Expanding the pool of innovators in Pakistan

It has long been understood that sustained growth and development requires sustained innovation


November 01, 2021

With a median age of 23 years, Pakistan is a predominantly young country confronted with a number of structural challenges. Extrapolating labour force data shows 100 million Pakistani youth entering the labour force in the coming decades. If the country wishes to promote sustainable economic growth, it must create new jobs to support the growth of its middle class. And that requires more innovation.

It has long been understood that sustained growth and development requires sustained innovation. Without innovation, capital investment will run into diminishing returns as both growth and development will slow down resulting in minimal new job creation. If we think of the economy as a machine, in Pakistan we have been concentrating on growing the economy by getting more people to turn the handle of the existing machine, whilst our competitors in the region have been building a longer term advantage through investing in a much better economic machine.

While societies can advance for a short while by making incremental adjustments to the status quo, long-term development requires entrepreneurship and innovation. When too large a portion of potential innovators and entrepreneurs choose either to seek rents within the context of the status quo or to leave the society altogether, development slows or comes to a halt. Creating a space for entrepreneurship and innovation in Pakistan would therefore require encouraging the subset of potential entrepreneurs and innovators who choose neither to conform nor to depart but to stay and build something new.

Furthermore, much more can be done in Pakistan to increase the pool of innovators and entrepreneurs in order to enable them to create the jobs of the future. Core to the model innovation is the observation that it spreads from person to person. It is a frame of mind we pick up from people around us. Instead of trying to get people excited about innovation, who might be unaware of its very existence, most innovation policy in Pakistan helps those who are already innovating. This approach leads to many lost potential innovators.

Anton Howes argues, “Everything else we worry about when promoting innovation, from funding to intellectual property rights, or from training to social acceptance, is in a sense downstream of it. This is not to say that such policies are unimportant, but that they only affect invention quite far downstream.” To truly increase innovation, Pakistan needs policies focused on what goes on upstream, before much of the supply of new inventors and innovators is inevitably siphoned off into distractions, dead ends, and failure. Increase the strength of the flow upstream, and everything downstream flows the faster too.

For instance, Dr Carl Benedict Frey at Oxford University says, “We know that children who are exposed to innovation early in life are much more likely to become inventors themselves. Thus, leveraging the educational system to expose more children to innovation in the formative school years seems like low-hanging fruit.” This approach has yielded positive results in many countries. Like in Estonia, the ‘I am an entrepreneur’ programme aims to promote entrepreneurship education in schools across the country.

Upstream policies such as the one in Estonia are difficult to formulate due to the problem of measurement in potential outcomes. However, this should not make such policies any less important as increasing the supply of individuals who desire to become inventors and innovators is possibly one of the most significant policies that any government can implement. As the 2006 Nobel laureate in Economics, Edmund Phelps, once remarked, “It is neither scientific discovery nor engineering expertise nor entrepreneurial talent that produces periods of extraordinary economic expansion but, rather, the willingness of people at every level of society to embrace innovation.”

It takes a creative entrepreneur to solve the problems in developing and marketing an innovation; it takes managers who solves the problem of evaluating the innovation’s likely gains, if any; it takes consumers to solve the problem of evaluating the gains, if any, of bringing an innovation home; and it takes financiers who can do better than choosing randomly in deciding which entrepreneurs to back. In sum, it takes a whole village for an innovation to be developed, launched and adopted.

 

Published in The Express Tribune, November 1st, 2021.

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