In Pakistan rent-seeking culture dominates the businesses where entrepreneurs mainly rely on government support (protection, subsidies and licensing etc.) to run and grow their business rather than focusing on innovation and risk taking (entrepreneurship). Pakistan lacks in innovation as ranked at 117 on Knowledge Economy Index while Sweden secures the top in position, China at 84 and India at 110 (knoema based on World Bank). If Pakistan allows Chinese/foreign innovative industries or businesses to operate in the country, it will/may bring in Knowledge Spillovers effect and Learning by Doing practices from foreign/Chinese’s businesses. Possible technology transfers: Through technology transfer and imitation Pakistan will be able to innovate and invent.
In Pakistan businesses are mostly involved in conventional/inherited business. We lack at demand for innovations so basically we have to create demand for innovations. For that purpose, serious reform in education system requires to produce quality graduates to become entrepreneur (risk takers and innovators) rather than job seekers/employees. Step by step process from imitation to innovation and invention is required to emerge as knowledge economy. Competing Chinese/foreign innovative industries shall/may bring fresh skills and ideas in indigenous innovative industry of Pakistan. Through competitive environment our businesses can be made dynamic as few businesses in Pakistan grow to be large conglomerates multinationals (Haque, 2007).
Under China-Pakistan Economic Corridor (CPEC) umbrella Chinese investment in various sectors including energy, infrastructure, manufacturing and real estate is bringing new technologies which will enable the innovation in Pakistan. For instance Chinese have introduced new quarrying technique of latest wire-cutting in marble and granite extraction that will help to reduce wastage of marble caused by conventional methods of quarrying and will increase the prices of marble products (Published in Business Recorder, 2017). Possible relocation of world class export oriented Chinese and foreign companies will develop industrial clusters and through forward and backward linkages based on innovation and imitation industrial development will take place. CPEC and overall positive macroeconomic outlook has encouraged Steel industry to expand their manufacturing plants and meet most of its steel demand through domestic production rather than imports (Published in Express Tribune, 2017).
New plants and expansions brought by CPEC encourage economies of scale and new technologies that will reduce manufacturing costs and improve productivity. Special Economic Zones (SEZs) under CPEC are the gateway and huge platform for innovation. Smart cities inculcating the environment for innovation in country by offering high tech products such as agri-related zones will use drones to sprinkle pesticides spray.
CPEC is reviving the energy sector by introducing high-tech energy generation projects based on Hydel, Wind and Solar technologies that are helping to overcome energy shortages. Secondly, energy generation from renewable resources is environment friendly and promotes green Pakistan.
Though Pakistan lags behind many of its counterparts in the use of modern technology and innovation but after entering into cooperation with China under CPEC country is optimistic to achieve progress in catching up with global pace of technological development and innovation. CPEC is a platform bringing new technologies and innovation in economy. It is a myriad of huge projects encompassing vast areas including energy, infrastructure, real estate, communication, machinery plants and tourism. Chinese as well as foreign firms will help Pakistan to build the economy based on high-tech products through modern skills and technology diffusion.
In the present world of knowledge economy, no country can sustainably grow without investing in science and technology. In the world of survival of fittest Pakistan has to plunge into sophistication otherwise we will not able to compete with rest of the world. In this age of fourth industrial revolution the prevailing competitive environment due to advanced and sophisticated technology we have to rise through properly adopting these skills
China has also advocated that Pakistan should emerge as an independent economy rather than depending on other countries including China and this vision emanates from the long-tested friendship between both countries. Over the years Pakistan has relied on external aid under the geo=strategic hard-core realities which has always kept us below the surface. Since Pakistan has taken and turned its projection towards geo-economic necessities which has remained a key factor in the development and progress of many under developed countries.
Necessity is mother of invention and science and technology has evolved and then transformed into a basic ingredient of knowledge economy. Now Pakistan has to realise the importance of this essential input. There is dire need to invest in research and development (R&D) activities to develop the country which should be technologically advanced. Due to lack of domestic investible funds the collaboration of other foreign countries such as China may play a complementary rather than competing role in achieving this target. Foreign direct investment (FDI) from China and/or rest of the world may bring in crowding in effect and play a positive role to boost the economy of Pakistan.