ISLAMABAD: The high-growth industries in Pakistan lack industry-specific action plans that set a long-term growth vision to match with the Fourth Industrial Revolution (4IR) aimed at consolidating plans for innovation, technology adoption, and skills development of employees, said a new study published by Asian Development Bank on Monday.

“The Industry Transformation Maps (ITMs) developed by Singapore that explicitly consider how innovation and technology will transform jobs and skills in each industry and could provide a useful reference, according to the study titled “Harnessing the Fourth Industrial Revolution through Skills Development in High-Growth Industries in Central and West Asia — Pakistan”.

A clear industry-specific action plan for the fourth industrial revolution adoption modeled after Singapore’s ITMs could strengthen coordination among stakeholders and facilitate long-term planning for firms and training institutions, it said.

The study presents analysis of data from online job portals from three countries — Azerbaijan, Pakistan and Uzbekistan — to assess trends in skills demand. Two focus industries were selected in each country that are crucial for growth, employment and 4IR. In Pakistan the industries covered were textile and garment manufacturing and information technology-business process outsourcing (IT-BPO).

The textile and garment manufacturing value chain in Pakistan is comprehensive and includes various stages of processing from cotton production to spinning, fabric manufacturing, dyeing and sewing of garments. There is potential for 4IR technologies to provide value across different stages.

Official statistics estimate that barring seasonal and cyclical fluctuations, textile products are around 60 per cent of national exports, with cotton products taking up the largest share.

In particular, Punjab is a key hub for the textile and garment manufacturing industry with approximately 70 per cent of textile and garment manufacturers in the country based in the province. National and provincial policies recognise the importance of the industry to the future growth of the Pakistan and Punjab.

The IT-BPO industry in Pakistan is at a nascent stage of development. In 2018, the IT-BPO industry contributed only 0.1pc to national employment and the entire ICT industry contributed only 0.53pc to Punjab’s employment. The government is targeting to take IT exports to $10 billion by 2025, backed by policies such as the exemption of income tax on IT services exports till 2025.

For Punjab, key findings of the study suggest that firms in both industries recognise the potential labour productivity gains from 4IR technologies but require additional support to adopt these technologies.

Textile and garment manufacturers estimate that the adoption of 4IR technologies could increase labour productivity by 35pc between 2020 and 2025, while IT–BPO firms estimate a 45pc increase. However, only 35pc of textile and garment manufacturers and 53pc of IT–BPO firms surveyed have a strong understanding of 4IR technologies and their applications, and a significant proportion would require additional support to reap the gains from adopting such technologies.

According to the study, only 35 per cent of textile and garment manufacturing firms in Punjab reported a good understanding of 4IR technologies and their applications.

The development of an industry transformation roadmap that addresses the limited awareness of 4IR technologies among firms and sets out measures to increase awareness and deployment must be a priority for policy makers.

Published in Dawn, May 16th, 2023