This is a departure from the erstwhile approach centred on market fundamentalism when most development was left to market forces and governments’ role reduced to bare minimum. That the market forces failed to deliver on their own, led to a change of heart on the part of the international lending agencies and the role of government was restored to the extent of developing an enabling environment for the private sector to flourish in.
The outlook changed from one of free-markets to a “market-friendly” approach. That is, the governments’ investment in physical and human capital would generate external economies to offset diminishing returns on capital and to promote the market mechanism. This “new growth model” too would not show the desired results. The state of physical infrastructure remains dismal, to say the least, due to a host of inadequacies on the part of tax mobilisers, tax payers, administrators, and policy makers alike.
The potential of human capital either remains underdeveloped or unrealised or is not utilised in the homeland due to an intricate web of factors that emanate from and point towards our under-developed state. The “new growth model” could, therefore, not be delivered upon by governments that were naïve enough to take on full responsibility for something they could not have moved by themselves. Are we in now to see yet another display of this same naivety?
After the failure of the “new growth model,” is the government being impelled to drive the whole process of industrialisation by itself? So it appears, from the recent developments and the “technologically-based industrial vision and strategy for socio-economic development” approved by the cabinet August 1, and released partially for public consumption.
The government is being advised, inter alia, to help in the development of the textiles sector by addressing the issues of regulatory environment, human resource development, and ensuring quality standards. The government is being further advised to help in technological development, provide financial and physical infrastructure, and close the technology gap with the developed countries’, especially in the areas of engineering and electronics industries. In leather, the government is expected, amongst other factors, to help improve quality and productivity.
How might the government improve quality, increase productivity, and ensure quality standards for the industry in the private sector when it could do none of this for the industry in the public sector it owned for a good three decades approximately? What makes the government think that the only major issue with these private sector units is skills and human resource availability when all of the state-owned enterprises (SOEs) could not run well enough despite some of the best skills and diploma/degree-holders it employed?
Z.A. Bhutto’s was a major revolution in terms of overall industry organisation and human resource engagement. if nothing else, at that stage. Prior to that. qualified engineers were hired as underpaid line supervisors and demand for MBAs did not quite exist in the private sector that could do with ‘baboos’ and ‘munshis’ instead. It was after state take-over that it was made mandatory for all production units to hire qualified engineers as well as MBAs in specified numbers. This was an attempt to introduce the concept of professional management for the first time in the country.
As for the workers, there was no dearth of talent either. The entire Nishan Jeep was produced in a SOE with all components manufactured within the country. The project was scrapped for reasons that many shudder to mention now. The idea of dual-fuel systems was put to test in one SOE and its sister concerns for the first time but would not gain popularity for another 30 years.
In anticipation of energy crisis, the idea of diesel fitted 4-wheel drive vehicles was conceived in one SOE. This would not see the light of the day due to cobwebs in the minds of a whole bunch of decision-makers at the corporation’s level who would later allow uninhibited imports of completely-built-up Toyota 4-wheel drives fitted with diesel engines instead of encouraging local production of the same.
Many might grin that this “professional” workforce showed no healthy financial results. For that matter, many baboo and munshi dominated units did not show healthy profits on paper either. However, the issue is not one of mere human resource (HR) availability. HR is a necessary but not a sufficient condition for organisational development as this must be led by an honest, committed, and visionary management at the helm. This highly crucial and highly relevant ingredient has not been factored in any development attempt made.
Governments do not develop HR specifically for production units in particular. Organisational managements need to find HR of which there is no dearth at the higher education level. They need to be subsequently trained and developed on a continuous basis which is entirely possible if training budgets are not appropriated by the influential for their shopping trips. Skilled workers too are available and they should then train the juniors on-the-job so that a continuous supply of skills is ensured.
This calls for not just the traditional human resource management (HRM) mode but it requires strategic HRM through which the HR managers are able to engage the workforce productively and creatively for the accomplishment of organisational mission.
A pre-requisite for strategic HRM, however, is visionary top-level leadership that aims at mission fulfilment with an eye on the future and not just on filling personal coffers in the near term. If an organisational management cannot make an organisation, no government can make it no matter what be the level of incentives it provides.
If the above desired kind of organisational climate prevails, quality philosophy becomes a mindset. If quality is the frame of mind, the exporting organisation will weather all odds to stay and grow in global markets of its choice. The idea is to stay informed and prepare in good time. For, it is the knowledge-gap that keeps us hamstrung and not the resource-gap as much. Resources we have in plenty that we do not even know about or do not want to see that again points to a knowledge-gap within.
In the new Industrial Vision, emphasis is on technology and we seem to be going back from even the “new growth model” to Solow’s neo-classical growth model in which only technology is emphasised to offset diminishing returns on labour and capital. While technology is important, equally or more important is “management technology” that is essentially required at the organisational level.
No industrial vision can be realised if only one player, that is, the government is made to assume full or disproportionately high responsibility and the remaining players’ status is discounted. There is a need for “collaborative planning” like it was done in western Europe following the Great Depression and also in Japan and East Asian countries. Due responsibility is then assigned to all the stakeholders.
In western Europe, the stakeholders also include the workers. In East Asia, it was called “guided capitalism” and the government facilitated the development of both the markets and the market players. An industrial vision that may stand a chance of seeing the light of the day should, therefore, include management experts, industrialists, business managers, and workers’ representatives in addition to the economist and the educationist who have already tried to give it shape on their own.
And, the model one might want to look at is the O-ring model that should include all variables and their complementarities. If one defective small component led to the explosion of the space shuttle Challenger, another wrongly specified industrial development model will again have low probability of success.