In order for Pakistan to emerge from its present problems of massive poverty, hunger, deprivation, joblessness and foreign debt, there is no other way except to tap into our real wealth—our children— and migrate from the low value added agricultural economy to a high value added knowledge economy. With an overall population of some 185 million, we have almost 100 million below the age of 20. This window of opportunity will not last long and unless we invest massively in education, science, technology and innovation over the next decade. This demographic advantage that Pakistan presently possesses will otherwise become a huge burden. It is only through fostering far sighted innovation policies that we will be able to develop a knowledge economy. The release of this creative potential can only be achieved through investing into a high quality education system and having mechanisms in place that link the process of education with socio-economic development. The main ingredient of a knowledge economy is highly trained knowledge workers. For this it is necessary to slash our budget allocations in other sectors and to start investing at least 7% of our GDP in high quality schools, colleges and universities. Money alone will however not be enough. The governance systems under which our schools function will need to be drastically changed, education taken away from the provinces and given back to the central government, a single national curriculum and a single national exam introduced at the matriculation and higher secondary level, and appointments of teachers at school, college and university levels be done through a central national selection system with much better salaries to ensure that bright young men and women can take up careers as teachers. Higher education should be given a top priority, and the funding of universities made compatible with that prevalent in Singapore, Hong Kong or the leading Indian universities, and linked to national and international rankings. This would involve a 20 to 50 fold increase in the budgets. Such measures will allow us to prepare the required number of high quality professionals in areas of national need so that they can then be utilised in the production and export of high technology value-added products.
Besides measures to attain universal literacy, Pakistan must establish good technical and vocational schools, and set up world class Centers of Excellence in selected fields. To foster innovation, it will be necessary to establish technology parks to allow new technologies to be promoted through business and technology incubators, set up Venture Capital funds to promote innovation and entrepreneurship through new start-up companies, and establish industrial clusters in key fields such as biotechnology, engineering goods, electronics, pharmaceuticals and other high tech areas. I spent last week in Boston and had the opportunity to visit Harvard and MIT and deliver lectures there. MIT graduates have founded more than 4000 companies that employ 1.1 million people and have annual sales of over 240 billion US dollars. This is what one world class institution can do, but our leaders are completely ignorant of this dimension for development. Pakistan is alas ranked among the bottom 8 countries of the world, but who cares? We just go for political gimmicks such as distributing computers worth Rs. 4 billion to youth or giving them loans without really trying to tackle the three key problems in education: access, quality and relevance.
The government also needs to introduce mechanisms to foster private sector Research and Development (R & D). Nations can only enhance the level of innovation and competitiveness by massive investments in R & D. If we look at how nations such as Korea, Japan, China, USA, Canada and many European countries have progressed, on common theme is that through private sector R & D most companies in USA, Canada, Europe, Japan and Korea have been able to invent new products, improve the quality of existing products and enhance exports of high value goods. Indeed it is notable that the global share of private sector R & D has been rising much faster than government R & D, particularly in rapidly developing countries such as Korea, Singapore, and Taiwan. The total world R & D expenditure is now estimated to be about US$ 1.4 trillion of which companies and businesses contribute about 63% while the governments contribute only 37%. Private sector R & D amounts to about 70% of the total R & D expenditure in China, 75% in Korea and Japan, 70% in Germany and 68% in USA. By contrast the private sector R & D in Pakistan and most other OIC member states is less than 5%. The availability of trained scientific manpower in Pakistan and other OIC countries is another major bottle neck to development. There are 10,563 scientists and engineers per million population (pmp) in Finland, 9,222 in Norway, 8,846 in Denmark and an average of 4,481 in EU countries. However there are only an average of 451 scientists and engineers in OIC member countries and about 300 pmp in Pakistan, highlighting how far we have fallen behind due to the myopic policies who have ruled over us. Private sector R & D can be promoted through offering tax incentives, grants for promoting innovation and training of manpower, subsidies for establishing high tech industries or establishing bridging institutions such as technology parks and incubators. The legal instruments necessary to protect the rights of inventors (such as the US Bayh-Dole Act) are also missing.
A focused approach to developing certain key manufacturing industries is also important. Countries such as Korea, Japan, Singapore, and Taiwan have focused on selected industries such as automobiles, engineering goods, ship building, electronics and computer manufacture. The development of these industries was stimulated by giving incentives, and helping companies to develop capabilities in design and engineering. Semi-government bridging institutions were established including technology parks, industrial parks, engineering centres and incubation centers. The transfer of cutting edge technologies from foreign countries was promoted by establishing links with diaspora abroad and facilitating their migration to their home countries.
The approval and implementation of robust innovation policies is vital to ensure competitiveness, industrial development and growth of exports. The knowledge generated in our research institutes and universities needs to be commercialized, and mechanisms to make this happen must be put in place. In China, India and some East Asian countries the demand for innovation has been stimulated through promoting firm level learning, giving incentives to private companies for hiring skilled engineers and researchers, giving tax incentives for establishment of high tech industries, promoting inter-firm collaboration in order to achieve economies of scale and establishing linkages with global production networks. However all such steps to promote innovation must be grounded on a strong legal infra-structure involving protection of Intellectual Property Rights and backed by regulations that ensure the quality of products, minimum productivity standards and fast commercial courts for dispute resolution.
It is high time that our government woke up from its slumber and started investing massively in education, science, technology and innovation.
The author is the former Federal Minister for Science & Technology, former Chairman of Higher Education Commission and currently President of Pakistan Academy of Sciences