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Report: National Conference on “Building Knowledge Based Economy in Pakistan: Learning from Best Practices”

Announcements 01/01/2016
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National Conference on “Building Knowledge Based Economy in Pakistan: Learning from Best Practices”
National Conference on “Building Knowledge Based Economy in Pakistan: Learning from Best Practices”

NATIONAL CONFERENCE
“Building Knowledge Based Economy in Pakistan: Learning from Best Practices”
September 9-10, 2015

Organized by: IPRI and Hanns Seidel Foundation (HSF) on September 9-10, 2015 at Serena Hotel Islamabad.
Objective: To evolve recommendations for creating and developing a knowledge-based economy in Pakistan.

Salient Points:
• Knowledge-based economy is an economy in which the production, distribution and use of knowledge is the main driver of growth, wealth and employment. The four pillars of knowledge-based economy are economic incentives and institutional regime, education and training, information infrastructure and innovation system.
• In the current era of globalization, knowledge is the key driver for socio-economic development. The countries which manage their economies, utilize their natural resources and empower their population through training/education are successful economies.
• The absence of a system to exchange knowledge at the micro level, and the communication gap between the different tiers of stakeholders results in fragmentation of researchers and resources. With focused research and development, funding can be carried out in the right direction, and future policies can be implemented correctly.
• To have knowledge based economy, government policies should be to strengthen the knowledge and research base. The educational focus should shift from mere memorizing to critical thinking. Besides, enhancing the manufacturing and exports of high technology products, promoting the private sector and developing links between the private sector and academia would yield dividends.
• Pakistan’s coal, copper and iron ore deposits make the country resource rich. In the recent past, shale oil and gas reserves have also been discovered. Pakistan’s young population is also a source of strength. Through technical know-how and knowledge based economy, Pakistan can transform itself into a progressive nation.
Recommendations
• Globalization and advancement in communication systems have brought about a revolution in the way major economic systems work today. This is all a product of cutting edge research, development of technologies and incorporating them in our daily lives- a Phenomena that is fundamentally linked to knowledge based economies.
• Knowledge based economy and ensuing non-linear economic growth is a concept that a country like Pakistan, with a very high ratio of population under the age of 30, ought to have given more attention to. The purpose of this conference was to highlight this concept that remains neglected in Pakistan.
• Pakistan is undergoing a watershed moment as both economic and security situation are moving towards stability. This is a point where a strategic decision to develop and transform knowledge based systems will provide huge dividends for not just economic growth but the development of society, fighting radicalization and human development.
• Great minds, thought leaders and renowned academics working in the field, made illuminating presentations and generated creative ideas throughout the conference. As the host of this conference, IPRI is to disseminate most relevant ideas and provide conference recommendations to the government of Pakistan and other relevant quarters. It has picked up following ideas that are considered to go a long way in improving the state of Pakistan’s knowledge based infrastructure.
o There is a need to highlight the significance of transforming primary education and raising the literacy rate. Despite knowing the fact that the school education (not university) had a direct bearing on the socio-economic development, over the years, the graph of primary education in Pakistan has plummeted. In addition to this, a paradigm shift needs to be brought out in the way we learn- away from memorization to critical thinking, innovation and creativity. The country has to go back to basics and re-engineer the schooling system. In addition to this, literacy rate needs to be increased and brought to a level where the youth bulge of Pakistan becomes an asset instead of a liability.
o Higher Education has a direct correlation with innovation and GDP growth. Higher education is not just university education-producing more PhDs, scientist’s, doctors and engineers but also technical education to facilitate and plug gaps between highly educated and illiterate or just primary educated sections and provide other connecting colours to complete the spectrum. Thus focus should be not just on developing more universities or schools but also technical colleges. The government should also focus on improving the quality of research being conducted in the existing universities by providing them higher resources and expanding their ambit.
o To use the complete landmass and population of the country as a resource, national policies should be directed towards the rural sections as much as the urban sections. Pakistan is not a homogenous country, and sections of society feel alienated in our national knowledge based economy. The local knowledge needs both in terms of capacity building and industrial needs vary in different parts of the country demanding graduated intervention from the government.
o Even though the number of PhDs in the country has risen from 300 in 1998 to 7000 today, knowledge platform and production platform is not synergized. Thus the kind of research being conducted here and abroad by HEC scholars is not contributing to an agenda driven knowledge economy. There should be a mechanism that helps to synergize the so called triple helix’s interests and strategies. Where the government should outline strategic goals as in the vision 2025, the industry to highlight areas where fresh graduates and researchers could contribute and the universities or research institutes could highlight their needs as well as latest research that could provide value addition to the commodities being produced in the country.
o At the heart of knowledge based economy lies advancement of science and technology leading to improvements and value addition. Pakistan is ranked very low on the Innovation and Competiveness indices, internationally. This translates into low end production of cheap goods and inefficient energy consumption ratio retarding the economic growth. The STPs (Science and Technology Parks) have been used in the world to resourcefully produce and consume knowledge for socio-economic growth. STPs are a potential source of knowledge-based industries, and are increasingly viewed as an essential component of the knowledge economy. STPs cluster together industries and scientific institutions, universities or research facilities. In addition to having a common vision this also helps to facilitate learning, technology transfer, leading to knowledge-based industrial growth. Today the total wealth of the world is US $15 trillion and two-thirds of it come from science and technology parks. Pakistan’s potential even with the current resources and manpower is great and should be tapped into.
o To give a perspective on what Knowledge hubs can and have achieved internationally the examples of MIT, Stanford and Tshingua Universities should be considered. Massachusetts Institute of Technology’s entrepreneurship department has helped create 25,800 new businesses. It is annually generating US $ 2 trillion revenue and offering 3.3 million jobs, similarly, Stanford has created 39,900 new businesses, is annually generating US $ 2.7 trillion revenue and offering 5.4 million jobs. China’s Tsinghua University’s has created 2979 new businesses. It is annually generating US $ 0.4 trillion revenue and offering 125,000 jobs.
o For Pakistan to move from a low value added agriculture economy to a high value added knowledge economy- further investment and resource allocation is crucial. The speakers at this conference unanimously voiced their concerns about limitation of resources. Pakistan should allocate a big portion of its budget on further development of existing universities and research institutions as well as organizations such as PCSIR (Pakistan Council of Scientific and Industrial Research), PARC Pakistan Agricultural Research Council), PAEC (Pakistan Atomic Energy Commission), etc.
o Also new institutions particularly in emerging technologies such as nanotechnology, space technology, genomics and bioinformatics, etc. should be established and high quality professionals should be produced from these institutions by providing state of the art research and development facilities. This will help strengthen the supply side of the knowledge economy endeavors.
o Moreover, creating suitable demand of skills of the professionals in the market by creating effective relationship of research institutions with industry; providing incentives to the private sector to also conduct research and provide financial support for capacity building and helping create laboratories and technology parks in the private sector as well, will complete the circuit and become the foundational step towards smart economy.
o In this regard different international models and practices on the base of bilateral and multilateral partnership between private companies, universities and governments were discussed, e.g. strategic partnership between Proctor and Gamble and Durham University, North Carolina research triangle, initiative led by business sector (Information technology business network), initiative led by provincial government (Alberta’s innovation economy plan), city government led initiative (Jena, East Germany), Okanagan high technology council and enterprise development hub (Middlesex University). These models and practices exemplify ways in which university, industry and government have collaborated to create a dynamic technology based economy.
o The role of think tanks and research institutes in economic development is chronically under appreciated in Pakistan. There are 6500 think tanks in the US, whereas, during the last ten years more than 2000 think tanks were established in China. Pakistan unfortunately stands nowhere in comparison to them in both qualitative and quantitative terms. This is a serious dilemma that needs immediate attention and investment, if Pakistan is to move towards knowledge based economic growth.
o Nevertheless, preservation of precious resources is much needed in Pakistan as repetition instead of diversification of product development is a common phenomenon. One way to curb this is thorough doing patent analysis and codifying and regulating the technologies that local firms are working on. Innovative thinking is not required only for developing the state of the art technologies but also in creating a national vision and delineating priorities for future.
o Agriculture is the backbone of Pakistan’s economy; it provides the largest source of employment and is a major contributor to the GDP of the country, but is chronically neglected and under invested. Obsolete methods of farming are being employed and there is a mismatch between technology generation and farmers’ needs. There is also a downward trend in international donor’s support to the agricultural research. Therefore, the agricultural sector needs to be revolutionized by introducing knowledge based reforms and ICT application in farming. For example, capacity building of all stakeholders through the use of ICT and training in modern farming techniques is required. Through web/mobile based applications, different analytical and other information like domestic, regional, and international prices/stocks could be shared. The cell phone based agricultural extension model has been launched in Khyber Pakhtunkhwa by Telenor Pakistan. The same model could be developed in other parts of the country for timely transmission of information to stakeholders.
o The textile sector constitutes a predominant portion of Pakistan’s exports and it has remained stagnant for the last five years. Pakistan is the fourth largest producer of cotton in the world, yet its total textile export is only about US $13 billion as compared to the Bangladesh’s US $ 28 billion without producing a single bale of cotton. The stagnation is attributed mainly to the energy crisis but there are many other contributing factors to the deterioration of the textile sector. One of the most severe challenge the exporters face, apart from the energy crisis, is US $1.5 billion stuck (in terms of sales tax and custom duty refund) with the Federal Board of Revenue for refunds. If this capital was refunded it would not only be reinvested in textile sector but also contribute in research and development programmes. Unfortunately, no industry would be willing to invest in research and development in such condition.
o Product diversification is required for socio-economic growth. Although agriculture and textile exports are major contributors to GDP in Pakistan, it now needs to begin investing more in the development of value added and medium to high-tech products. Most important at this level is ICT. Investment in the information and communications technology and easy access to the internet has transformed societies internationally. This factor has primarily led to globalization and knowledge based economies. Pakistan should revamp its digital capital policies and allocate more resources to this sector. At the moment Pakistan does not even have a process for codification of components and subcomponents of ICT technologies. The Nation’s digital capital should be enhanced at a comparable level of its physical infrastructure.
o In addition to diversification, the existing economic sectors also need attention from the Knowledge based economy perspective. ICT technologies like access to 4G networks and android phones need to be introduced in agricultural sector. It is also imperative to reinstate the need for non-conventional entrepreneurship in the agricultural sector.
o There is a symbiotic connection between knowledge and energy. Both follow similar trajectory of growth. The depletion of conventional sources of energy and the excessive emissions of carbon dioxide, compel the scientists and policy makers internationally to devise new ways of energy generation. This leads to innovations in technology. The increase in gas prices was the driving factor behind the discovery of shale oil and gas reserves. Shale reserves (worth of 9.1 billion barrels) have also been found in Pakistan. The discovery of shale oil will put Pakistan on international oil map. A balanced energy mix, exploring indigenous resources and enhancing energy conservation mechanism as well as conservation awareness would be useful in countering energy shortage. Pakistan has eight coal based power plants. Modern techniques can make coal more effective and less polluting. As regards the shale reserves and to exploit the shale oil potential, Pakistan needs unprecedented business, security, regulatory and investment reforms and technological capacity.
o International cooperation is fundamental in learning international best practices. Pakistan should strive to enter partnerships with international technology leaders and provide opportunities to young scholars to collaborate with international universities and industry to create new startups. In this regard China-Pakistan Economic Corridor (CPEC) will help achieve Pakistan’s knowledge economy goals. Additionally Pakistan’s image internationally has to be improved so that more international partners are ready to visit and invest in Pakistan. The Forbes article depicting Pakistan as the next economic success story of Asia is a result and also a contributory to this end.
o The American model of using academics and technocrats as policy makers can be adopted or advisory councils for the legislators can be created leading to more informed decision making. There are 11 federal ministries that should coordinate for a free flow of ideas and resources and this process should be followed at lower level of governance. The selection process of our public sector CEOs needs to be changed and be based on merit and matching the skill of the CEOs of similar organizations. Bureaucracy should contribute as a facilitator in promoting knowledge-based economic growth of the state. In this context, civil service structure should also be transformed and the ‘Rules of Business’ document needs to be revamped as most of its provisions are obsolete now.
o Operationalizing the vision documents and policy papers such as vision 2025 can be done only through five year plans that are more concrete and should also incorporate budgetary allocations for specific projects. Additionally, coordination gaps between policy papers of different ministries and finance sectors need to be plugged. For example, three policy papers — talking about enhancing the capacity-building of service sector, Poverty Reduction Strategy Paper prepared by Finance Division of Pakistan and Pakistan: Framework of Economic growth and Vision 2025 prepared by Planning Commission of Pakistan, have conceptual gaps or incoherence. In order to have a common national strategy for human resource development, knowledge economy and services sector, these gaps need to be filled.
o Both China and Japan are great models for Pakistan to learn from best practices followed by these two economies. Pakistan should learn from China which has moved from ‘Made in China to Created in China Model’, and should strive to create products in Pakistan. Similarly, Pakistan should also learn from Japan. In this regard, basic infrastructure development of highest quality and durability is what modern Japan is known for and it is worth learning.

Post-Event Report

NATIONAL CONFERENCE
“Building Knowledge-Based Economy in Pakistan: Learning from Best Practices”
Organized by
Islamabad Policy Research Institute (IPRI)
In collaboration with
Hanns Seidel Foundation (HSF)
at
Serena Hotel, Islamabad
September 9-10, 2015

Introduction
A two-day national conference on “Building Knowledge-Based Economy in Pakistan: Learning from best Practices” was organized by Islamabad Policy Research Institute (IPRI) in collaboration with Hanns Seidel Foundation (HSF) on September 9-10, 2015 at Serena Hotel, Islamabad. The conference comprised of four working sessions in addition to inaugural and concluding sessions. Thirteen presentations were made by eminent scholars that covered various themes ranging from “Building Knowledge-Based Economy in Pakistan: Potential and Prospects” to “imperatives of Building Knowledge-Based Economy in Pakistan”, “Building Knowledge-Based Economy in Pakistan: Modernizing Important Sectors of the Economy” to “Building a Knowledge-Based Economy: A Way Forward.”

Concept Note
Since the middle of the second half of the 20th century the world has witnessed a knowledge revolution where seeking, dissemination and use of knowledge, especially higher and technical education, industrial technology, innovations, Information and Communication Technologies (ICT) have gained prominence that is impacting all spheres of human activity including the socioeconomic development of countries. Knowledge has, therefore, become the key driver of economic growth taking precedence over traditional drivers of growth, such as physical capital and low skill labour. In this context, countries that had taken the lead in using the knowledge for their economic development have progressed rapidly leaving behind others. Thus, this trend of seeking, dissemination and use of knowledge in economic development by some countries gave rise to the concept of a Knowledge Based Economy (KBE), as opposed to Agricultural and Industrial Countries respectively.
Although a number of general definitions of KBE are available, in the descriptions of the World Bank and the Organization for Economic Cooperation and Development (OECD), the US and Canada, the term KBE is defined as an economic structure that has the ability to create, store, share and analyze knowledge through networks and communities making predominant use of ICT. The Economic and Social Research Council (ESCR), UK has defined the KBE as the economy where economic success is increasingly based on the effective utilization of intangible assets, such as knowledge, skills and innovative potential, as the key resource for competitive advantage. Therefore, in the modern age, in knowledge based economies, human skills, innovation and ICT are acknowledged as key drivers of growth and economic development.
Recent developments put Pakistan in a favourable position to build up structures pertaining to knowledge economies. Its economic development should be based on the four pillars of a knowledge economy, which are:
• Economic incentives and an institutional regime to provide incentives;
• An educated and skilled population;
• An efficient innovation and technology adoption system and
• ICT infrastructure.
Presently, the Government of Pakistan has reduced the budgetary deficit from 8 percent of GDP to 5 percent, inflation rate from 10 percent a year to 5 percent and enhanced the foreign exchange reserves from US $ 11 billion to over US $ 17 billion. The IMF has projected real GDP growth of Pakistan to rise from current 4.24 percent to 4.7 percent in 2016. In future, Pakistan’s growth rate is likely to further rise due to the expected rise in investors’ confidence because of Pakistan Army’s recent successes in the war on terror, improving relations with Afghanistan and Chinese investment in China-Pakistan Economic Corridor (CPEC). A recent US Government report prepared by its National Intelligence Council has also included Pakistan in the “Next Eleven Economies,” which will collectively overtake EU-27 in global power by 2030. These favourable economic developments go hand in hand with one of the youngest populations in the world, which commands an increasing degree of education.
In this context, it is a good sign that the successive Governments in Pakistan during the last ten years have realized the significance of making Pakistan’s economy as knowledge based. For instance, in 2005 and 2007, the Government had charted a roadmap of making its economy knowledge based for which Medium Term Development Framework (MTDF), 2005-10, Vision 2030 Approach Paper and IT Policy were prepared and sanctioned. Similarly, the present Government has also geared up and approved the Pakistan Vision 2025 which outlines the vision and strategy to transform Pakistan’s economy as a knowledge based economic system. To implement Pakistan Vision 2025, Pakistan government and relevant public and private sectors and institutions require to devise and carry out a comprehensive and time bound action plan. To succeed in developing Pakistan’s economy as knowledge based, the Ministry of Science and Technology and Higher Education Commission have to play a critically important role. Moreover, in the light of the devolution of subjects to provinces vide 18th amendment 2010, while there is a need to make the economic growth all inclusive, it is also necessary to preserve a sense of ownership throughout the society.
Best practices from other countries should complement Pakistan’s aspirations in becoming a KBE. To achieve the objective of transforming Pakistan’s economy into a knowledge based economy, the Government and private enterprises would certainly appreciate policy inputs from the country’s think tanks. With this aim in mind, the Islamabad Policy Research Institute (IPRI), together with the Hanns Seidel Foundation (HSF), Germany (Pakistan Office) organized a two day national conference on “Building Knowledge –Based Economy in Pakistan: Learning from Best Practices” on 9-10 September 2015 at Serena Hotel, Islamabad. The objectives of the conference was to initiate an informed debate on the subject and suggest plausible recommendations to the Government to facilitate transformation of Pakistan’s economy into a KBE. Renowned economists, technical experts and policy professionals of Pakistan participated in the conference.

Conference Proceedings
The conference was held in six sessions (inaugural session, four working sessions and a concluding session). The salient points of the conference are as under:-

September 9, 2015

Inaugural Session

In his welcome address, Ambassador Sohail Amin, President IPRI, greeted the chief guest, chairs of the sessions, speakers and audience of the conference. He said that the aim of the conference was to highlight the importance of building knowledge based economy in Pakistan by adding new thinking in our strategies to enhance economic growth. He added that Pakistan’s economy was operating on traditional lines and required transformation. In such circumstances, the concept of knowledge-based economy would become relevant to Pakistan. The major input required in building such an economy was the power of mind that could be developed through knowledge. Therefore, one of the pre-requisite for the development of knowledge based economy would be the creation of knowledge based society. He further stated that during the last four decades, seeking knowledge, particularly on technical instructions and industrial technologies, had gained prominence all over the world. The countries taking lead in using knowledge for their economic development had progressed rapidly and their economic development had accelerated, making their production more competitive in the world market.
He recommended that in order to maximize the growth rate, it was necessary to base Pakistan’s economy development on the four pillars of a knowledge economy, i.e. economic incentives and institutional regime to provide incentives, a literate and skilled population, an efficient innovation and technology adoption system and an effective Information and Communications Technology (ICT) infrastructure. He stressed the need to adopt and learn best practices from around the world in developing a knowledge-based economy that required literate and skilled population as well as an efficient innovation and technology adoption system.

Opening Remarks
In his opening remarks, Kristof Duwaerts, Resident Representative, Hanns Seidel Foundation (HSF), Islamabad Office, said that Pakistan was undergoing economic stabilisation, making it ready to implement knowledge-based interventions in its economic and production infrastructure. It was predicted that Pakistan was set to become the 18th most important economy by 2050. It would certainly not do so by relying on agriculture alone. Further he said that one of the most important strategic decisions for any country set to become a knowledge economy was the introduction of technological innovations and improving the education system. There were many infrastructural ground decisions, which needed to be taken, to the provision of physical security through the abolition of terrorism, crime, factors of instability, nepotism and corruption in order to generate the chance for an equitable growth and wealth for knowledge-based economies.

Inaugural Address
In his inaugural address, Ahsan Iqbal, Federal Minister for Planning, Development and Reform, said that knowledge had become the key driver for socio-economic development in the globalized world. Pakistan had increased investment in human resources at the higher education level to record levels, so that youth could play a vital role in development of knowledge-based economy in a highly competitive global environment. Therefore, the present government had laid strong foundation for knowledge economy by focusing on education sector in its Vision-2025.
He also stated that human resource development was at the top of the government’s priorities, and that education was being targeted through increased funding for higher education. He further stated that the issue at the heart of building a knowledge-based economy was to find ways to create an environment which enabled knowledge to become a productive force in creating tangible and intangible products and services. Moreover, he said that the old paradigm of education like memorization had lost the relevance and now the education system based on critical thinking, creativity, innovation and problem-solving approach was need of the hour. In this regard, country that had strong knowledge base and innovation would progress and those with weak base were bound to perish.
He further stated that knowledge was important in human civilization right from the beginning and world had entered into knowledge era in the 21st Century after passing through agricultural era and industrial age. The present knowledge era warranted new thinking and tools to match with the pace of fast developing world and Pakistan needed to follow the footsteps of developed nations by promoting culture of critical thinking and innovation.
He concluded that talent from lower strata would be encouraged as it produced movers and shakers for the economy through innovation. Moreover, investment in research and development at university level would yield increased productivity and produce skilled human resource in agriculture and manufacturing sector. The entire education system needed to be reformed in order to create synergy and alignment between the country’s knowledge and production platforms.

Session-I
Building Knowledge-Based Economy in Pakistan: Potential and Prospects

Dr Usman Mustafa, Head Department of Economics and Chief, Training and Project Evaluation Division, Pakistan Institute of Development Economics (PIDE), Quaid-i-Azam University Campus, Islamabad, spoke on “An Overview of Pakistan’s Economy: Current Use of Four Pillars of a Knowledge Economy & its Further Promotion.” He described a knowledge-based economy as an economy in which the production, distribution and use of knowledge was the main driver of growth, wealth creation and employment across all industries. It was one, where knowledge was acquired, created, disseminated and applied to enhance economic development. Highlighting the example of knowledge as a main driver of growth, he stated that forty years ago, Ghana and the Republic of Korea had virtually the same income per capita. By the early 1990s, Korea’s income per capita was six times higher than Ghana’s. Some reckon that half of the difference was due to Korea’s greater success in acquiring and using knowledge. Explaining the era of Knowledge-based development and growth, he stated that the economy revolved around agriculture in its first phase, however, after the industrial revolution wealth became associated with manufacturing and commerce. He further stated that in the current era, wealth was linked with the ‘ownership of knowledge’ needed to produce goods and services.
Discussing the four pillars of knowledge-based economy, he said that the first pillar was economic incentive and institutional regime, which required a regulatory and economic environment that enabled the free flow of Knowledge, supporting investment in ICT and encouraging entrepreneurship, which was central to the knowledge economy. Secondly, it was education and training in which educated and skilled population were needed to create environment for employing knowledge. In this regard, research centres, universities, think tanks, consultants, etc. applied and adapted global knowledge to local needs for creating new technology. Thirdly, it was information infrastructure that covered dynamic information infrastructure ranging from radio to the internet, which was required to facilitate the effective communication, dissemination and processing of information to reduce transactions costs and to increase communication, productivity and output. Fourthly, it was an innovation system, which was a network of research centres, universities, think tanks, private enterprises and community groups that were necessary to tap into the growing stock of global knowledge, assimilated it and adapted it to local needs for creating new knowledge. He concluded that knowledge was not a power until it was applied. It played the predominant part in the creation of wealth. Therefore, there was a need to strengthen all pillars of knowledge-based economy in order to be a part of the Asian century.

Dr. Asad Zaman, Vice Chancellor, Pakistan Institute of Development Economics (PIDE), Quaid-e-Azam University Campus, Islamabad, spoke on “Significance of Using Knowledge in the Economy of Development: Current State and Future Strategy of Knowledge Management and Dissemination.” He said that knowledge was a power but to acquire knowledge did not mean to get the power. There was a contention that knowledge had always been a driver of growth. However, there were many different types of knowledge in the marketplace of ideas. But the most important element was to select the real and valuable knowledge. Currently, a Gresham’s law operated and cheap imitations of knowledge had driven out the genuine article from the market.
Highlighting the evolutionary process of knowledge, he stated that the most dramatic episode in the development of knowledge was the emergence of Islam, resultantly Muslims created their own civilization, which dominated the world about thousands of years. In this context, the importance of knowledge in Islam could be judged from the Hadith that “the ink of the scholar is more precious than the blood of the martyr.” Moreover, according to the secular historian, the characteristics of the earlier Islamic history showed that people were motivated by the trust in knowledge. While tracing the source of today’s backwardness of Muslims, he identified that lack of interest in acquiring the knowledge was the major reason of their problems. Highlighting the rise of Western society, he quoted the Rostow’s stages of economic growth model, which indicated the Western economic progress from scratch to the world leadership.
He further stated that it was a worldwide phenomenon that students were more interested in getting the degrees and pass the exam instead of acquiring the knowledge. Therefore, the idea for getting knowledge was about transformation, which had been lost. Discussing about the types of knowledge he said that there were different types, i.e. knowledge of how to be a human being, knowledge of how to produce objects, knowledge of the world around us and knowledge of the capabilities of the body, soul, heart, etc. The most important type of knowledge was given by Islam, which was the knowledge of how to be a human being but unfortunately this type of knowledge had been vanished in education system except to learn how to make the atom bomb and earn profit. In fact, the current courses about morality, which were even taught at Harvard University, did not also teach how to become a better person.
He concluded that currently there were two models of business management. The first one was a Western model based on to sell services in order to earn profit. The second model was an Islamic model in which to earn profit in order to provide services and this model led to success, whereas, the pursuit of profit led to failure and distrust all over the world.

Mr. Azhar Majeed Shaikh, Former Vice President/Executive Committee Member Federation of Pakistan Chamber of Commerce and Industry (FPCCI), and Director, Arzoo Textile Mills Limited, gave a talk on “Modernizing Industry and Trade Regime: Using Modern Technologies, Innovations and ICT through Public Private Partnership.” He discussed the challenges faced by textile sector and due to those it had remained stagnant for the last five years. One of the most severe challenges the textile sector and exporters faced, apart from the energy crisis, was US $1.5 billion stuck (in terms of sales tax and custom duty refund) with the Federal Board of Revenue for refunds. If this capital was refunded to them, that would not only be reinvested in textile sector but also contribute in research and development programmes. But unfortunately, no industry would be willing to invest in research and development in such conditions.
He identified that the state of textile industry in the country was heading towards deterioration, which was needed to be addressed on immediate basis. Moreover, Pakistan being the fourth largest producer of cotton in the world, its total textile export was only about US $13 billion as compared to the Bangladesh’s US $28 billion total textile export without producing a bale of cotton. Comparing the regional textile and clothing growth with Pakistan, he highlighted that Pakistan’s growth was about 22 percent, whereas, India, China and Bangladesh were 94 percent, 97 percent and 160 percent respectively. He further stated that now the textile business had become a competitive one. It was a business, which could earn more than 7 percent profit but if the textile industry would be closed to more than 270 days due to non-availability of energy (gas and electricity) in these circumstances this industry could not survive in the country.
He concluded that if Pakistan merely achieved the value addition level of China in textile export, then the country would touch upon the figure of US $ 52 billion of textile exports. In this regard, the country would not need IMF or any foreign aid, but this required sincerity and political will to address the textile sector’s grievances.

Dr. Tariq Bashir, Head of the Science Section, Pakistan Council for Science and Technology (PCST) spoke on “Considering Local Dimensions in Building Knowledge-Based Economy in Pakistan.” He said that wealth was derived increasingly from ideas and those countries would prosper, which attracted the creative class. At the global level, the competitive knowledge-based economies, governments, knowledge creating institutions (universities/research and development organizations) and industry worked together to create regional knowledge hubs. In fact, knowledge hub was a region with a communally knowledge-intensive organizations located in both public and private sectors. The knowledge hubs had three major functions, i.e. a) to generate knowledge, b) to transfer knowledge at the place of application and c) to transmit knowledge to others in the community through education and training. In this regard, universities and research and development organizations had a central role to play in all three functions of a knowledge hub. Moreover, these functions contributed directly and indirectly in the regional knowledge development such as setting-up firms, technology transfer, technical assistance, developing regional innovation capabilities, analysis of regional economy and development of innovation norms of openness, trust and cooperation.
Explaining the four factors that influenced the role of knowledge in creating the institutions, he stated that the first factor was an institutional factor, which provided an orientation of the institution’s management to the regional engagement. It had the ability to perform the role of a contributor. Second was the regional factor, which included industrial base of a region and cultural characteristics. Third was the common factor, which included history of academia-industry linkages in the region. Fourth was the environmental factor, which included changes in the economic and political environments and government policy.
He discussed seven different international models and practices on the basis of bilateral and multilateral partnership between and amongst the private companies, universities and governments to enhance the regional knowledge hub such as strategic partnership between Proctor and Gamble and Durham University, North Carolina research triangle, initiative led by business sector (Information technology business network), initiative led by provincial government (Alberta’s innovation economy plan), city government led initiative (Jena, East Germany), Okanagan high technology council and enterprise development hub (Middlesex University). These models and practices exemplified one way in which university, industry and government had collaborated to create a dynamic technology based economy.
Quoting the on-going practices in Pakistan, he said that there was no large-scale research and development institutions existing, whereas, there was merely limited bilateral and multilateral partnership between and amongst the private companies, universities and governments to enhance the knowledge hub. However, without much technical education and government and private companies support, the goal for achieving national knowledge-based economy of Pakistan could not be materialised. Tariq blamed both the government and stakeholders for not investing in knowledge generation. He concluded that knowledge gaps and needs of different regions should be identified. Moreover, regional knowledge hubs should be properly utilized for innovation-based knowledge development and meeting needs of the local communities. While deciding about knowledge parks and technology parks, etc. the regional knowledge strengths should be given due weightage.

Session II
Imperatives of Building-Knowledge Based Economy in Pakistan

Mr. Amer Hashmi, Advisor NUST, President/Senior Fellow — NUST Global Think Tank Network, Secretary General — NUST Corporate Advisory Council and Chairman Executive Committee — NUST National Science and Technology Park made a presentation on “Enhancing the Role of Higher Education, Science and Technology and Innovation.” He said that the contribution of Pakistan’s universities and think tanks in the knowledge-based economy was inadequate because of limited resources, bad governance and lack of political will. Pakistan was facing the problem of brain drain and it was not able to retain the intellectual capital within the country because of its failure to create an enabling environment, which allowed the intellect to flourish. Therefore, the richest source of Pakistan’s knowledge-based economy was residing in USA.
Explaining the role of higher education in socio-economic development, he quoted the example of National University of Sciences and Technology (NUST), which was contributing in teaching and human resource development, research, socio-economic development and policy-making and implementation like the Harvard University. In addition, he also mentioned that the Massachusetts Institute of Technology’s entrepreneurship was involved in 25,800 businesses. It was annually generating US $ 2 trillion revenue and offering 3.3 million jobs, whereas, Stanford University’s entrepreneurship was involved in 39,900 businesses. It was annually generating US $2.7 trillion revenue and offering 5.4 million-jobs. While China’s Tsinghua University’s entrepreneurship was involved in 2979 businesses, it was also annually generating US $ 0.4 trillion revenue and offering 125,000 jobs. Twenty-five years ago, China’s peaceful rise had learnt that knowledge was the back bone for the socio-economic development of the country but unfortunately Pakistan could not realize the importance of knowledge.
Acknowledging the role of think tanks in developing the knowledge-based economy, he stated that there were 6500 think tanks in the US, whereas, during the last ten years China established more than 2000 think tanks. In the case of Pakistan, there were less than half dozen think tanks like IPRI, which were focusing on knowledge-based economy. He further stated that ‘triple helix’ culture was evolving in Pakistan and some universities such as NUST started bilateral collaboration research and studentship programmes with industries. In this regard, Chief Executive Officers of various industries visited NUST. But still one of the main hurdles in the way of joint research and studentship programme was the trust-deficit between the industry and academia.
Highlighting the importance of science and technology parks in economic development he said that today the total wealth of the world was US $15 trillion and two-third of it came from science and technology parks. In this context, the US was advanced in science and technology parks. It had more than thousand centres and China had about five thousand centres, whereas, NUST was the first university, which signed a Memorandum of Understanding (MoU) with Chinese company Tus-Holdings for the establishment of a National Science and Technology Park (NSTP) at NUST. Its aim was to capitalize on research and development collaboration between academia and industry, in order to create a knowledge-based economy using NSTP as the vehicle, with the ultimate aim of national socio-economic uplift.
He added that NUST had been short-listed for International Association of Science Parks (IASP) World Conference 2017. It would bid against Turkish Technology Parks Consortium. The NUST might be able to win the bid. If that event happened, this meant that more than seven hundred Chief Executive Officers of different multilateral companies and ten heads of the states would visit Pakistan to attend the event. The event would be a game changer for the country and also help in building the knowledge-based economy.

Dr. Ather Maqsood Ahmed, Head Department of Economics, School of Social Sciences and Humanities, National University of Sciences and Technologies (NUST), in his presentation on “Boosting Growth Rate and Export Earnings: Application of Information, Computer, and Communication Technologies (ICT)” described that the growth history of Pakistan remained a roller coaster since independence. He identified that fluctuations in growth and declining trend of growth rate were major stumbling blocks in the economic development of the country. In the backdrop of current standard of education, practices and patriarchal pattern of society, transition from traditional to a knowledge-based economy appeared difficult when standard of living was declining so rapidly. Government policies had small effect on long-term growth rates, because it did not pay much attention to enhance the standard of living of the population. He further added that the basic ingredients of modern growth theory were: accumulation of physical capital with the understanding that there were diminishing returns, accumulation of human capital, interplay between per capita income and growth rate of population, technological progress stemming from increased specialization of labour, discoveries of new goods and methods of production (productivity enhancing factors), and the role of monopoly power as an incentive for technological advances.
Besides, investment in education, health and nutrition and related social infrastructure, productivity growth through investment in research and development, innovations and entrepreneurship had taken central position in the growth equation, which could not be ignored in the process of economic development. In this regard, the ICT was the backbone of research and development and innovations. Discussing the Pakistan’s trade profile he stated that it was not promising. There was limited product and market diversification. This pattern had not changed because country had relied too heavily on traditional products, might be ICT was missing in this equation. Besides, there was less than one per cent share of Pakistan’s ICT in international trade
He further stated that transition from traditional to knowledge-based economy was not possible unless there was investment in growth-promoting factors such as investment in human capital, etc. In contemporary times, research and development and innovations relied heavily on ICT. He concluded that there was a need to build a strong knowledge economy for which Pakistan needed to rid itself of constraints of a natural resource driven approach to socio-economic development and focus on strengthening the ‘triple helix’ (university-industry-government relationships) of the knowledge economy. Government Policies should focus on strengthening the knowledge and research base, enhancing manufacturing and exports of high technology products, establishing the world class universities and centres of excellence in key fields, and promoting the private sector and developing strong links between private sector and academia.

Dr. Vaqar Ahmed, Deputy Executive Director, Sustainable Development Policy Institute (SDPI), Islamabad spoke on “Capacity Building of Human Resource and Services Sector: Improving Education and Technical Skills, using Innovations and ICT.” He said that the role of state would continue as paramount driver of capacity-building, particularly in services sector due to the size of services sector’s economy, which was contributing about seventy per cent to the GDP in Pakistan. Unfortunately, the services sector did not have its national policy. Therefore, he stressed upon the government that it should prepare a national policy for services sector. In this context, he recommended the three policy papers — having the ideas for enhancing the capacity-building of services sector, Poverty Reduction Strategy Paper prepared by Finance Division of Pakistan, Pakistan: Framework of Economic growth and Vision 2025 prepared by Planning Commission of Pakistan, which should be taken into account by the government while preparing a national policy for the services sector.
He further stated that one of the challenges, which Pakistan could not address successfully, not only in the public sector but also in the private sector (research sector), was the brain drain. Resultantly, a lot of manpower and brain power had been hired by the regional demands in the services sector due to attractive salaries and other social factors (health services, nutrition, food security and education), which the country could not match.
Explaining the state of Human Resource Development (HRD) index in Pakistan, he said that the improvements were being made on the vocational training side but the investment in the HRD was lowest as compared to the world. Currently, the country spent only 0.56 per cent of its GDP on vocational training of the educational budget as compared to the 16 per cent of the GDP by the world. Discussing about the food insecurity, he said that around 51 per cent of the country’s population was food insecure. He recommended that the government should work on the “Zero Hunger Programme” of Dr. Abid Qaiyum Suleri, which had already been approved by the Ministry of Food Security and Research, but no budget yet, was allocated to this programme.
He further argued that investment in universities was imperative to economic growth, yet much emphasis be laid on investment at primary or kindergarten level because inventors were born at junior level and not in the universities.

September 10, 2015

Session-III
Building Knowledge Based Economy in Pakistan: Modernizing Important
Sectors of the Economy

Dr. Umer Farooq, Member Social Sciences Division Pakistan Agricultural Research Council, Islamabad presented his views on “Revolutionizing Pakistan’s Agriculture by Increased Use of Knowledge, Science and Technology and ICT”. The talk gave an overview of agricultural sector of Pakistan, its significance for Pakistan’s economy and the need to revolutionize the agricultural sector. It was stated that agriculture was the backbone of Pakistan’s economy; it provided the largest source of employment and was a major contributor in the GDP of the country. Further, it was underscored that despite being an agro based economy, Pakistan’s agricultural sector had failed to grow in comparison to other regional states. Water supply and crop management were the major problems being faced by the farmers. It was pointed out that Pakistan’s spending on agriculture was 0.18 percent, which was least in the SAARC region. Indian spending was around 0.4 percent. Besides, in Pakistan obsolete methods of farming were being employed and there was a mismatch between technology generation and farmers’ needs. Due to the prevailing poor farming techniques, Pakistan was fast loosing competitiveness in production and exports. There was also a downward trend in international donor’s support to the agricultural research.
Therefore, there was a need to revolutionize the agricultural sector, and introduce knowledge based reforms, science, technology and ICT in farming. Firstly, there was a need to increase investment in agricultural research and development. Government as well as the private sector should be forthcoming in this regard. Capacity building of all stakeholders through use of ICT and training in modern farming techniques was required. Computer education was a must for all stakeholders, in particular for farmers of rural areas. Through web/mobile based applications, different analytics and other information like domestic, regional, and international prices/stocks could be shared. It was informed that cell phone based agricultural extension model had been launched in Khyber Pakhtunkhwa by Telenor Pakistan. The same model could be developed in other parts of the country for timely transmission of information to stakeholders.
Dr. Sohail Naqvi, Vice Chancellor, Lahore University of Management Sciences (LUMS), Lahore gave a talk on “Transforming Pakistan’s Economy as Knowledge Based: Existing State and Promotion of Role of Research and Development (R & D) in Science and Technology and ICT”. The talk viewed the low literacy rate in Pakistan as a major drawback in country’s progress. As compared to other regional countries, Pakistan had the lowest literacy rate. The Central Asian Republic, Tajikistan had 100 percent literary rate and the HDI was 30 percent more than Pakistan. Meanwhile, the countries like Vietnam, Philippines and South Korea also had high literacy rates and were progressing smoothly. It was further opined that despite knowing the fact that the school education (not university) had a direct bearing on the socio-economic development, in Pakistan over the years, the graph of education had deteriorated. There was a need to focus towards the tertiary education.
Another aspect highlighted in improving the standard/statistics of education was the type of subjects/courses being taught in various universities/colleges of Pakistan. It was reiterated that in a developing country like Pakistan, joblessness was on the rise. Building universities of applied sciences was not a solution, rather re-defining the roles of colleges was the need of the hour. There was a need to develop vocational training institutes. The societal mindset wherein, everyone wants to be a doctor or engineer also needs to be changed and people should be encouraged to study other subjects as well.

Dr. Gulfaraz Ahmed, Former Federal Secretary, Ministry of Petroleum and Natural Resources, Islamabad gave a presentation on “Reforming Energy Sector: Exploring Fresh Sources of Energy Production Using Modern Technologies”. The presentation described the symbiotic connection between knowledge and energy. Both follow similar trajectory of growth. It was stated that the depletion of conventional sources of energy and the excessive emissions of carbon dioxide, compelled the scientists and policy makers to devise new ways. This led to innovations in technology. The increase in gas prices was a driving factor behind the discovery of shale oil and gas reserves. The US, Russia, China, Argentina, Libya, Venezuela, Mexico, Canada and Indonesia have discovered shale reserves. But, due to lack of geological information and a challenging price environment, it is difficult for the countries to utilize these resources. Shale reserves (worth of 9.1 billion barrels) have also been found in Pakistan. The discovery of shale oil put Pakistan on prospective international oil map.
As regards the energy demands of Pakistan, it was reiterated that the remedy of energy crisis would require a national vision and mission to undertake reforms in power and energy sectors. A balanced energy mix, exploring indigenous resources and enhancing energy conservation mechanism as well as conservation awareness would be useful in countering energy shortage. Pakistan has eight coal based power plants. Modern techniques can make coal more effective and less polluting. There was a plan in the ensuing years to upgrade these plants. As regards, the shale reserves, it was underscored that to exploit the shale oil potential, Pakistan needed unprecedented business, security, regulatory and investment reforms. Meanwhile, the regional options to meet energy needs should be explored. The government efforts to import Liquefied Natural Gas (LNG), the energy pipelines (TAPI-Turkmenistan-Afghanistan-Pakistan-India and Iran-Pakistan Pipeline), Central Asia South Asia (CASA) hydel electricity project and the China Pakistan Economic Corridor (CPEC) were steps in this direction. In addition, expansion of wind energy generation, expanding of nuclear power and building of medium/small size dams/hydel projects were also being undertaken.

Session – IV
Building a Knowledge Based Economy: A Way Forward

Mr. Umer Shehraz, Senior Policy Analyst at COMSTECH Secretariat, Organization of Islamic Conference, Islamabad talked about “Use of Foresight in Formulating and Implementing a National Policy”. The importance of foresight in formulating policies at the national level was highlighted. The best foresight was described as a collection of different methods. It was opined that multiple perspectives would give a bigger picture, and would thus contribute towards making of successful policies. Political patronage and participation of public/society were pivotal in policy making.
The talk further deliberated upon the use of foresight in policy making in Pakistan. It was reiterated that Pakistan’s slow progress in various fields was due to a lack of a foresight. The absence of a system to exchange knowledge at the micro level, and the communication gap between the different tiers of stakeholders results in fragmentation of researchers and resources. For instance, computers were required for developing ICT technology, but to ensure smooth functioning, all the stakeholders must be equipped with the computer technology.
The talk concluded that a foresight, in which views of all the stakeholders were catered, followed by a coordinating mechanism was required. The wider involvement of society would bring political support together. This in turn, would strengthen awareness, and mobilize academia and public bodies. Thus, with focused research and development, funding could be carried out in the right direction, and future policies could be implemented.

Mr. Zhao Lijian, Political Counselor of Chinese Embassy, Islamabad delivered a talk on “Learning from Best Practices: Economy of China”. The speaker while referring to China’s growth potential (GDP US $ 10 trillion), remarked that China’s growth was a driving force for the world economy. He further argued that the bashing of China stock market by the international media was not in line with the ground realities. According to the IMF statistics, China’s contribution to global GDP was around 28.2 percent. China’s major trading partners included Japan, Hong Kong, EU, the US, ASEAN, and the total import and export stood at US $ 4.3 trillion.
China’s endevaour to move away from ‘made in China’ to ‘created in China’ was in line with the emerging trends. He highlighted China’s One Belt and One Road initiative and said that the economic diplomacy was aimed at creating strategic channels, trade and industrial hubs, and regional integration. He said: “the ‘Silk Road Economic Belt’, the ‘Maritime Silk Route’ (often termed as the One Belt One Road – OBOR) and the ‘Vision for 21st Century Eurasian Connectivity’ will connect markets of Asia, Europe and beyond”. The energy cooperation would accelerate the pace of economic development, and thus, would contribute towards regional connectivity.
The China-Pakistan Economic Corridor (CPEC) was also discussed. The project would connect Chinese province Xinjiang with the Pakistani port Gwadar, and would accelerate several economic zones and links between various regions of the world.
The talk also discussed the pro-active fiscal policy adopted by China at the domestic level. It was pointed out that China had now shifted from foreign trade led economic growth to domestic driven economy. The prime factor behind this move was the backward provinces of China. It was underscored that despite the sustainable growth potential, the Western China had a poor population of around 200 million (references – World Bank statistics). China was making headways to bring these backward provinces at par with the developed cities of Shanghai and Beijing.

Mr. Takashi Harada, Economic Counselor, Head of the Economic and Development Section, Embassy of Japan, Islamabad shared his views on “Learning from Best Practices: Economy of Japan”. He said: “the present day Japan is robust with a flourishing economy”. However, seen in the historical context, Japan was completely devastated after the World War II. The country had to start from the scratch. Since then, Japan had made tremendous progress. The infrastructural development, network of roads spread throughout the country and the progress in the field of science and technology reflected Japan’s booming growth. To reach this level, Japan had employed the knowledge based practices in its policy making. For example, in Japan public and private sectors work in coherence with each other. Public sector is responsible for delivery while the private sector ensures its effective implementation. The smooth functioning between the various institutions/stakeholders had transformed Japan’s construction sector into a potent industry. Japanese expertise in construction was known world over. Japan in collaboration with the Asian Development Bank (ADB), has been chalking out a plan to provide Asia with innovative infrastructure financing at a scale of US $ 110 billion per year.

Concluding Session

Concluding Address by Chief Guest Dr. Miftah Ismail, Minister of State/Special Assistant to the Prime Minister/Chairman of Board of Investment, Pakistan. Dr. Miftah while referring to the developed and developing economies of the world opined that some international actors possess natural resources and young population but some without these socio-economic credentials have managed to grow. For instance, Japan is an economic heavy weight, with aging population. Seen in the context of South Asia, the region has young population as well as resources, but the major countries of the region – Pakistan and India have developing economies. Therefore, natural resources as well as human resource were useful in strengthening a country’s economic muscle, but these factors alone cannot make a country progress. The bottom line is that the countries which have managed their economies, utilized their natural resources and empowered their population through training/education are successful economies.
Commenting over Pakistan’s economic well-being, Dr. Miftah referred to Pakistan’s vast natural resources. He said the presence of coal, copper and iron ore deposits make the country resource rich. In the recent past, shale oil and gas reserves have also been discovered. Above all these factors, Pakistan’s young population is also a source of strength. However, despite these positive indicators, it is unfortunate that the country continues to grow at a GDP of 4 percent. He said that to make progress, Pakistan needed technical expertise and knowledge based economy. The youthful population of Pakistan was an asset and the country’s focus should be to educate the youth and provide them with job incentives. He further added that another grave concern of government is to increase the supply of energy. He mentioned that diplomatic manoeuvers were being undertaken to materialize the regional energy pipeline.

Concluding Remarks by Mr. Kristof Duwaerts, Resident Representative, Hanns Seidel Foundation (HSF), Pakistan Office, Islamabad. Mr. Duwaert said that the subject of knowledge based economy was essential for the uplift of a country. He said that Pakistan through the proper management of resources and by learning from the best practices of growing economies like Japan and China could improve its economic conditions. However, for that matter, Pakistan would have to focus on knowledge based economy. To impart knowledge based economy, efforts should be undertaken at the school level. The educational focus should shift from mere memorizing to critical thinking. This innovative approach needed support at the societal level. Social scientists through these learning practices could also mould the public opinion.
Mr. Duwaert thanked the speakers and hoped that the deliberations of the conference would create awareness on the subject of knowledge based economy, and would also serve as a guide for policy makers.

Vote of Thanks by Ambassador Sohail Amin, President Islamabad Policy Research Institute (IPRI). President IPRI appreciated the scholars who presented their papers and the audience who participated in lively discussion sessions that resulted into better understanding of knowledge based economy. He said that the subject of knowledge based economy was not a new idea, but in the recent past, the subject had gained importance worldwide. Every country wants to empower its economic standing through knowledge based practices. As reflected in the inaugural address Mr. Ahsan Iqbal, Federal Minister for Planning, Development and Reform, the government was making efforts to impart knowledge based practices. The views expressed by the high profile speakers, University Vice Chancellors and Chairman HEC also supported the idea of knowledge based economy. The representatives of China and Japan, the leading economies of the world, shared their countries’ experience of employing the knowledge based practices. He hoped that the conference recommendations would be useful for our policy makers. He also informed that the proceedings of the conference will be compiled and published in the form of a book by IPRI and HSF.

Recommendations
• Globalization and advancement in communication systems have brought about a revolution in the way major economic systems work today. This is all a product of cutting edge research, development of technologies and incorporating them in our daily lives- a Phenomena that is fundamentally linked to knowledge based economies.
• Knowledge based economy and ensuing non-linear economic growth is a concept that a country like Pakistan, with a very high ratio of population under the age of 30, ought to have given more attention to. The purpose of this conference was to highlight this concept that remains neglected in Pakistan.
• Pakistan is undergoing a watershed moment as both economic and security situation are moving towards stability. This is a point where a strategic decision to develop and transform knowledge based systems will provide huge dividends for not just economic growth but the development of society and human development.
• Great minds, thought leaders and renowned academics working in the field, made illuminating presentations and generated creative ideas throughout the conference. As the host of this conference, IPRI is to disseminate most relevant ideas and provide conference recommendations to the government of Pakistan and other relevant quarters. It has picked up following ideas that are considered to go a long way in improving the state of Pakistan’s knowledge based infrastructure.
o There is a need to highlight the significance of transforming primary education and raising the literacy rate. Despite knowing the fact that the school education (not university) had a direct bearing on the socio-economic development, over the years, the graph of primary education in Pakistan has plummeted. In addition to this, a paradigm shift needs to be brought out in the way we learn- away from memorization to critical thinking, innovation and creativity. The country has to go back to basics and re-engineer the schooling system. In addition to this, literacy rate needs to be increased and brought to a level where the youth bulge of Pakistan becomes an asset instead of a liability.
o Higher Education has a direct correlation with innovation and GDP growth. Higher education is not just university education-producing more PhDs, scientist’s, doctors and engineers but also technical education to facilitate and plug gaps between highly educated and illiterate or just primary educated sections and provide other connecting colours to complete the spectrum. Thus focus should be not just on developing more universities or schools but also technical colleges. The government should also focus on improving the quality of research being conducted in the existing universities by providing them higher resources and expanding their ambit.
o To use the complete landmass and population of the country as a resource, national policies should be directed towards the rural sections as much as the urban sections. Pakistan is not a homogenous country, and sections of society feel alienated in our national knowledge based economy. The local knowledge needs both in terms of capacity building and industrial needs vary in different parts of the country demanding graduated intervention from the government.
o Even though the number of PhDs in the country has risen from 300 in 1998 to 7000 today, knowledge platform and production platform is not synergized. Thus the kind of research being conducted here and abroad by HEC scholars is not contributing to an agenda driven knowledge economy. There should be a mechanism that helps to synergize the so called triple helix’s interests and strategies. Where the government should outline strategic goals as in the vision 2025, the industry to highlight areas where fresh graduates and researchers could contribute and the universities or research institutes could highlight their needs as well as latest research that could provide value addition to the commodities being produced in the country.
o At the heart of knowledge based economy lies advancement of science and technology leading to improvements and value addition. Pakistan is ranked very low on the Innovation and Competiveness indices, internationally. This translates into low end production of cheap goods and inefficient energy consumption ratio retarding the economic growth. The STPs (Science and Technology Parks) have been used in the world to resourcefully produce and consume knowledge for socio-economic growth. STPs are a potential source of knowledge-based industries, and are increasingly viewed as an essential component of the knowledge economy. STPs cluster together industries and scientific institutions, universities or research facilities. In addition to having a common vision this also helps to facilitate learning, technology transfer, leading to knowledge-based industrial growth. Today the total wealth of the world is US $15 trillion and two-thirds of it come from science and technology parks. Pakistan’s potential even with the current resources and manpower is great and should be tapped into.
o To give a perspective on what Knowledge hubs can and have achieved internationally the examples of MIT, Stanford and Tshingua Universities should be considered. Massachusetts Institute of Technology’s entrepreneurship department has helped create 25,800 new businesses. It is annually generating US $ 2 trillion revenue and offering 3.3 million jobs, similarly, Stanford has created 39,900 new businesses, is annually generating US $ 2.7 trillion revenue and offering 5.4 million jobs. China’s Tsinghua University’s has created 2979 new businesses. It is annually generating US $ 0.4 trillion revenue and offering 125,000 jobs.
o For Pakistan to move from a low value added agriculture economy to a high value added knowledge economy- further investment and resource allocation is crucial. The speakers at this conference unanimously voiced their concerns about limitation of resources. Pakistan should allocate a big portion of its budget on further development of existing universities and research institutions as well as organizations such as PCSIR (Pakistan Council of Scientific and Industrial Research), PARC (Pakistan Agricultural Research Council), PAEC (Pakistan Atomic Energy Commission), etc.
o Also new institutions particularly in emerging technologies such as nanotechnology, space technology, genomics and bioinformatics, etc. should be established and high quality professionals should be produced from these institutions by providing state of the art research and development facilities. This will help strengthen the supply side of the knowledge economy endeavors.
o Moreover, creating suitable demand of skills of the professionals in the market by creating effective relationship of research institutions with industry; providing incentives to the private sector to also conduct research and provide financial support for capacity building and helping create laboratories and technology parks in the private sector as well, will complete the circuit and become the foundational step towards smart economy.
o In this regard different international models and practices on the base of bilateral and multilateral partnership between private companies, universities and governments were discussed, e.g. strategic partnership between Proctor and Gamble and Durham University, North Carolina research triangle, initiative led by business sector (Information technology business network), initiative led by provincial government (Alberta’s innovation economy plan), city government led initiative (Jena, East Germany), Okanagan high technology council and enterprise development hub (Middlesex University). These models and practices exemplify ways in which university, industry and government have collaborated to create a dynamic technology based economy.
o The role of think tanks and research institutes in economic development is chronically under appreciated in Pakistan. There are 6500 think tanks in the US, whereas, during the last ten years more than 2000 think tanks were established in China. Pakistan unfortunately stands nowhere in comparison to them in both qualitative and quantitative terms. This is a serious dilemma that needs immediate attention and investment, if Pakistan is to move towards knowledge based economic growth.
o Nevertheless, preservation of precious resources is much needed in Pakistan as repetition instead of diversification of product development is a common phenomenon. One way to curb this is thorough doing patent analysis and codifying and regulating the technologies that local firms are working on. Innovative thinking is not required only for developing the state of the art technologies but also in creating a national vision and delineating priorities for future.
o Agriculture is the backbone of Pakistan’s economy; it provides the largest source of employment and is a major contributor to the GDP of the country, but is chronically neglected and under invested. Obsolete methods of farming are being employed and there is a mismatch between technology generation and farmers’ needs. There is also a downward trend in international donor’s support to the agricultural research. Therefore, the agricultural sector needs to be revolutionized by introducing knowledge based reforms and ICT application in farming. For example, capacity building of all stakeholders through the use of ICT and training in modern farming techniques is required. Through web/mobile based applications, different analytical and other information like domestic, regional, and international prices/stocks could be shared. The cell phone based agricultural extension model has been launched in Khyber Pakhtunkhwa by Telenor Pakistan. The same model could be developed in other parts of the country for timely transmission of information to stakeholders.
o The textile sector constitutes a predominant portion of Pakistan’s exports and it has remained stagnant for the last five years. Pakistan is the fourth largest producer of cotton in the world, yet its total textile export is only about US $13 billion. The stagnation is attributed mainly to the energy crisis but there are many other contributing factors to the deterioration of the textile sector. One of the most severe challenges the exporters face, apart from the energy crisis, is US $1.5 billion stuck (in terms of sales tax and custom duty refund) with the Federal Board of Revenue for refunds. If this capital was refunded it would not only be reinvested in textile sector but also contribute in research and development programmes.
o Product diversification is required for socio-economic growth. Although agriculture and textile exports are major contributors to GDP in Pakistan, it now needs to begin investing more in the development of value added and medium to high-tech products. Most important at this level is ICT. Investment in the information and communications technology and easy access to the internet has transformed societies internationally. This factor has primarily led to globalization and knowledge based economies. Pakistan should revamp its digital capital policies and allocate more resources to this sector. At the moment Pakistan does not even have a process for codification of components and subcomponents of ICT technologies. The Nation’s digital capital should be enhanced at a comparable level of its physical infrastructure.
o In addition to diversification, the existing economic sectors also need attention from the Knowledge based economy perspective. ICT technologies like access to 4G networks and android phones need to be introduced in agricultural sector. It is also imperative to reinstate the need for non-conventional entrepreneurship in the agricultural sector.
o There is a symbiotic connection between knowledge and energy. Both follow similar trajectory of growth. The depletion of conventional sources of energy and the excessive emissions of carbon dioxide, compel the scientists and policy makers internationally to devise new ways of energy generation. This leads to innovations in technology. The increase in gas prices was the driving factor behind the discovery of shale oil and gas reserves. Shale reserves (worth of 9.1 billion barrels) have also been found in Pakistan. The discovery of shale oil will put Pakistan on international oil map. A balanced energy mix, exploring indigenous resources and enhancing energy conservation mechanism as well as conservation awareness would be useful in countering energy shortage. Pakistan has eight coal based power plants. Modern techniques can make coal more effective and less polluting. As regards the shale reserves and to exploit the shale oil potential, Pakistan needs unprecedented business, security, regulatory and investment reforms and technological capacity.
o International cooperation is fundamental in learning international best practices. Pakistan should strive to enter partnerships with international technology leaders and provide opportunities to young scholars to collaborate with international universities and industry to create new startups. In this regard China-Pakistan Economic Corridor (CPEC) will help achieve Pakistan’s knowledge economy goals. In this regard, foreign ministers should also be attracted by providing various incentives since now the security situation has almost been successfully addressed. An early completion of the Economic Corridor will further add to the much improved security environment in Pakistan. Pakistan’s international economic standing is already predicted by the Forbes in its article depicting Pakistan as the next economic success story of Asia.
o The American model of using academics and technocrats as policy makers can be adopted or advisory councils for the legislators can be created leading to more informed decision making. There are 11 federal ministries that should coordinate for a free flow of ideas and resources and this process should be followed at lower level of governance. The selection process of our public sector CEOs needs to be changed and be based on merit and matching the skill of the CEOs of similar organizations. Bureaucracy should contribute as a facilitator in promoting knowledge-based economic growth of the state. In this context, civil service structure should also be transformed and the ‘Rules of Business’ document needs to be revamped as most of its provisions are obsolete now.
o Operationalizing the vision documents and policy papers such as vision 2025 can be done only through five year plans that are more concrete and should also incorporate budgetary allocations for specific projects. Additionally, coordination gaps between policy papers of different ministries and finance sectors need to be plugged. For example, three policy papers — talking about enhancing the capacity-building of service sector, Poverty Reduction Strategy Paper prepared by Finance Division of Pakistan and Pakistan: Framework of Economic growth and Vision 2025 prepared by Planning Commission of Pakistan, have conceptual gaps or incoherence. In order to have a common national strategy for human resource development, knowledge economy and services sector, these gaps need to be filled.
o Both China and Japan are great models for Pakistan to learn from best practices followed by these two economies. Pakistan should learn from China which has moved from ‘Made in China to Created in China Model’, and should strive to create products in Pakistan. Similarly, Pakistan should also learn from Japan. In this regard, basic infrastructure development of highest quality and durability is what modern Japan is known for and it is worth learning.

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