The road to knowledge economy

Peter Palchinsky, an engineer by profession and policy adviser of the Soviet Union, was executed in 1929 by the then tyrannical Soviet regime. His unpardonable sin was the independent opinion on the Soviet Union’s infrastructural, industrial and scientific ambitions at that time. He was of the view that keystones of a knowledge economy and technological advancement were political, social and educational. In short, he was against autocratic decision-making and a top-down approach to development. Some time ago, several aspects of his life were uncovered in the book, The Ghost of the Executed Engineer: Technology and the Fall of the Soviet Union. Palchinsky failed in his ambitions, and so did the Soviet Union in chasing the goal of becoming a knowledge economy.

Slogans of turning Pakistan into a knowledge economy have been echoing in the political corridors but the reality is that the country ranks 126 out of 140 countries in the global competitiveness indicator of the World Economic Forum — while India is ranked 55, Iran 74, Turkey 51, South Africa 49, Kenya 99, Ethiopia 109, Malaysia 18 and Indonesia 37. When it comes to innovation and sophistication factors — sub-indices of the same dataset — Pakistan is ranked 89, Indonesia 33, China 34, Sri Lanka 41, India 46, Turkey 56 and Ghana 65. I won’t delve into the accuracy and relevance of this (or other similar) indicator(s) in this piece, so will take the aforementioned ranking as an approximation of the current state of knowledge, institutions and competitiveness. If you ask anyone in the country about the reason behind this poor performance, the answer would be resource constraints. However, I feel that the question of the abundance or paucity of resources comes at a later stage. The foremost prerequisite is to be open to new knowledge and ideas, something which does not need a lot of money. A knowledge spillover can be achieved and sustained by attracting and respecting talent. Unlike in the erstwhile Soviet Union, government officers and policy experts are not hanged (at least by the state) in Pakistan on account of their independent opinions. But they are isolated and stereotyped for their independence of thought. Governments don’t want diversity of opinion on projects and plans. Resultantly, the public sector is no more a talent magnet.



Recently, a piece by Ayesha Siddiqa titled “The old man & the sea” appeared in this newspaper, which powerfully articulated our aversion to talent and lack of alternative voices in foreign policy circles. Unfortunately, the public sector is not unique in this regard. The business sector — and society as a whole — is also not open to diversity and talent. A routine practice is to appoint an ill-mannered and spoilt family member as chief executive instead of bringing professionals to run family businesses. Our business firms are as bureaucratic as the public sector. If you ask a business owner about the challenges he/she faces, they will give you a laundry list of governmental weaknesses while giving little thought to what can be done without the government — being energy efficient, focusing on product/process innovation, value addition, managerial excellence and so on. Innovation and knowledge are produced and transmitted in flatter and decentralised business organisations where ideas jumble up to produce new products and processes or improve the quality of existing ones.

Internationally, businesses are collaborating and pooling resources — even with their competitors — to bring innovation to their products and services. But deceptive practices and rent-seeking through allying with the power corridors appear to be the ultimate goals of many businesses in Pakistan. During my experience of managing public-private dialogue in the country, I rarely came across businessmen talking about collective gains. Instead, the focus was always on taxation issues and exemptions. The irony is that many of the so-called civil society organisations have also turned themselves into contractors instead of developing the civic capacity to address social, political and economic issues at the grassroots level. The education sector continues to suffer due to a host of factors. Developing a knowledge economy isn’t just about sending a higher number of kids to school, it is also about the quality of education and the way it is imparted and aligned with local and global needs.

Higher education institutions are the ideal platforms for cross-fertilisation of ideas if the academia can think beyond its current overwhelming focus on internationally-funded studies. However, the nascent effort of Information Technology University, Lahore to attract qualified faculty and to connect scholarship with industry and society is a remarkable shift. The Punjab government has also recently announced the development of a knowledge park for which details are still awaited. We need to be cognisant of the fact that concentration of high-value businesses emerges when there is a spontaneous interaction of diverse ideas and resources.

Public policy does have a role i.e., of providing quality infrastructure, enabling institutions, and funding for research and education. The objective should be to create an ambience for knowledge and innovation instead of imposing a solution. Society as a whole needs to demand and practise innovation. For example, parochial norms and dominance of big corporations in South Korea made the culture there averse to small-scale innovation and entrepreneurship. However, the new generation challenged these norms to demand space for new ideas and exploited knowledge spillovers from big corporations. South Koreans were successful in completely transforming their culture. And their government supported the revolution with the world’s highest per capita funding for research and development.

Let’s turn to cities as they are considered engines of growth and hubs of knowledge and innovation. In the middle of the last century, American urbanist Jane Jacobs advocated the fostering of mixed, lively neighbourhoods, and revolutionised the movement against top-down projects in New York City. She also critiqued Adam Smith’s idea of efficiency and came up with the notion that cities develop by adding new and better products/services, not with efficiency of existing activities. She wrote: “If we were to measure economic development rate of a city, we could not do so just by measuring its output in a year or any group of years. We would have to measure, rather, the additions of new work to its older output, over a period of time, and the ratio of new work to the older work.”

Our cities continue to make failed attempts to improve efficiency of existing low-value business activities. There is little thinking about diversity and new knowledge. The road to knowledge economy has to be paved with the fostering of enabling socio-political institutions and respect for talent and diversity.

Published in The Express Tribune, September 10^th, 2016.

Like Opinion & Editorial on Facebook, follow @ETOpEd on Twitter to receive all updates on all our daily pieces.