Pakistan’s AI moment: build, don’t borrow growth

The 2025 Nobel Prize in Economics awarded to Joel Mokyr, Philippe Aghion and Peter Howitt celebrates innovation and creative destruction as the true engines of growth. Pakistan should listen: we protect the old and punish the new. Growth needs risk-takers, not rent-seekers, because innovation is not imported, it is built.

Mokyr’s insight was that sustained growth depends on a virtuous loop between understanding and doing. Artificial Intelligence can turbocharge that loop. By accelerating experimentation, generating hypotheses and even automating scientific discovery, AI is changing not only how we do things but how we know things.

Aghion and Howitt’s theory of creative destruction warns that innovation thrives when competition and incentives are balanced. Too much dominance stifles new entrants, while excessive competition discourages investment in research. Today’s AI landscape is shaped by a few global giants with enormous computing power and data access. The question for the world is whether this will lock innovation into a few hands or spread productivity across many.

For Pakistan, the challenge is clear. We cannot afford to remain passive consumers of AI developed elsewhere. We must build local capacity. Our talent in software, mathematics and data science, supported by a vibrant diaspora, gives us an edge, but this edge needs ecosystems: shared datasets, regulatory sandboxes, public-private partnerships and merit-based funding for startups. We need to create the conditions in which AI can evolve organically.

The upside is not trivial. Pakistan’s National AI Policy projects that, with effective implementation, AI could raise GDP by 7-12% by 2030 and create up to one million new jobs. The government envisions AI integration across agriculture, health, education and public administration to improve service delivery, transparency and productivity. The policy estimates potential gains of Rs4.4 trillion in economic value, particularly from smarter logistics, optimised farming and data-driven exports. Yet these are potential, not guaranteed, outcomes. They depend on whether AI access extends beyond big tech firms to small enterprises, rural entrepreneurs and Pakistan’s vast informal sector.

Disruption is inevitable. In Pakistan, where social protection is weak and informality dominates, the priority must be to protect people, not jobs. That means retraining, re-skilling and providing transition support so that workers can move into new sectors rather than being left behind. Investing in digital and analytical skills is not optional; it is existential.

AI could also transform sectors where Pakistan already struggles with inefficiency. Precision agriculture could raise yields and reduce waste. Predictive health systems could improve diagnosis in public hospitals. Smart logistics could cut export costs. But none of this will matter if small firms and provincial regions remain digitally excluded. Inclusion, not imitation, must be the national strategy.

Our real constraint is not technological but institutional. We lack flexible systems that reward innovation and tolerate failure. Pakistan must develop policies that adapt as technology evolves. Clear data governance, fair intellectual property rules and privacy frameworks that encourage experimentation are essential. Public procurement can stimulate domestic AI development, while regulatory sandboxes can reduce risk for innovators.

Education is the deepest lever. From schools to universities, AI literacy must become foundational. Partnerships between academia, industry and the startup ecosystem can bridge theory and practice.

If mismanaged, AI could widen inequality, entrench monopolies and deepen dependency. If managed well, it could unleash unprecedented growth and productivity. The Nobel laureates remind us that progress is not automatic; it requires institutions that let new ideas breathe. Pakistan’s youth, entrepreneurial spirit and growing digital base offer the raw ingredients. The missing piece is trust in experimentation.

Growth will not come by protecting the old. It will come by empowering the new. The time to prepare is not after disruption arrives but before. Pakistan’s choice is simple: either shape the AI revolution, or be shaped by it.

The writer is Chair, National AI Policy Committee based in Islamabad. For insights and updates, follow on Twitter: @SalmanAneel or reach out via email: aneelsalman@gmail.com