Take the path of technology
In several billion years of human history, the last centuries have been dramatic in terms of technological development. The divide between countries in this context began with the first industrial revolution.
Western Europe, Australia, Canada, the United States and Japan continued their technological evolution, leaving most other countries at the periphery of the technological frontier. This has created growing inequalities in access to opportunities, goods and services. More recently, China has been able to grow faster and catch up through technological knowledge, replication and innovation.
Economic leadership is about technology, and the evolution of technology is about creating the right circumstances. Technological progress has defined the economic strength of nations. A while ago, talking about technology, we all imagined humans rushing behind computer screens, programming languages beyond the realm of mere mortals. We live in a radically different world today – a world in which we cannot imagine any business or job that is not in some way influenced by technology.
Today’s technologists can be found drawing an industrial building on auto-cad, doctors diagnosing people’s illnesses through telemedicine thousands of miles away, farmers on a tractor devising new strategies of digital agriculture, engineers in a warehouse building an e-commerce platform, or a student at a university designing new software to share educational resources in remote parts of the country.
We are all technologists now, and our jobs all involve technology. The importance of technology in our lives cannot be overlooked in Pakistan. This should be a serious wake-up call for the business community, the agricultural community and the service industry to embrace this new identity.
Policy makers would be better off learning the lesson of technology than trying to rely on repeating proven recipes that got us to where we are today. It is fashionable to throw more money into the system, which will always lead to more inflation and make people dependent on state aid. If Pakistan is to prosper, it will have to be a technological adaptor, if not a leader, in all key sectors.
The benefits of embracing technology can help uplift and grow all sectors of our economy. The only way to stimulate real and sustained economic growth is through productivity gains. This, by its very definition, means applying technology. Technology is the only way to be competitive on a global scale and to increase our exports in all sectors, while improving everyone’s standard of living.
Pakistan has become known for hitting well under its weight, for a country of 230 million people. Take the example of agriculture. Pakistan has truly lost its edge – extremely low productivity, colossal waste of perishable goods from farm to market and unsustainable loss of water are astonishing facts.
Taking advantage of new technologies in agriculture is the only way forward: agricultural robots selecting and picking fruits and vegetables, artificial intelligence analyzing crop data, assessing plant diseases and soil health, and machines that improve spraying, seeding and transport are all evolving technologies. Robots that constantly monitor and remove weeds will significantly reduce the use of pesticides and herbicides. Autonomous weeders connected to AI systems are being developed to identify and destroy weeds using lasers.
It’s all incredibly exciting, driven by precision agriculture. The countries that develop and adopt these technologies will be the ones that will lead the world in agriculture. Unless we embrace these changes, Pakistan’s advantages in agriculture would further erode and fall behind countries that have developed more sophisticated technologies. It is quite important.
Admittedly, the advent of the Covid-19 pandemic, climate change and more recent geopolitical uncertainties are all factors accelerating technological change. Changes in workplaces and reliance on fossil fuels are happening around the world. Lockdowns have led to a work-from-home culture, improving labor productivity by eliminating commuting time. The development of robotics has been spectacular and accelerated due to the restrictions imposed by the pandemic. According to research from a global investment bank, implementing e-commerce and digitizing the workplace are also expected to add up to 7% to above-trend productivity. It’s quite striking.
When it comes to technology, intellectual property rights and, most importantly, their enforcement cannot be overemphasized. While Pakistan has the framework in place, enforcement remains a challenge. National innovation systems, science and math education are all important factors that contribute to a country’s ability to move up the technology ladder. International benchmarking ranks Pakistan 123rd out of 158 countries on the Frontier Technology Readiness Index (Technology and Innovation Report 2021), rated as “weak”. Even Bangladesh ranks 112, in the lower middle category. On different pillars of the same index, we are at 146 on the ICT ranking, skills at 146 and finance at 132. Figures that are not very encouraging to say the least.
All of these things are worth mentioning as the budget season approaches. Pakistan’s federal budget must go beyond donations. The great drivers of the future, and especially the people who will improve our standard of living, are the entrepreneurial investors who adapt, adopt and introduce new technologies. Raising the standard of living ultimately depends on raising productivity, which is a function of technological change. If we approach technology as a low-ranking issue, then expect our high standard of living to stagnate further in the years to come. Budgets must be substantially devoted to technological change.
Pakistan can become a rapid technology adaptor. First, the country must focus on areas where it already enjoys a comparative advantage, such as agriculture, textiles and IT. Second, invention, research and development, and new industries thrive in an environment conducive to such entrepreneurial activity – the regulatory and fiscal environment is critically important.
Third, we need to discuss technological issues. Throughout the budgeting period, the focus is on whether the government is providing sufficient funding for subsidies, top-ups, creating physical infrastructure, or whether the benefits are generous enough to remote areas. We must realize that without the productivity improvements generated by technological change, there would be limited resources for other activities. The challenge for political leaders is to debate how to make Pakistan an innovative and entrepreneurial society. Enable entrepreneurs and innovators to forge their own path, accumulate wealth if they succeed, and continue to reinvest.
Fourth, we need to create an appetite for risk taking. Create effective national innovation systems aligned with industrial, trade, fiscal, monetary and educational policies. The state must encourage the creation of a market for innovation and visionary thinking. Fifth, companies must dream big, strive to solve complex problems, challenge the status quo, take risks and grow. They must rethink the way they do business and not shy away from creating disruptive technologies that can define the next era of Pakistan’s economic prosperity.
Great corporations progress because they are innovative, entrepreneurial and creative, and can think beyond investing in primary goods and brick and mortar. Public spending is necessary, but it will not make Pakistanis rich; innovation and entrepreneurship. In the 75th year of the adoption of the resolution on Pakistan, there must be a commitment to adopt a new resolution: “We will take the technological path to make Pakistan a prosperous nation”.
The writer is a former adviser, Ministry of Finance. He tweets @KhaqanNajeeb and can be reached at: