In the Name of Allah the Most Beneficent and the Most Merciful

1. In the Name of Allah the Most Beneficent and the Most Merciful

2. IMPORTANCE OF THE INDUSTRIAL SECTOR IN ECONOMIC DEVELOPMENT – ROLE OF CCIs, FPCCIby DR. AYUB MEHAR DIRECTOR GENERAL (R & D) FPCCI

3. Contents • Transformation of knowledge creation into economic development: Process, correlation and Modeling • Missing Links in Pakistan • Role of Trade Bodies

4. Modeling the Economic Development • Economic growth is considered as the blackest of the many black boxes in economics. However, the common ingredient for the higher growth is the innovations and new technology. • In fact, the sources of competitive strength are never constant for long. The sustainability in knowledge creating activities leads the economic development through inventions and technological advancement. America's success has been sustained because of the harmonization between academia, industrial management and macro economic policy making.

5. Innovation’s Phases

6. Share of Knowledge-based Products in Global Trade

7. Share of Knowledge-based Products in Global Trade (Cont..) • Knowledge-based technology has the largest share in world trade basket. • Scientific development is an outcome of the knowledge-creating activities in the universities. This scientific development produces innovations, inventions and technological advancements. If a country wants to achieve the higher growth targets, it will have to create the links between academic institutions, industrial units, and economic planning. • Innovation is the final output of academic research. The most important step in creating a research and innovation environment is to promote higher education and research activities in academia.

8. Transformation of Knowledge into Economic Profits • Economic growth, technological advancement, scientific development, knowledge creating activities and academic research are jointly determined factors. The academic research is ultimately transformed into economic growth. • If we want to achieve the higher growth targets, we will to develop the linkages between the academic institutions, industrial units and economic planning. • The dependency of economic development on academic research, innovations and technological advancement has multi dimensional linkages and inter-dependency between the availability of fiscal resources and accelerated marketable technological advancement.

9. Transformation of Knowledge into Economic Profits (Cont..) • Average return on successful innovations was 56 % as compared to the 7 % average return on normal business activities all over the world during the last 30 years. (Ref: Stanford University) • The creation and utilization of knowledge is the key element to promote the technological advancement and as well economic development. • First, the ideas are submitted in the universities, where scientists, researchers, or economists test and verify the originality and usefulness of those ideas. Out of 300 submitted ideas, one hundred are converted only into small projects at the research institutes of the universities and only eight ideas are reached at the stage of large projects. The industrialists and large business organizations provide funds for research for those projects to get the research outcomes for commercialization. • (Ref: Economic Intelligence Unit, London)

10. From Ideas to Marketing

11. Economic Development and Knowledge Based Activities

12. Final Equation of the Knowledge Based-Growth Model • To accelerate the economic growth and to develop the meaningful relations with the industry, university faculties have to find the new technologies. They have to create new ideas; they have to formulate new theories and procedures. All of those are the parts and elements of the knowledge creating activities.

13. Pakistan was one the 162 countries which contributed less than 2 percent of the research papers in total (0.08 percent). Japan was in the fourth rank and India was 22nd. The deterioration in economics and technology is a natural consequence of this phenomenon. Missing Links in Pakistani Scenario

14. Pakistan’s Competitiveness in the World (Ranking)

15. Academia in Pakistan has failed to develop linkages with the industry and there is no sign of creativity of knowledge to develop the industrial and trade activities.One can find at least threemissing links in the system of higher education in Pakistan: 1. First missing link can be observed between the strategy for promotion of research culture and the curriculum. The policy for the development of academic research and the system of examinations work in opposite directions. The system emphasizes the memorization of texts and mechanical use of the concepts and formulas. This problem was created because of the stereotype lectures and the extensive use of the study guides and short notes.

16. Cont.. • The second missing link is the disconnection of research degrees with knowledge creation. The system checks only the ritual requirements. It cannot verify the objectivity, originality and acceptability of research work. Such degrees will increase the number of PhD degree holders only. They cannot create knowledge for economic development. • Third missing link is between the academic research and economic development. To convert the knowledge into economic development, universities lead (do not follow) the industry. It is a notable difference between the role of higher education and vocational education that higher education institutions lead the industries because they work for future. They innovate, invent and develop the new products, process and systems with the help of new ideas and knowledge advancement. While, vocational education supplies the workers and qualified professionals for the existing system.

17. Role of Trade Bodies, FPCCI • The industry in Pakistan has always been contributing in the promotion of higher education by granting funds, development of infrastructure, set up of new academic institutions, providing scholarships and creation of employment opportunities. • During the recent years the responsibility of economic development has largely been shifted to corporate sector from the governmental agencies. In the age of globalization the role of trade bodies become more important. The distribution of resources, level of poverty in a region, socio-economic status and the participation of the people in the social and economic development activities are depend on the economic structure and system of the country. The flow of investment, mobility of labor and capital, patterns of business financing and strength of business institutions determine the fortune of the society.

18. Role of Trade Bodies, FPCCI (Cont..) • Now, trade bodies will have to play important and non-traditional role. They will be major catalyst of the economic development. They will not only contribute in the employment generating activities, participation in national revenues, building of foreign exchange reserves and the addition in the Gross Domestic Product (GDP), they will also become the part of economic planning and decision making. For this purpose they will have to enhance the research activities. • The FPCCI is currently restructuring and enhancing its research activities. Several type of research work including applied and policy research in the areas of business competitiveness, fiscal and monetary policies, and the globalization related issues are being carried out in the research department.

19. Role of Trade Bodies, FPCCI (Cont..) • The federation research department is planning to launch indexes to measure the quality of life in the country and to measure the business performance. • To construct a macro model to study the patterns of industrial and trade development is also in consideration at FPCCI. • The federation is in a process to establish links with the institutions of higher education.

20. Role of Trade Bodies, FPCCI (Cont..) • Two research projects were assigned to the Applied Economics Research Center, University of Karachi for the study on the Industrial Competitiveness and Protection in Free Trade Regime. • We are reactivating the FPCCI standing committee on Higher Education. • Our R & D cell is launching a research journal in collaboration with the academic institutions. • “Let us develop a knowledge-based economy’ is the FPCCI’ slogan for the year. This slogan describes the approach and vision of the present custodian of the apex body.

21. Selected Indicators to Measure the Contribution in the Development of Knowledge-based Economy • Expenditure on R & D for the year (Rs) • Exports of High Tech Products for the year ($) • Royalties received for the year (Rs) • Applied for new patents/ trade marks during the year • Number of Scientists and engineers serving full time

22. Cont.. • Expenditures on information technology and communication • Projects assigned to research institutions for primary/ applied research • No. of employees participated in industry related international conferences • Investment for modernization of machinery, laboratories, and equipment • Number of national and international collaborations for research

23. Conclusion • To develop the meaningful relations with the industry and to accelerate the economic growth, we should collaborate in several ways including industrial sector representation in curriculum development, identification of research projects, joint seminars and conferences etc. All those activities indicate that the FPCCI feels its responsibility in the social and economic development of the country. Inshallah, the FPCCI with the help of academia will be in a position to revolutionize the economic development of Pakistan.

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