Modernising industry

High-growth industries in Pakistan were in trouble even beyond the economy went haywire, with the Asian Development Bank (ADB) criticising the sector’s lack of action plans or other clearly defined long-term growth models that could benefit them, let alone the country’s workforce. Industrial policy has long been driven by protectionism, populism and cronyism, which is why several industries refuse to modernise or become competitive, while several others have been kept alive for political reasons, and a disproportionate number of politicians and their kin become successful ‘industrialists’ within a few years of being elected.

The ADB offered Singapore’s industrial development plans as an example of how Pakistan can “explicitly consider how innovation and technology will transform jobs and skills in each industry”. It is notable that the industries examined in Pakistan as having growth potential are relatively small in Singapore — textile and garment manufacturing, and IT and business process outsourcing. While the former forms the cornerstone of Pakistan’s industry, it has failed to modernise and is now reliant on government support and customer loyalty, rather than competitiveness. Meanwhile, the tech categories have suffered immensely due to misaligned priorities and self-sabotage through poor oversight and misguided ambition.

The report notes that so-called Fourth Industrial Revolution (4IR) technologies could be a game changer for Pakistan. But besides the fact that much of the industry is still a generation behind, 4IR technologies include several forms of automation, which could have severe consequences for employment if the adoption of new technology is driven solely by modernisation, rather than expansion through new industrial units that can compensate for jobs lost to automation by creating new openings. More worrying, however, is that barely half of IT firms surveyed were even familiar with the application of 4IR technologies. Having a high-tech sector that is unfamiliar with new technology may be a microcosm of our economy’s problems.

Published in The Express Tribune, May 18^th, 2023.

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