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Tuesday, July 16, 2024

How governments can help in technology-led economic development?

Technology encompasses a huge body of knowledge and tools that ease the use of economic resources as a way to produce goods and services efficiently and innovatively. Perhaps the key reason for the rise of these clusters of innovation has been the role of the Government is acting as a supporter, facilitator, cheerleader, advocate, and investor in technological entrepreneurship & innovation.

After my graduation, I worked in the tech startup ecosystem in Pakistan for a few months. As a starry-eyed young Pakistani who was fresh out of university, I often argued about how policymakers should take a backseat and allow entrepreneurs to build and disrupt markets. I envisioned that policymakers came with obsolete ideas and stood in the way of tech entrepreneurs who were adamant to not only disrupt existing markets but also to build new ones with their innovative products & approaches. I saw entrepreneurs creating jobs, introducing new technologies, and fostering a culture of experimentation and learning in their communities. It was only fair to make the case for why the Government of Pakistan should step back if it was unable to update its public policy to keep up with the time, but I had been missing a major point.

For innovation to drive the economy, there is no need for the Government to take a backseat, but rather assume an enabling leadership position to support the technology-led economic development. Or at least that’s what Mariana Mazzucato, also known as the world’s scariest economist, argues in her work. Her book The Entrepreneurial State to Mission Economy: A Moonshot Guide to Changing Capitalism, she presents evidence on how it has been the high-risk, early-stage public funding in research & development that drove the technology and innovation-led development of the United States’ economy.

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How does government need to work on technological entrepreneurship?

If the state encourages and rewards risk-taking and innovative ideas, then it is only a matter of time before technological entrepreneurship & innovation take off to act as an instrument for boosting productivity and generating better outcomes for the country. For that to happen the Governments of the future need to be entrepreneurial, mission-oriented, and bold risk-takers, who also support and advocate for people who are paving the way for generating new knowledge in an economy. Since an integral component of a knowledge economy is technology entrepreneurship and innovation, it is imperative for the state to work in collaboration with the private sector to encourage and facilitate risk-taking and experimentation for economic growth.

That’s where the newly established Special Technology Zones Authority (STZA) comes into function in Pakistan. It cannot be denied that technological innovation is the core growth driver for development in the 21st century. Today, it is viewed as one of the most important and obvious policy tools to transform the economy and export base from low technology to a higher-end, value-added economy. The ability to leverage entrepreneurs and knowledge workers to innovate is a key tool that some developing countries have relied on to be able to leapfrog ahead and produce goods & services required by the global markets; thereby, adding the much-needed jobs and alleviating poverty.

From China’s Zhongguancun (Z-Park), which has emerged as a supercluster of Asia’s leading entrepreneurs, to South Korea’s DaedeokInnopolis and Singapore’s Sichuan Hi-Tech Innovation Park, they have all played a crucial part in their respective countries’ rise in economic and technological prosperity in competition with the rest of the world. Combined with vibrant academia and venture capital firms in the vicinity, these superclusters have produced successful start-ups and hosted manufacturing and R&D plants for some of the world’s largest tech companies.

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Understanding STZA and the way forward

Perhaps the key reason for the rise of these clusters of innovation has been the role of the Government is acting as a supporter, facilitator, cheerleader, advocate, and investor in technological entrepreneurship & innovation. In light of the success of technology zones around the world, the Government of Pakistan has established STZA with a mandate of providing world-class digital and physical infrastructure through setting up Special Technology Zones (STZs) and putting Pakistan on the global technology map.

Special Technology Zones are meant to be a knowledge ecosystem in a geographical parcel that comprises technology companies, startups, R&D facilities, universities, incubators, and other facilities. The respective players take advantage of the tax incentives, establish strong linkages with each other, and partake in knowledge-intensive activities for the shared goals of technology entrepreneurship and innovation that, ultimately, contribute to the socio-economic development of the country.

The Authority hopes to champion a customer-oriented mindset in the government, translating the red tape into a red carpet experience for its relevant stakeholders. It will provide companies with a direct link to the government through its one window facility, mitigating the hurdles that come with red tape and act as one of its kind customer-oriented state authority. Ultimately, STZA has to show that the state must be the leader in taking a bet on its talent and facilitating them to grow, thrive, and flourish in today’s world.

Read more: Chinese Entrepreneurship: Lessons for Pakistan?

From the U.S to China, it is the state’s funding and policies that have been behind the rise of some of the world’s greatest innovators and companies. Mazzucato has also argued in her work that governments have played the role of leading investors in innovation to spur the growth of their respective knowledge economies. If Pakistan is to give rise to the greatest innovators of tomorrow, then it is about time the Government takes the lead in investing in its talent. With the support of provincial governments, STZA is a strategic initiative through which the Government can lead the way towards technology-led economic development.


The writer works as the Manager, Linkages & Publications at the Special Technology Zones Authority (STZA) in Pakistan. She holds an undergraduate degree in Social Research & Public Policy from New York University. She tweets at @malik_warda7. The views expressed in this article are the author’s own and do not necessarily reflect the editorial policy of Global Village Space.