A conference of all SME stakeholders should be held to find a way forward.
eveloping strong industry-academia linkages could play an important role in improving the economic performance of micro, small and medium enterprises (MSMEs) in Pakistan. All provinces, Khyber Pakhtunkhwa, in particular, are till following a primitive model of doing business that lacks the required knowledge and research.
The idea of national economic development through SME development is incomplete without industry-academia linkage. The importance of micro-business enterprises is pivotal. These are the backbone of the economy.
About 3.2 million SMEs are currently operating in Pakistan. The exports of light engineering and high-tech industries are highly dependent on the contributions and performance of MSMEs. SMEs account for almost 90 percent of the private sector enterprises. Their contribution is about 40 percent of the GDP. They are also the biggest source of employment generation in the country. In the current scenario, micro–, small- and medium-sized enterprises are generating 80 percent of new jobs.
There always has been a lack of enthusiasm and collaboration between the business community, particularly the SMEs, and the academia. The training imparted by TEVTAs and other institutes is often below the global standards and fails to meet the future needs of the industry.
The curricula taught in our academic institutions are quite rigid. These are not modified to suit the needs of different career paths and major disciplines. Likewise, there is little focus on applied research. This is the reason behind the lack of innovation and creativity. Most students are unaware of the facilities and opportunities in the industrial sector.
Federal Minister for Planning Development and Special Initiatives, Ahsan Iqbal, has recently directed the Higher Education Commission (HEC) to develop a compulsory course on entrepreneurship and export marketing for university students. This is a welcome announcement. The question is: will the industry be consulted on curriculum development?
Many of Pakistan’s products do not follow and uphold international standards. This undermines the image and credibility of Pakistani enterprises in the international markets. Besides, the market competitiveness of Pakistani products, graduates, entrepreneurs, and SMEs gets compromised due to this fact.
It is easy to pay more attention to large-scale manufacturing. But their development and performance is linked to the efforts and contributions of small and medium enterprises. They are the main contributors of rough and semi-finished products to large-scale manufacturing enterprises. Every manufacturing unit is currently looking for production efficiency.
Industry-based research by the academia can help SMEs generate effective production with more efficient use of technologies. Case studies of China, India and Bangladesh can act as a beacon for providing the missing pieces and promoting cottage and medium-sized industries. Academic institutions had helped exporters in these countries solve their management and allocation of resources problems and in development of policy frameworks. Their contributions to the success stories have led to the creation of wealth and an increase in GDP growth.
Universities and academic institutions are taking it very seriously. Their contributions to the industrial research and development will light up the way forward for vibrant trade organisations.
The focus of academic institutions should be on supporting researchers by providing them guidance and opportunities to work with the industries. The MSMEs should always be a priority because they have the highest potential for growth and development.
The Office of Research, Innovation and Commercialisation (ORIC) are operating in the same capacities and making efforts to generate links for their researchers to work with the relevant industries to resolve issues related to products and operations. The ORIC is also helping startups and small enterprises by supporting innovative and creative ideas.
Now startups are long-going businesses and are equipped with AI, bio-tech, cyber security, and hyperlink connectivity. These startups are the building blocks of the knowledge economy.
Because there are always new thoughts, a strong link between academia and industry helps young researchers and students learn the way to think innovatively. How does one implement innovative ideas? How does one invest in the workforce?
Innovation doesn’t take place in a vacuum. Startups need an ecosystem that requires finance, a skilled workforce, a working attitude, a large domestic market, consumer service networks, massive feedback, risk-taking capability, legal structures and incentives to support startups.
The government can play an important role. Ideas need an appropriate eco-system to deliver results. The businesses need the capability to use AI, cyber security, robotic technologies and the latest techniques to work on sustainable development projects. Incubation centres can support startups and value chains.
Developing economies like Pakistan need to consider economic reforms and to work on sustainable development policies. The reforms should help the economy generate more production with efficient use of resources and in value addition to exports.
In the context of the current economic downturn, if we focus on industrial research in national universities and academic institutions using the resources of the current system and succeed in creating an environment for economic growth that is sustainable, the result will be a new industrialisation. This will enable the economy to increase its share in the global market and help the government accumulate the foreign exchange required for growth.
Economic growth can alleviate poverty and facilitate access to wealth at the grassroots level. It may require a national dialogue on the sustainability of economic order and the political system.
For the development of economy through small and medium enterprises practical steps must be taken to form partnership between the academia and industries. The dream of economic sustainability will not come true without full participation from these stakeholders.
It is proposed that a conference of all SME stakeholders from academia, industry and policymakers should be held to find a way forward in this regard.
Abdullah Khalid is a researcher associated with the Centre for Private Sector Engagement
Muhammad Salman Khan is a member of from Swabi Chamber of Commerce & Industry, KP