DECADES ago social thinker and futurist Alvin Toffler observed that society was experiencing too much change of too great a scope, thrust upon humans in too short a time. And that knowledge, infinitely generated, has become the most potent and democratic source of power in an age of knowledge-based economy.

In the trinity of power, he pointed out that the use of wealth and physical force was available to the rich and the powerful. In sharp contrast, knowledge was something available to even the weak and the poor.

Decades later, it is now universally recognised that modern economies do not run on physical assets alone. Huge investments worldwide in intangible assets encompass ideas, knowledge, technical skills and social relations. In the times of the Covid-19-triggered crisis, online businesses and academic activities have picked up fast. While information technology companies have prospered, traditional businesses have been badly hurt. Intangible investments have enhanced the quality of human capital — built by training and skills — to absorb, overcome shocks and find appropriate solutions.

Earlier this month the issue of human capital resurfaced in the national discourse as Pakistan’s ranking on human capital and capacity dipped to 118 in the Global Innovation Index (GII) among 131 countries surveyed and the economy started showing initial signs of recovery from the Covid-19 shock.

‘There is little or no demand for talents and innovative ideas in the country which is still being run according to regulations from the colonial era’

There is little or no demand for talents and innovative ideas in the country which is still being run according to regulations from the colonial era, says research fellow at the Pakistan Institute of Development Economics Shahid Mehmood. Whatever we are able to produce in terms of quality human capital, the talent is left with no choice but to seek job opportunities abroad. In 2020, Pakistan’s ranking on the GII at 107 was far behind regional peers like India (48), Nepal (95) and Sri Lanka (101).

Though remittances sent by overseas compatriots play a vital role in reducing current account deficits, they have no transformational role in the economy. The continuing surge in remittances is easing pressure on the external sector as the country’s export earnings currently lag behind remittances.

Acknowledging that technological innovation is recognised as ‘the predominant factor underlying the social and economic change’, economist and public policy expert Aqdas Afzal points out: ‘technology can never be a substitute for priorities, leadership and effective policies.’

“We lose trained manpower to other countries”, says Mr Mehmood, adding that the growth of modern economies is not possible without having a quality human capital base and a system that utilises that talent. On the other hand, he points out that industrialised countries have immigration policies that attract trained human capital and are complemented by a well-functioning system and quality institutions that can optimise their talents and skills.

To quote an example, with a total worth of $7.8 billion, a Pakistani-American Shahid Khan emerged as the 66th richest man in 2020 in the United States. He migrated to the US at the age of 16 with $500. As an engineer by trade, Khan bought an auto supplier outfit from his employer in 1980. His design for one-piece truck bumper was stated to be the basis for his success.

However the current trends in the foreign labour markets are not promising as over 0.4 million overseas compatriots are reported to have returned home during January–August. In the same period, 0.178m went abroad to take up foreign jobs against over 0.625m during entire 2018-19. The returnees need to be provided avenues for their livelihood.

It is time to return to the PTI’s original vision to establish a knowledge economy, unleash the potential of our youth and leapfrog in the future, Knowledge Economy Task Force (KETF) Vice-Chairman Dr Atta-ur-Rehman reminds policymakers.

He recalls that a project developed by the task force was initiated in last year’s public sector development programme starting with an allocation of Rs24.21bn.The allocation, he says, was however drastically cut down by 80 per cent to Rs2.2bn owing to the national emergency created by the coronavirus.

In a related development, a delegation of the Chinese technology giant Huawei led by the company’s Global Senior Vice-president (Technology) Hou Tao, which called on the prime minister on September 9, announced a plan to train 1,000 federal government employees. Supporting Prime Minister Imran Khan’s vision to create an IT workforce, Mr Tao said his company will help train university level students to equip them with the latest IT skills.

The failure of the ruling party to focus on education for the past two years is attributed by the prime minister, also KETF chairman, to the ‘game of survival’ it faced after coming into power. He explains: the first year was spent on stabilising the economy and the pandemic intervened in the second.

Now the State Bank of Pakistan (SBP) has launched Roshan Digital Account for non-resident Pakistanis (NRPs) which, it is said, would be fully integrated with Pakistan’s banking and financial system.

The overseas compatriots will be able to open bank accounts without being physically present in Pakistan, in any embassy and consulate. The account will provide them with a full range of banking services and investment opportunities including soon to be launched Naya Pakistan Certificates, stock markets and real estate. The digital accounts holders would be able to repatriate cash without the SBP’s approval.

However, what would prompt the diasporas to open digital accounts in Pakistan is not very clear, says an analyst.

“Empower the society to innovate,” says an expert in an article on the absence of innovation. The rapid growth of quality human capital, coupled with the creative ways for its employment in the domestic sector, is imperative to enable common citizens to fend for their livelihood and to achieve sustainable economic development.

Published in Dawn, The Business and Finance Weekly, September 28th, 2020