The role of ICT for sustained economic growth and job creation is crucial to improve Pakistan’s competitiveness

Pakistan lost 3 ranks on the World Economic Forum’s Network Readiness Index (NRI), securing 105th position among 144 countries on the Global Information Technology Report 2013.

Despite efforts in the past decade to improve information and communications technologies (ICT) infrastructure in developing economies, there remains a new digital divide in how countries harness ICT to deliver competitiveness and well-being, according to the 12th edition of The Global Information Technology Report, released today by the World Economic Forum.

Published under the theme, Growth and Jobs in a Hyperconnected World, the Report suggests that national policies in some developing economies are failing to translate ICT investment into tangible benefits in terms of competitiveness, development and employment. This is in addition to the profound digital divide that already exists between advanced and developing economies in access to digital infrastructure and content.

Pakistan continues to lag behind in the rankings. Unable to achieve a sustained rapid economic growth may put Pakistan’s ICT-competitiveness in jeopardy unless the right investments are made in ICT, skills and innovation.

Amir Jahangir, Chief Executive Officer of Mishal Pakistan, a partner institute of Global Competitiveness & Benchmarking Network of the World Economic Forum said, “As other countries are improving rapidly, Pakistan has shown little change, this is a matter of concern. Pakistan is 37 ranks behind India. The big challenge for the next government in Pakistan would be to put more emphasize on ICT environment and regulatory framework. The role of ICT for sustained economic growth and job creation is crucial to improve Pakistan’s competitiveness". "ICT has revolutionized the way businesses are done and the country has not being able to capitalize on this”, he further added.

Pakistan's Score on the Global Information Technology Report 2013

Some of the areas where Pakistan lost its ICT competitiveness are; govt’s procurement of advance technologies, which ranked 109 this year as compared to 91 in 2012. Although Pakistan has improved the fixed broadband Internet tariff substantially by making Pakistan the 68^th most competitive broadband provider in the world, individuals using Internet, which depicts affordability of Internet for citizens is shrinking. Pakistan lost 22 points in 2013 and ranks at 120 on individuals using Internet. The report highlights that the gains in broadband affordability are being achieved by cannibalizing the individual Internet users.

Pakistan achieved significant gains in the last decades, when it embraced the mobile technologies and led the region by providing human resources capital and technical knowhow to the global pool of mobile communication providers. However this gain has been greatly diminished due to lack of advancements and inconsistency in decision making to adopt new technologies at the right time. The Importance of ICTs to govt’s vision has deteriorated from 92 to 117 in 2012 and 2013 respectively. Making ICT as one of the least priority areas for the govt. in Pakistan. 

On the economic impact pillar, Pakistan failed to show progress on creating impact of ICTs on new organizational models by losing 10 points (91). Keeping businesses in mostly traditional areas and connecting Pakistan with the global knowledge economies.

Similarly, government’s failure to create social impact through ICT also showcases it’s poor understanding of innovation ecosystem and value creation for the citizens in the digital age. 

The government failed to create value through ICT use and improving efficiency, where Pakistan lost an alarming 16 points (121 among 144 countries). Not being able to improve any regulations on venture capital availability has also created a bottleneck for an innovation economy in the country. This signifies Pakistan’s lack of correlation between innovation and competitiveness with finance, thus further isolating Pakistan from moving towards a knowledge-based economy.

Pakistan also lost 15 points on the E-participation index, where government engages citizens through online services and grievance mechanism, thus resulting in stronger red-tapism slower economic progress.

On the overall political and regulatory environment, the efficiency of legal system in challenging regulations has also deteriorated, where Pakistan is ranked 97 as compared to 79 in 2013 and 2012 respectively. Intellectual property protection has also been neglected and Pakistan lost 13 points by securing 103 on the network readiness index.

Some of the areas where Pakistan has shown improvements are on the business and innovation environment pillar, where the business sector has ensured the availability of latest technologies for ICT competitiveness by improving 10 points and securing 83 rank among 144 countries.

The Report’s Networked Readiness Index (NRI), which measures the capacity of 144 economies to leverage ICT for growth and well-being, finds Finland (1st), Singapore (2nd) and Sweden (3rd) take the top three places. The Netherlands (4th), Norway (5th), Switzerland (6th), the United Kingdom (7th), Denmark (8th), the United States (9th), and Taiwan, China (10th) complete the top 10.

“This analysis shows how matching investments in ICT with investment in skills and innovation can help economies cross a ‘magic threshold’, beyond which return on investment increases significantly,” said Bruno Lanvin, Executive Director of the e-Lab at INSEAD and co-editor of the report. “Individual countries need to identify what separates them from reaching that threshold if they have not reached it yet in order to fulfill long- term growth, competitiveness and innovation targets” he added.

“ICT’s role in supporting economic growth and the creation of high-quality jobs has never come under such scrutiny. Despite initial concerns that ICT would hasten the deployment of resources towards developing countries, the benefits of ICT are now widely recognized as an important way for companies and economies to optimize productivity, free up resources and boost innovation and job creation” said Beñat Bilbao-Osorio, Economist, Global Competitiveness and Benchmarking Network, World Economic Forum, and co-editor of the report.

Against this backdrop, “countries need tools to measure and track progress and the report has become the most comprehensive and respected international assessment, providing policy-makers, business leaders and civil society at large with a useful tool for designing national strategies for increased networked readiness and for benchmarking their country’s performance against other relevant comparators” said Soumitra Dutta, Anne and Elmer Lindseth Dean at the Samuel Curtis Johnson Graduate School of Management at Cornell University and co-editor of the report.

“Digitization created 6 million jobs and added US$ 193 billion to the global economy in 2011. Although in aggregate positive, the impact of digitization is not uniform across sectors and economies – it creates and destroys jobs” said Bahjat El-Darwiche, Partner, Booz & Company and sponsor of the Report. He added that “policymakers wishing to accentuate the positive impact of digitization need to understand these different effects if they wish act as digital market makers in their economies.”

“This report demonstrates that economies that fail to implement comprehensive national broadband strategies risk losing ground in global competitiveness and may fall behind in the delivery of societal benefits from ICTs. Plans that incorporate both supply and demand-side measures offer countries the best opportunity to advance broadband adoption," said Dr. Robert Pepper, Vice President for Global Technology Policy, Cisco and sponsor of the report. "

The Network Readiness Index (NRI) uses a combination of data from publicly available sources and the results of the Executive Opinion Survey, a comprehensive annual survey conducted by the Forum in collaboration with partner institutes. This Survey of more than 15,000 executives provides insight into areas critical for networked readiness.

The World Economic Forum is an independent international organization committed to improving the state of the world by engaging business, political, academic and other leaders of society to shape global, regional and industry agendas.

Incorporated as a not-for-profit foundation in 1971 and headquartered in Geneva, Switzerland, the Forum is tied to no political, partisan or national interests.