Lahore School of Economics

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Lahore School of Economics Conference on Management of the Pakistan Economy
March 31, 2016

Lahore School of Economics’ 12th International Conference on Management of the Pakistan Economy concluded here this evening. The theme of the two-day Conference was “Technology, Entrepreneurship and Productivity Growth – Where Pakistan stands and where it must go.” The Conference was attended by renowned academicians from abroad and Pakistan, local industry captains, senior officials from the Ministry of Science and Technology, officials from the State Bank of Pakistan, and faculty and young scholars from the Lahore School.

The second day of the conference started with a session on Entrepreneurship and Innovation in the Technology Sector: Constraints to growth. Dr. Naved Hamid (Professor of Economics and Director, Centre for Research in Economics and Business, Lahore School of Economics) and Mr. Faizan Khalid (Visiting faculty, Lahore School of Economics) highlighted the rapid growth of the digital economy globally since the 1990s. While this phenomenon reached Pakistan with a lag, the IT companies can be a major source of investment and growth for the country in the next decade, and thus it is important to identify the constraints to growth of this sector.

Carrying forward the discussion, Dr. Mahmood ul Hassan Khan (Senior Economist, State Bank of Pakistan) discussed the importance of innovation and Science and Technology (S&T) in enabling economies to achieve sustainable economic growth. The paper argued that firms engaged in medium- to high-tech production tend to gain more from innovation and are on average more productive compared to enterprise which are limited to low-tech systems.

The third paper of the session was presented by Ms. Farah Said (Assistant Professor, Lahore School of Economics) on her co-authored work with Dr. Azam Chaudhry (Professor, Lahore School of Economics), Ms. Mahreen Mahmood (CSAE, University of Oxford, UK). Their paper evaluated the impact of access to micro-finance on new business start-ups run by women. The authors found a significant impact of a micro-finance product on the likelihood of setting up a business; however this does not translate into any improvement in household asset holdings or independence of women in making ordinary household decisions over the same year.

The first session concluded with a presentation by Ms. Nazia Nazeera (PhD candidate, University of Malaya, Malaysia) on her co-authored work with Dr Rajah Rasiah (Professor of International Development at the Faculty of Economics and Administration, University of Malaya, Malaysia). The paper revisits the debate on Pakistan’s premature deindustrialization and analyzes the impact of over-dependence on the clothing and textile sector on the economic development of Pakistan. The presentation concluded by exploring the potential for moving towards high value added manufacturing industries.

The second session of the conference focused on S & T upgrading and innovation: Industry Experience. The first paper of the session, presented by Dr. Inayat U Mangla (Visiting faculty, Lahore School of Economics), emphasized the importance of developing a comprehensive strategy for harnessing science and technology to promote economic growth on a sustained basis. The paper conceptualized the role of technology in the process of economic growth and identifies policy areas that can be instrumental in promoting technological modernization and innovation.

Mr. Aezaz Hussain (Chairman, Systems Ltd., Lahore) made the second presentation of the session. He emphasized the importance of the use of IT for improved communication network and mobile computing as a potentially disruptive force for changing governance and economic activity. Taxation at an early stage of the industry can result in slowing down of the growth of the industry. There is a need for the government to provide an enabling environment which includes access to venture capital and entrepreneurial mentoring and support.

The discussion was carried forward by a presentation from Mr. Irfan Aqueel (Chief Executive Office, Millat Tractors Ltd., Lahore). He discussed how vendors and foreign buyers affect the innovation process in terms of technology exposure and development of products as per market needs. Demand from foreign buyers has forced the industry to improve its products and efficiencies for global competition. The MTL’s new export venture with AGCO will accelerate its product innovation and development process and in the years to come local tractor and farm machinery industry is expected to follow its footprints.

The last presentation of the second session was made by Ms. Mahvish Faran (Research Fellow, Lahore School of Economics). Her paper was co-authored with Dr. Azam Chaudhry (Professor, Lahore School of Economics). The presentation highlighted the sources and areas of innovation and technology upgradation in a sample of firms in Lahore. The presentation concluded that firms plan to upgrade technology in areas of production and marketing. However, energy and access to finance is an impediment to innovation. There is a need to bridge the informational gap between the public sector, academic institutions and the business community.

The third session of the day discussed the role of Pakistan’s public policy institutions in the promotion of technology innovation. Dr. Sikandar Rahim (Former World Bank, Washington D.C) highlighted that the lack of industrial progress over the decades should be a cause for concern about the future. While attracting foreign direct investment into Pakistan seems unlikely given the current conditions, Pakistan can follow the path of China and South Korea by acquiring technical knowledge through subcontracting and joint ventures with advanced economies; and therefore being able to participate into the production processes of foreign firms.

The discussion was continued by a presentation from Dr. Shaukat Hameed (Coordinator General, COMSTECH, Islamabad). Dr. Hameed stressed on Pakistan’s falling competitiveness, slow organizational changes, inadequate workforce skill levels and stalling productivity and innovation. According to Dr. Hameed, Pakistan faces a serious risk of deindustrialization unless the dynamics and disruptive nature of managing modern technology are understood and incorporated in the public policy.

Mr. Fazal Abbas Maken (Federal Secretary, Ministry of Science and Technology, Islamabad) made the final presentation of the third session. He emphasized that the R&D organizations have shifted their focus from In-house R&D to a demand driven R&D culture. The policies of the Government aim to promote entrepreneurship, and different ministries have evolved their policies to create a business friendly environment in order to support new entrants in the market.

Where do we go from here? Dr. Bilal U. Haq (Research Professor at the Smithsonian Institute, Washington and at the Sorbonne University, Paris), Dr. Rajah Rasiah (Professor of International Development at the Faculty of Economics and Administration, University of Malaya) and Dr. Rashid Amjad (Professor of Economics and Director, Graduate Institute of Development Studies, Lahore) made the final remarks by tying in all the major findings of the papers presented at conference and discussing the future trajectory of Pakistan’s productive path. All the sessions were followed by informative and lively discussions based on questions asked by the participants.

Also in Nation, Business Recorder, Daily Times, The Educationist

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Labels: CREB, Management of Pakistan Economy, Pakistan, Pakistan Economy