A Knowledge-based economy is an economic system that emphasizes that generation, acquisition, and application of knowledge and information as key drivers of economic growth and development. In a knowledge-based economy, the production and use of knowledge play a crucial role in creating value and driving innovation. The purpose of having a stronger economy is to improve the well-being of the Pakistani people. But well-being is not only about poverty reduction; it is also about reducing inequality. Few countries have come up with effective solutions to the social, political and economic problems created by inequity. Knowledge can play vital role in innovation, giving Pakistan the tools to address this challenge.
Pakistan has a number of building blocks in place for a strong research system, but all of them, whether they are government or independent research agencies, are seriously underfunded and lack capacity. Attention is needed to identify the strategic knowledge needs of the government as well as the public, to foster both public and private engagement. A clear knowledge agenda would give focus to what changes are needed and direction for moving forward.
Research is seriously underfunded in Pakistan; according to OECD DATA (Organization for Economic Co-operation) it stands at 0.7 percent of gross domestic product. In other middle-income countries, Brazil spends 2.3 percent of gross domestic product on research and India spends 5.6 percent. In most economies with heavy research spending, about two-thirds of resources come from the private sector. In Pakistan, the private sector’s contribution is less than 7 percent. Increasing research funding must also build on strategies for more effective private sector participation in research production.
Pumping in more money for research without attention to the pool of knowledge workers and knowledge institutions is not the answer, as money will go unspent or be poorly spent. Well-trained researchers are critical to building a strong research system. The new administration has already declared its view of the importance of education for all and of improving education delivery. It is crucial that this priority reaches up to and includes the post-secondary level. Building the community for a knowledge economy will require increasing the research skills of university graduates. This requires that priority be given to research within Pakistan’s university system and a higher status placed on research as a profession. Building on the strengths of both public and private universities to create research universities would enhance the capacity of research centers and think tanks to provide high-quality advice to policy makers and the wider community. It would enhance opportunities for innovation and multiply the options for employment generation and improved governance.
The largest economies in the 21st century are driven by a pool of highly skilled workers who are able to innovate new products (These products can be improvements or advancements over existing offerings in the market, providing unique features, better performance, or addressing previously unmet needs) and approaches to working and managing work. Countries foster innovation by supporting new ideas, which can lead to competitiveness. Pakistan needs a healthy, skilled, and resilient population to ensure high economic growth that is both sustainable and inclusive, with the right policies and investments, the growing working-age population can become healthier, more educated, more skilled, and more productive and can earn more if the economy generates more and better jobs. To achieving these milestones, Knowledge has become the key economic resource and the dominant-and perhaps even the only-source of competitive advantage. It requires high-quality human resources, an economic structure that is based on competitive advantage, advancement in science and technology, improved infrastructure and legal and bureaucratic reform. These building blocks require a system wide approach to fostering a knowledge-based economy. Research can make practical contributions and be directed to the goal of producing evidence to be used by policy makers and industry to increase national competitiveness.
Increasing funding and the diversity of research organizations receiving funding will enhance both the value and utility of research. Funding through both the Pakistani government and independent research institutes increases both the range of options open to the country in decision-making and the potential for innovation and economic growth in new areas.
Pakistan needs to strengthen its economy, whether it is roads, ports, railways, connectivity or a host of other major projects. The evidence that can support these undertakings also needs infrastructure of qualified human resources and support systems at the national and local levels. This is not a short-term set of problems that are easily and quickly resolved. But for Pakistan to be globally competitive and a major economic player, it is critical that it invest now in building the knowledge infrastructure of well-qualified knowledge workers, stronger systems for integrating evidence into policy and innovation, and more accessible pools of evidence. These are essential ingredients for a sustainable and competitive economy. Building a knowledge-based economy cannot be achieved by merely addressing one of these challenges. Rather, it calls for system wide approaches that stimulate debate and action on multiple fronts. The knowledge sector initiative is one such contribution to building a strong knowledge-based economy that assists Pakistan in fulfilling its potential as a leading economy in the 21st century.