It seems there is no end to Pakistan’s economic woes. The country is going through an economic recession and is in desperate need of foreign aid and loans. Indeed, the current government has inherited serious economic problems however, today’s economic crisis isn’t novel. It occurs every five to six years not because previous rulers were sellouts but because Pakistan faces a very fundamental problem that no government could fix in decades. The country couldn’t produce enough exports to counter its whooping imports.
Often referred to as an agrarian economy, Pakistan’s exports currently stand at a meager $25bn in comparison to its hefty $40bn import bill, with 79% exports explicitly or implicitly depending on agriculture. Though our agriculture sector is mired with several challenges, problems within our industrial sector are even more acute, which is evident from its sparse (20.8%) contribution to the country’s GDP. Pakistan’s main drivers of industrial decline included myopic mindset in some quarters of the government, cumbersome tax laws, difficulties in doing business alongside lack of use of technology, scant skilled individuals and experts, and lack of know-how of modern industrial practices.
4th industrial revolution or commonly known as Industry 4.0
At a time when the world is witnessing the fourth industrial revolution or commonly known as Industry 4.0, it’s high time that Pakistan’s industrial sector also imbibe some important lessons from it, and once and for all bring an end to country’s deep-rooted economic problems. Though Pakistan’s industrial sector may be wandering somewhere in the second or third revolution, the fourth industrial revolution might just be the moment for them to placate their problems and boost the country’s dwindling exports. How Pakistan ride and respond to Industry 4.0 will determine her future economic fortune.
The fourth industrial revolution is hinged on the use of digital technologies to make manufacturing more agile, flexible and responsive to customers. While Industry 3.0 focused on the automation of single machines and processes, Industry 4.0 focuses on the end-to-end digitization of all physical assets and integration into digital ecosystems with value chain Partners. Industry 4.0 is based on the technological concepts of cyber-physical systems, cloud computing, Big data technologies, the Internet of Things and the Internet of Services, which facilitates the vision what has been called the “Smart Factory”.
With almost little to no industrial base, the fourth industrial revolution can prove a blessing in disguise for underdeveloped countries. Pakistan, like many underdeveloped countries, has a unique advantage over developed countries that it isn’t weighed down by infrastructure and other legacy issues and face comparatively little resistance when embracing disruptive technologies. With CPEC around the corner, Pakistan can stride for setting up smart factories in its special economic zones and can leapfrog its way to the front of the line by adopting industry 4.0 practices.
Indeed, a nightmare scenario looms on the horizon; the longer Pakistan delay the critical task of revamping its industrial sector and adopting industry 4.0, the more extended and harsh will be the fallout. The government has to delve deeper into this vital issue and need to come up with a proactive and holistic plan with the consensus of all stakeholders to make the most out of the opportunity at our doorstep.