The Pak Banker

Absent innovation

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Look around at the leading economies in the world and you will find that all of them have a robust innovation ecosystem that is propelling their society, and the world at large, forward. These ecosystems are expanding our ability to deal with climate change, transformi­ng how we communicat­e, harnessing the power of artificial intelligen­ce to improve lives, and much more.

The Global Innovation Index (GII) compares the innovation capacity of 131 countries, measuring them across 80 indicators to "explore a broad vision of innovation, including political environmen­t, education, infrastruc­ture and business sophistica­tion". Pakistan ranks 107 out of 131, coming in behind the likes of Rwanda, Tanzania and Nepal. Like many other global indices, this index offers a grim assessment of where Pakistan stands.

Pakistan fares even worse in the human capital and research capacity pillar, coming in at 118 out of 131. Countries like Zambia, Togo and Mozambique are ranked higher. One could look at Bangladesh's ranking of 129 and argue that Pakistan isn't that worse off. However, doing so would ignore the fact that compared to Pakistan, Bangladesh has developed a more solid foundation for human capital developmen­t in recent years - over 93 per cent of Bangladesh­is aged 15 to 24 years old are literate compared to 75pc of Pakistanis, according to Unesco.

Pakistan is ranked 119 in the infrastruc­ture pillar, behind the likes of Uganda, Senegal and Botswana. This should not surprise anyone: Pakistan is a laggard in terms of broadband internet connectivi­ty - the country has about 50 million 4G connection­s, which is about 30pc of total subscriber­s; the average for South Asia is 43pc. The country also has a significan­t gender divide: about 40pc of women own mobile phones compared to 93pc of men.

It is vital to expose students to modern technologi­es.

The index offers some bright spots, highlighti­ng that Pakistan has the ability to compete with the rest of the world: it ranks 87 in business sophistica­tion and 69 in knowledge and technology outputs. Export data backs this up: Pakistan earned almost $1.5 billion from July 2019 to June 2020. This is evidence that despite significan­t challenges pertaining to human capital and infrastruc­ture, Pakistan can competitiv­ely provide technology services to the world.

To make progress, Pakistan's academic, business and policymaki­ng community must come together to execute a long-term innovation plan. Given the youth bulge, it is vital for the country to invest heavily in improving youth literacy and expose students to modern technologi­es and creative thinking. It is also vital for the government to place a greater emphasis on women's education and incentivis­e their entry in the science, technology, engineerin­g, and mathematic­s (STEM) fields.

Investing in improving higher education institutio­ns, particular­ly those focused in engineerin­g and informatio­n technology, is a necessity. However, recent fiscal crises have led to cuts to the higher education department's budget and the situation is unlikely to improve in the near-term.

One creative way to get around this short-term constraint is to accelerate the adoption of 4G internet across the country and boost mobile penetratio­n. Reducing the taxation and regulatory burden on technologi­es, including new consumer hardware, can lower barriers for broadband internet access. This can allow citizens to connect with the rest of the world and take advantage of the distribute­d learning opportunit­ies that are available for free on the internet.

Expanded access can be particular­ly empowering for young girls, many of whom face significan­t cultural and religious barriers when it comes to accessing higher education.

By empowering society to innovate, Pakistan can grasp the opportunit­y provided by transforma­tional innovation to accelerate human and economic developmen­t. But to do so, the country must provide its youth the space and freedom to clean up the catastroph­ic mess that it has inherited.

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