Technology, innovation the way forward for our economy

Policies need to go hand-in-hand to promote these two elements


Shah Faisal Afridi July 17, 2016
Policies need to go hand-in-hand to promote these two elements. PHOTO: FILE

LAHORE: Experts assert that for any country to remain competitive two major driving forces are essential –technology and innovation. Any market today is measured by the variety of brands it offers its consumers and this can only be possible with these two elements.

Healthy fusion of technology and innovation in any given society would mean that branding and consumer culture will receive a strong boost, paving the way for economic growth. Therefore, domestic markets should offer a hotbed for technology and innovation to develop.

World economy has reached the point when trade policy has become dependent on a country’s level of innovation. It is therefore impossible to craft a trade policy without understanding the level of innovation of a society.

In order to establish a productive and efficient domestic market, it is important to maintain an open economy which can easily be integrated into the global economy, and for this, we must make markets at home more competitive.

If we are able to develop these domestic markets, we will be able to develop brand names for high margin exports. Pakistan needs to develop new approaches to strengthening domestic markets. The economy is a system that needs to work as a whole, with domestic and external trade supporting each other.

It is in domestic markets that all manner of innovation and entrepreneurship can take place which can later become a source of export and foreign exchange earnings.

Domestic commerce

Domestic commerce primarily includes retail and wholesale trades, restaurants and hotels, construction, communication, financial institutions and real estate services.

This sector contains the largest number of small and medium enterprises. Indeed fixing this sector should be the new SME policy. If we make this sector boom we will have a more egalitarian development.

Historically, domestic commerce has played an essential role in providing a solid base to some of the world’s strongest economies. England, for example, was known as ‘a nation of shopkeepers’ before the industrial revolution.

Well developed and large scale domestic markets are known for providing a testing ground to new products and techniques. New brands have greater chances of succeeding and becoming well known internationally when tested in well-developed domestic markets. Leading international brands have flourished through opportunities they were able to avail in their home markets.

Pakistan needs to do much more and adopt measures that will create a thriving and well-established system for domestic commerce to compensate for these exogenous factors.

We need to review three main reforms in order to promote domestic commerce. Firstly, the government needs to look at reforming city zoning laws and building regulations to allow land use to respond to market demand. Secondly, there is a need to push for openness and competition to bring international quality goods in the market and promote innovation. And lastly, our legal framework must support the complex needs of diverse domestic commerce.

According to the Global Competitiveness Report, Pakistan ranks poorly in terms of domestic commerce measures: business sophistication, market efficiency as well as property rights protection. In all three measures, Pakistan ranks lowest when compared to other Asian countries including India, Indonesia, Thailand, Malaysia and China.

What competition means

It is only through competition with foreign markets and services that our domestic markets will improve. Pakistan can benefit heavily from sharing knowledge as there are existing methods and technologies available internationally that an open economy can take advantage of.

The public and private sector should follow a vibrant vision of transforming Pakistani cities into dynamic commercial hubs. The government should encourage fresh thinking and allow technical experts to become part of the country’s economy.

Pakistan’s trade policy should not only promote exports but promote all trade, both at home and abroad. The new trade policy should be centred to encourage competition, create opportunities and provide an enabling environment for domestic commerce to flourish in. Before the policy making process, it may be beneficial to investigate why local brands have been unsuccessful globally.

Therefore, the proposed strategy should be focused on improving the quality and quantity of wholesale and retail outlets, ultimately linked to urban management and land use.

Pakistan needs to take major steps to improve the functioning of its internal markets. Given the high levels of corruption and poor law and order situation, reforms need to be introduced to remove inefficiencies from the markets as well as provide support to businesses.

The writer is the Pak- China Joint Chamber of Commerce and Industry President 

Published in The Express Tribune, July 18th, 2016.

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COMMENTS (1)

Haji Atiya | 7 years ago | Reply An article replete with a jumble of the usual platitudes and recommendations...buy why is the prerequisite human resources development not even being mentioned for a knowledge-based and SETI-driven economy to achieve critical mass and takeoff in the first-place ?
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