole process begins with a mindset, which then needs to be inculcated in the masses.
It goes without saying that change cannot be triggered with a push-start button. It starts with investing money in Research and Development (R&D).
According to the Global Innovation Index, Pakistan ranks 119 out of 128 countries, one of the least innovative. Currently the share of expenditure for R&D is an insignificant 0.29 per cent. The minimum that UNESCO recommends is one per cent. Universities here focus on the quantity of publications they can produce per year instead of the quality.
Rate of savings has been dwindling in Pakistan. High rates of savings encourage investments, which further encourage initiatives. The fall in savings is in turn due to inflation and disparity in income levels in our country. This once again takes us to GDP growth which leads to unemployment and job opportunities, which takes us back low investment, hence closing the loop.
Books published per year is another useful indicator of a country’s educational and economic progress. India ranks among the top three countries in Asia and the Middle East with 90,000 books per annum. The World Culture Score Index shows India is the leading country in reading with 10.42 hours per week. Pakistan is nowhere to be found in the top 30.
We may have improved our ranking in the Global Competitiveness Index of the World Economic Forum 2017-18. From the bottom 20 we have moved up seven places to now stand at 115. However, there is a need to open more sectors of the economy and make a smooth transition to a knowledge economy.
This will not be possible until or unless due attention is given to R&D, teaching policies and methodology, and an overhaul in the curriculum itself.
According to World Economic Forum report, The Future of Jobs, 65pc of children entering primary school will face jobs that do not even exist today. The world is changing; preparing the people for the future and creating more opportunities is the solution to this growing unemployment.
Equally important is the need to build a narrative that accentuates the significance of adapting to the fast-moving world. We do not want to be left behind while we are capable of competing.
While the world rushes towards a knowledge economy we remain infatuated with the sights and sounds of factory and labour. Reliance on only these is not only dangerous for posterity, but also tantamount to taking a step back while the world moves ahead.
Published in Dawn, The Business and Finance Weekly, January 29th,2018