Islamabad: LUMS Technology for People Initiative (TPI) Director Usman Khan has said that despite the global focus on digitalisation and services, manufacturing remains a central driver of economic growth, employment generation and export competitiveness.
Khan was delivering keynote speech at a seminar on “Industrial competitiveness in Pakistan” organised here by Pakistan Institute of Development Economics (PIDE). He observed that Pakistan, once ahead of countries such as Vietnam, Bangladesh, India and South Korea in GDP, per capita income and exports, gradually lost its economic edge.
Over the past several decades, the industrial sector stagnated, and labour shifted directly from agriculture to low-productivity informal services instead of transitioning through manufacturing, a phenomenon he described as premature deindustrialisation, adversely affecting youth employment, export diversification and long-term productivity.
He noted that Pakistan’s export basket remains narrow and heavily dependent on low-value-added products, particularly textiles and primary commodities, with limited diversification into advanced sectors like electronics and machinery. He stressed that modern exports are increasingly driven by capabilities and innovation rather than products alone, making human capital development and technical skills critical for competitiveness.
He also highlighted lessons from global experience, emphasising the strategic use of tariffs, foreign direct investment, state-owned enterprises and public-private dialogue to create globally competitive firms, foster innovation and drive export growth.
