The four pillars needed for economic and social development are knowledge, technology, innovation and, perhaps most important of all, an honest, visionary and competent leadership that recognises the need for investing in human capital, building institutions for access, adaptation and creation of knowledge, in particular knowledge related to technology, its commercialisation and diffusion for productivity gains, employment creation and poverty reduction.

The first pillar, knowledge, can be subdivided into four critical sub-components that must all come together to make a coherent whole. These are compulsory primary education for all, and high quality secondary, technical and university education compatible with the best international standards. To make this happen, the emphasis must be on attracting the brightest and highly qualified professionals into the teaching profession. This will need to be coupled with a central single world-class examination system.

Pakistan is blessed with a large young population—about 90 million out of a population of 170 million are below the age of 19. We need to educate them to build our human capital to survive in the knowledge economy. This requires political will—the nation must decide that no matter what, at least 10 per cent of our GDP must be diverted to education. Malaysia has been spending 25 per cent of its budget for the last 30 years on education, and as a result its exports are $155 billion annually as compared to $19 billion only from Pakistan.

The second pillar is technology. Most developed countries prepare their technology-based development visions for concentrating resources in a few niche areas. A 'technology foresight' process involving intensive consultations with technical experts in various disciplines, industry leaders, and economists allows the identification of key projects that can change the fate of a country. Finland, with a population less than a quarter of that of Karachi, identified telecommunications and agro-forestry through such an exercise about 20 years ago. Today, just one leading cell phone manufacturer from this tiny country has exports of about $40 billion, more than double the total exports of Pakistan.

A similar exercise was conducted in Pakistan, as the result of a cabinet decision, in November 2003. Extensive consultations among the key stakeholders resulted in the preparation of technology road maps in the key sectors of our economy that recommended a shift from supply-driven to demand-and innovation-driven technology policy. The resulting document entitled, Technology-based industrial vision and strategy for Pakistans socio-economic development, was finally approved by the Cabinet on August 1, 2007 but it remains largely unimplemented. It has identified the technology, policy and skills gaps for addressing key issues confronting our industry.

We need to further strengthen our colleges and universities as well as our centres of excellence in selected disciplines to provide the needed research inputs for new technology development. High quality technical colleges with internationally recognised degrees and diplomas are urgently required to produce professional workers with the requisite skills needed by our industry. To produce industrial products conforming to world quality standards, the MSTQ (metrology, standards, testing and quality) system must be implemented.

The third pillar is innovation, which requires systemic flow of knowledge between producers and users of knowledge. We need to build the absorptive capacity of our firms to enable them to innovate—their learning ability, prior accumulated knowledge and organisational capabilities. It is only when we encourage entrepreneurship through appropriate measures that additional employment opportunities will be created. These include

(i) ease of starting new businesses so that a new company can be registered within few hours rather than several week or months;

(ii establishment of industrial clusters in electronics, engineering goods, pharmaceuticals, sports goods, textiles etc., with all relevant facilities such as built-up space and uninterrupted services so that an industrialist can start manufacturing within 48 hours;

(iii) tax incentives for the entrepreneurs who wish to establish technology-based businesses;

(iv) establishment of a network of Technology Parks where new ideas can be developed into products and processes. Some examples to emulate are the Ishfahan Technology Town in Ishfahan, Iran and the Middle East University Technology Park in Ankara, Turkey;

(v) access to a major Venture Capital Fund which can be used to develop good ideas into products;

(vi) incentives for promotion of contract research and for promotion of private sector research and development so that most research and development is carried in private industrial companies.

The fourth and most important pillar is that of an honest, educated, enlightened and competent leadership that can ensure strict adherence to merit, supremacy of the law and its quick dispensation and that understands what it takes to transition to a knowledge economy. In China many cabinet members are eminent scientists and engineers. In Korea, the minister of education, science and technology has the status of a deputy prime minister. These are examples for us to emulate.

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