Ayesha Saba

The potential ability of a country to move up on the innovation scale is a critical factor that determines the long-term growth of its economy and also the ability to remain globally competitive. The handicaps that Pakistan faces with respect to its competitiveness need to be addressed to boost the total factor productivity in the country, reports WealthPK.

Muhammad Mugheez Farooq, Energy Auditor National Productivity Organization (NPO), told WealthPK, “A strong economy is characterized by productivity, quality, and innovation, which are the three pillars of competitiveness and economic growth. Undoubtedly, productivity growth is the most crucial determinant of the growth of any economy.’’

“With this approach, the NPO Pakistan is working under the umbrella of the Ministry of Industries and Production. It is registered with the Securities and Exchange Commission of Pakistan (SECP), and is working as the Liaison Office of the Asian Productivity Organization (APO), Tokyo, Japan. APO has 21 member countries (MCs) with the recent accession of Turkey. Pakistan is among the eight founder member countries of the APO.”

“We have put some real efforts to achieve the maximum with a more focused approach in which the main objective is to enhance total factor productivity (TFP) through human resource development (HRD), technology demonstration, improved practices, processes, and procedures in the country so as to support the cause of competing effectively in the local and global markets,’’ he added.

The NPO energy auditor said, “The NPO is also developing a key initiative through which the organization and its stakeholders will continue to reap benefits in years to come, which includes launching a Rs77 million productivity movement in Pakistan through the PSDP-approved project ‘Improving Competitiveness through Sustainable National Productivity (SNP)’.”

He further said, “The overall macro environment and political significance casts a significant impact on productivity and GDP growth. The level of factor productivity, or simply productivity, is one of the most important factors in determining a country's competitiveness on the international market because without it, we will not be able to compete at the global level.”

According to him, “Pakistan's slow growth rates of output can be attributed to lack of innovation, low investment, technology inefficiencies, and limited research and development thus reducing productivity and competitiveness. For achieving industrial growth, we must optimize our productivity tools, including our human resources, technology, and processes of various industrial value chains. The intended outcome is to enhance our trade with the rest of the world.’’

“There is a need for professional training and awareness that provides skilled manpower according to the requirements of the labour market in the country which contributes significantly to the growth of industries. The private sector should be encouraged to expand its involvement in skills training.”

According to a joint study recently conducted by the Planning Ministry and Pakistan Institute of Development Economics (PIDE) entitled "Sectoral Total Factor Productivity in Pakistan,” the average productivity growth in Pakistan has been 1.5% from 2010-2020, which is not enough if Pakistan wants to achieve the GDP growth of over 7-8 percent on a sustainable basis. According to the study, high-productivity growth sectors are mostly services-based or tech-based, whereas most of the sectors that have medium to low or negative productivity growth are in manufacturing.

Credit: Independent News Pakistan-WealthPk