The World Development Report 2019 recently shared at World Bank’s annual meeting with International Monetary Fund (IMF) in Bali suggests that the investment in human capital is fundamental for sustained economic growth. This report calls on countries to focus more on future outcomes for children or risk hundreds of thousands of young people without adequate skills. Pakistan is ranked lower than the average for its region and income group. This report is not different from abysmally poor ranking on World Economic Forum’s Global Human Capital Report 2017 where Pakistan ranked 125 out of 130 countries. These poor rankings are the result of our continual neglect of education, employment and skill development.
Unfortunately, the paradigm transformation from ‘physical’ to ‘people’ in terms of prioritization had not gotten enough traction in past to help Pakistan get out of this situation, thus resulting in underutilization of its people’s true potential. The Human Capital Index of the World Bank for Pakistan is 0.39 (between the ranges of 0-1). It measures the productivity of the next generation of workers relative to the benchmark of complete education and full health. Thus, a child born today in Pakistan will be 39 percent as productive when he grows up as he could be if he had adequate education and healthcare. Here a child will complete only 8.8 years of schooling if enrolled at age 4; 44 percent of children are stunted and at risk of cognitive and physical disabilities. This situation is alarming in terms of productivity loss that we will incur due to skewed priorities that we have had.
The good news is that the current government has placed human capital development at the front and center of their strategic priorities by committing to provide jobs to 10 million people and increase investment in education. These are great signs of hope that we expect to help Pakistan in capitalizing on its true potential. The tone for change is set at the top; resonating in every speech of Prime Minister is the primal focus on human development. This is equally resounded and put in the priority policy pipeline by the IT Minister to use the power of IT to harness the potential of human capital. This integrated approach with top set vision can help us tract towards this mindset transformation with profound gains for the nation.
Human resource development (HRD) is the key to the growth of Pakistan, as amply vouched through numerous studies including U.S. Department of Commerce’s study which suggests that any 10% increase on HRD can result in 8.6% increase in productivity. This investment return is three times higher than the return on financial investment. This makes the investment proposition on HRD as one of the most profitable investments in terms of its potential gains.
Numerous countries have benefited from this proposition in the growth of their economy along with creating host of opportunities for job creation to the benefit of its people. The successful examples of similar economies like Korea and Malaysia are models worth emulating. Korea’s growth is strongly linked to consistent information and communication technologies’ (ICTs) HRD policies from 1997 till date with continual revisiting and aligned focus. Same is the case with Malaysia and other countries which, by placing central focus on HRD through ICTs, made their economies an emulative model for the world on the back of huge dividends for their people in the shape of enormous job opportunities.
A study of ‘Boston Consulting Group’ states that over a period of ten years from 2006-2016, world’s GDP grew at an average annual rate of 2.7%, while the global employment grew by only 1.3%. This huge gap is attributed partly to low emphasis on HRD which resulted in ‘skills mismatches’ and ultimately, low employment rates. One of the examples in this regard is India whose employment generation rate is over 1% compared to its economic growth of over 7%. For this burgeoning gap between growth and employment, the elephant in the room is low priority on human development – skills mismatch is attributed as the principle reason for this gap.
On the domestic front, we see that despite the fact that Pakistan’s services’ sector share grew from 54% to 58% from 2006 till 2016 in main economic equation, the employment share dropped down to 34% from 38%. This is a fundamental challenge to our jobs’ landscape making us less competitive, derailing our potential to capitalize on natural talent which could be of great use if honed skilfully.
Besides, we have to be mindful of the fact that the new model of job creation and skill development has taken a fundamental transformation from the traditional ways and sectors to new paradigms of learning and sectoral growth. The traditional models of growth are no longer relevant and are being replaced by the new models of growth. The case in point is of China’s dwindling share of exports in GDP from 37% in 2006 to less than 20% in 2016 which is estimated to take a further downward dive to 11% in coming years. This shifting trend is quite universal as evident in other countries economic model too. Another case in point is of California’s economic model where only one state’s economy surpasses that of the UK. The key factor behind this growth is the power of people in the shape of knowledge economy.
This implies that the traditional sectors and structures will no longer serve the big economic purpose of growth and job creation. For this reason, remodelling of existing streams and a gradual shift to new realms of growth and platforms are to be evolved to stay relevant. Modern realms of job creation and learning are reshaping the economic and job landscape. The word “digital” is the key lever to the equation of this new transformative model which gravitates around a wholly new landscape, one which is more productive, efficient and aligned with the available talent here in Pakistan.
ICTs being the fastest growing sector of Pakistan, having double digit growth rate, and on the back of budding population of technology professionals are positioned firmly as a central lever of economic growth and job creation. Aligned with current government’s strong emphasis on creating an enabling environment for the creation of jobs, this sector posits enormous potential to realize this vision, given its high impact outcomes in this regard which are duly proven in other parts of the world.
Strategic prioritization on new models and platforms is central to new policy focus. Arguably, HRD had always been accorded low priority on strategy table resulting in placement of a heavy lid on our potential for real progress which this country deserves due to its innate human talent. Contrarily, the countries which placed central focus on HRD have ridden the wave of modern growth more fittingly to the benefit of their people – like Korea and Malaysia, the examples from similar growth structure that we have had in past.
With the onset of present government, a renewed focus is voiced on HRD which truly requires a strategic move to help Pakistan ride the wave of Fourth Industrial Revolution.
In the wake of globalization, more resources and attention are required to promote digitally enabled services, nurturing local expertise, enabling SMEs to participate in global value chains (GVCs), digitally empowering the self-employed and boosting the personal consumption, as these are the pillars of modern job creation. Inarguably, these modern levers of job growth necessitate more structured and integrated “policy direction and strategic framework” to develop the “ICT centric human resource development”.
Mindset transformation from ‘physical” to ‘people’ is imperative to be championed by all stakeholders with the government leading the charge. We have to be mindful of the reality that people are the real power who can make or break nations. This realization is gaining great ground in the current structure. This is highly remarkable as it will set the pace of growth for Pakistan. We see that this focus is going to translate into action in the shape of numerous policy initiatives announced by the current government, much like the remarkable work being carried out under Dr. Ishrat’s task force.
As the new model of job creation centres around ICTs, formulation of “national ICT HRD policy” is critical to set off the strategic direction, to use the power of ICTs for the development of human capital to transform our country into a knowledge economy.
Pakistan’s human talent is profoundly great. I have personally witnessed the level of energy and passion imbibed with great love for Pakistan from ‘ICTs for Girls’ – a women empowerment program under the auspices of MOIT, and ‘Love for Pakistan – Youth Engagement Sessions’ which I carry out personally. This opportunity can become a liability if we do not heed its urgency. Now is the time to urge all stakeholders to wake up to this reality and work in concert to develop the people of Pakistan in response to the education and skills’ emergency we are facing. We have great potential together so together let us build a great future for Pakistan.
The writer is a member of HRD at the Ministry of IT, Government of Pakistan.
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