The economics of knowledge capital

932

Tahir Mushtaq

THE fundamentals of economy are taking massive transformation in the wake of ‘Fourth Industrial Revolution’. The traditional sectors of economy are being replaced with new models of creative economy, leveraged by efficient and cost effective means of delivery by capitalizing the Power of People’ to its best. Knowledge is the driving force to enable this change at a quicker pace. California is one of the most pertinent examples to showcase the power of this model. The economic output of this one state of USA is higher than the economic output of the whole UK.
Here, the question arises. Will Pakistan miss this wave like it had missed the previous ones or make it a watershed change lever for its economy? The role of policy-makers is very critical in this regard. Unlike previous waves of industrial revolution where the barriers of entry for countries like Pakistan were quite high in terms of cost and physical resources, here we have competitive differential in the shape of talent, energy and passion of its youthful population.
Pakistan is blessed with huge demographic dividends with sixty four percentage of population under the working age of thirty years. In contrast, the Western world is faced with the challenge of shrinking working age population where by year 2050 only 2.6 workers would be available to feed one US pensioner with more worsening situation in France, Germany and Italy with only1.9, 1.6 and1.5 workers respectively to feed one pensioner accordingly. This demographic dividend can usher in high value for Pakistan’s economy, if tapped into the fitness criteria of knowledge world.
‘Education and Skill Development’ is the key lever to harness this potential to gear up the knowledge economy. The rate of return on human development investment is three times higher than the financial capital investment. Pitiably, in the past, Government’s focus on this very vital aspect had been very low, resulting into abysmally very poor ranking of Human Development Index (150th rank out of 189 countries, 2018) putting us behind not only against our South Asian neighbours – India and Bangladesh – but some of the African countries like Rwanda and Tanzania too.
This is ‘Now or Never’ situation. Our policy-makers have to create an emergency for human development by putting an urgent focus on it. The fundamental must is the formulation of ‘National HRD Policy’ to lay out a policy map. This policy document should spell out the structural lay out of the human development plan for the country. That may include the formation of Human Resource Development structure in the shape of Federal and Provincial Development Councils in addition to suggestive revamping of ministerial structure by converging numerous silo functions into integrative model under Ministry of Human Development with cross functional reporting matrix. This is to be done in a cost effective manner by aligning the current resources into new innovative models instead of creating new establishment.
Innovative models of funding are to be explored on the pattern of Korea where IPF (Information Promotion Fund) based funding was the key lever in transforming Korea from an agrarian society into information society. The employer based skills levy is one of the most effective financial strategy to spread the benefits of experiential learning to raw talents as effectively being implemented in over sixty countries across the globe. Skills based experiential education is to be remodelled on the pattern of “Senai model of Brazil”. This model yielded high employment to intake ratio exceeding over seventy percent. Currently in place vocational set ups like NAVTEC, TEVTA need to integrated under one uniform structure to ensure synergy, along with radical transformation in learning content and methodology, making it more digital centric.
To make it happen, mindset transformation from ‘Physical’ to ‘People’ is imperative, and must be championed by all stakeholders under the lead of Prime Minister. We have to be mindful of this reality that the people are the real power, who can make or break the nations. Pakistan’human talent is profoundly great. I can pulse the level of energy and passion imbibed with great love for Pakistan. This opportunity can become liability if we do not heed the voice of time. Time is ripe to announce an “Education and Skills Emergency” in the country by urging all stakeholders to wake up to this reality and work in concert to develop the people of Pakistan. We have a great potential and great future ahead. Let’s make it together for a great Pakistan.
—The writer is former Member HRD, Ministry of IT.