With a median age of 23 years, Pakistan is a predominantly young country confronted with a number of structural challenges. Extrapolating labor force data shows that 100 million Pakistani youth entering the labor force in the coming decades. If the country wishes to promote sustainable economic growth, Pakistan must create new jobs to support the growth of its middle class. And that requires more innovation. The case for innovation is straightforward as it has long been understood that sustained growth and development require sustained innovation.
Without innovation, capital investment will run into diminishing returns as both growth and development will slow down resulting in minimal new job creation. If we think of the economy as a machine, in Pakistan we have been concentrating on growing the economy by getting more people to turn the handle of the existing machine, whilst our competitors in the region have been building a longer-term advantage through investing in a much better economic machine.
How can Pakistan increase the innovators and entrepreneurs?
While societies can advance for a short while by making incremental adjustments to the status quo, long-term development requires entrepreneurship and innovation. When too large a portion of potential innovators and entrepreneurs choose either to seek rents within the context of the status quo or to leave the society altogether, development slows or comes to a halt. Creating a space for entrepreneurship and innovation in Pakistan would therefore require encouraging the subset of potential entrepreneurs and innovators who choose neither to confirm nor to depart but to stay and build something new.
Furthermore, much more can be done in Pakistan to increase the pool of innovators and entrepreneurs in order to enable them to create the jobs of the future. If we look at history, the core to the model innovation is the observation that it spreads from person to person. It is a frame of mind we pick up from people around us. Most innovation policy today focuses right at the end. Instead of trying to get people excited about innovation, who might be unaware of its very existence, most innovation policy in Pakistan helps those who are already innovating. This approach leads to many lost potential innovators.
Anton Howes argues that “Everything else we worry about when promoting innovation, from funding to intellectual property rights, or from training to social acceptance, is in a sense downstream of it. This is not to say that such policies are unimportant, but that they only affect invention quite far downstream.” To truly increase innovation, Pakistan needs policies focused on what goes on upstream, before much of the supply of new inventors and innovators is inevitably siphoned off into distractions, dead ends, and failure. Increase the strength of the flow upstream, and everything downstream flows faster too.
Learning from Dr. Carl Benedict Frey
For instance, Dr. Carl Benedict Frey at Oxford University has argued “we know that children who are exposed to innovation early in life— are more much likely to become inventors themselves. Thus, leveraging the educational system to expose more children to innovation in the formative school years seems like low-hanging fruit.” This approach has yielded positive results in many countries. For example, in Estonia, the ‘I am an entrepreneur’ program aims to promote entrepreneurship education in schools across the country. The scheme aims to ensure that entrepreneurial competencies are developed at all school levels from an early age.
Upstream policies such as the one in Estonia are difficult to formulate due to the problem of measurement in potential outcomes. However, this should not make such policies any less important as increasing the supply of individuals who desire to become inventors and innovators is possibly one of the most significant policies that any government can implement. As the 2006 Nobel laureate in Economics, Edmund Phelps once remarked, “It is neither scientific discovery nor engineering expertise nor entrepreneurial talent that produces periods of extraordinary economic expansion but, rather, the willingness of people at every level of society to embrace innovation.”
It takes a creative entrepreneur to solve the problems in developing and marketing innovation; it takes managers who solve the problem of evaluating the innovation’s likely gains if any; it takes consumers to solve the problem of evaluating the gains, if any, of bringing an innovation home; and it takes financiers who can do better than choosing randomly in deciding which entrepreneurs to back. In sum, it takes a whole village for an innovation to be developed, launched and adopted.
The writer is an economist and strategic planning expert. He can be reached at email@example.com. The views expressed in this article are the author’s own and do not necessarily reflect the editorial policy of Global Village Space.