Transformation via knowledge economy

Listen to article

Coined by geographers and theorists in mid 1990s, the term 'knowledge economy' captures the shift from resource-based and industrial economies to those where intellectual capital and technology are paramount. For a country like Pakistan, transitioning to a knowledge economy presents both challenges and opportunities, given its socio-economic landscape and developmental aspirations.

A knowledge economy thrives on innovation, research and technological advancements. In such an economy, competition shifts from mere cost efficiency to factors like quality, design and performance. Advances in telematics, including the internet, satellite communications and fiber optics, enable rapid information dissemination and collaboration, forming the backbone of the global information network.

Pakistan, with its burgeoning youth population and increasing digital connectivity, stands at a critical juncture to embrace this economic model. Initiatives such as the Digital Pakistan Vision highlight the government's recognition of the role technology and innovation can play in shaping the future. The country's growing IT sector, freelancing industry and start-up ecosystem are promising signs of this transition.

Despite its potential, Pakistan faces significant hurdles in fully realising a knowledge-based economic structure. The quality of education remains inconsistent, with limited emphasis on STEM (Science, Technology, Engineering and Mathematics) or STEAM (Science, Technology, Engineering, Arts and Mathematics) fields and research-based learning, and only a small fraction of universities are equipped to promote innovation or contribute to global knowledge production. Moreover, rural regions still lack adequate access to the internet and digital tools, restricting a large segment of the population from participating in a knowledge-driven economy. Additionally, minimal investment in research and development (R&D) compared to global benchmarks hampers technological advancements and innovation. These challenges are further compounded by the absence of coherent policies supporting the development of a knowledge economy, making substantial reforms and investments crucial for progress.

Pakistan has several opportunities to thrive in the knowledge economy by leveraging its unique strengths. Urban centres like Karachi, Lahore and Islamabad can become hubs of innovation and creativity, utilising their dense networks of skilled professionals, academic institutions and technology parks to foster start-ups, freelancing and IT services. With a large and growing youth population, the country can focus on skill development in IT and digital technologies through initiatives such as DigiSkills and E-Rozgaar, which provide training in freelancing and digital skills. Additionally, Pakistan's significant presence in the global gig economy, supported by its pool of English-speaking and tech-savvy professionals, positions it to capitalise on freelancing and remote work opportunities. Furthermore, as an agrarian economy, Pakistan can integrate knowledge-based practices into agriculture, using precision farming, data analytics and IoT solutions to enhance productivity and sustainability, thus further solidifying its place in the global knowledge economy.

To nurture a knowledge economy, Pakistan must undertake comprehensive reforms and strategic initiatives. The education system should be revamped to emphasise critical thinking, STEM disciplines and digital literacy, with the establishment of centres of excellence in technology and innovation to cultivate skilled professionals. Expanding broadband access to rural areas is essential to bridge the digital divide and promote inclusive growth. Public-private partnerships should be encouraged to drive research, development and innovation through collaboration between the government, academia and private sector. Additionally, developing a start-up culture by offering incentives such as tax breaks, seed funding and incubators can stimulate entrepreneurial ventures in technology. Finally, engaging the Pakistani diaspora for technology transfer and knowledge sharing can significantly accelerate the country's transition to a knowledge-based economy.