A misleading approach to creating a knowledge-based economy

In its millennium edition, The Economist, London, had proudly mentioned that the West had made a great contribution to humanity through its advancements in education and health services.

The contributions of the Western world in education, health, science, technology, economics, politics, and military power are the offshoots of intellectual development in their universities. The power of their corporate sector derives from technological advancements, financial strategies, marketing expertise, and business management, which have created an unmatched demand for their goods and services.

The visualisation, planning, and long-term strategies in their corporate world are dominated by thinkers, intellectuals, economists, scientists, scholars, and academicians produced by their universities.

Protection of national ideology and social values, achieving political integrity, bringing desirable changes in the attitude of people, improving the level of intellectuality, reducing various kinds of social and economic disparities, scientific development, and technological advancement are included in the desirable outcomes of higher education. Economic development is also one of its important byproducts.

The world history of development shows that economic expansion is unsustainable in societies that lack the capacity for continuity in knowledge creation. The fall of great civilisations and their military power, due to a failure of continuity in knowledge-creating activities, is validated by their history. The creation of knowledge is the only root cause of continuity in economic expansion and development; all other factors provide the environment and catalysts for the development process. The universities in the Western world developed this viable model for creating and screening useful ideas for progress and advancement in a society.

According to an estimate by the “Economic Intelligence Unit”, eight out of 300 submitted ideas have arrived at the stage of large projects. The industrialists and large business organisations provide funds for further research on those selected ideas, and finally, one of those ideas ultimately succeeds in commercialisation and accelerates economic development. The extraordinary returns on investment in the successful ideas are not comparable with the normal profits.

The economic output of higher education becomes extremely important for those nations that spend taxpayers’ money on higher education despite several financial constraints. They have to justify their spending in terms of the economic outcomes. The present structure of Pakistan’s higher education was developed based on achievement in economic targets through developing a knowledge-based economy.

The Planning Commission, the Ministry of Science and Technology, and the Ministry of Education have participated in developing this structure. Numerous policy measures and incentives have been introduced to achieve the desirable goals in the first decade of the 21st century. The transformation of the University Grants Commission (UGC) into the Higher Education Commission (HEC) was the key step, which was initiated by the federal government through legislation.

The upgrading of pay scales of faculty in public sector universities, attractive benefits and salaries under the tenure track system, income tax rebates to full-time university teachers, vast spending on frequent foreign trips of the university teachers to attend seminars and conferences, launching endogenous PhD programmes under the HEC supervision, a huge number of indigenous and foreign scholarships to Pakistani students and spending on e-libraries established by the HEC for the universities are the major steps which have been taken by the HEC of Pakistan during the last three decades.

Assuring the quality of higher education by establishing “Quality Enhancement Cells (QECs)” and “Office of the Research, Innovation and Commercialisation (ORIC)” in every Pakistani university reflects the intentions and core objective of these reforms. Obviously, the ultimate objective of reforms in higher education was to commercialise the knowledge-creating activities for economic development.

The accelerated growth in gross domestic product (GDP) and higher tax revenue in consequence of the spillover effects of higher growth have been theorised in implementing this model. It was categorically mentioned in the HEC’s strategic plan 2005 that ensuring the highest academic standard and finest intellectual quality will take Pakistan among the galaxy of developed nations within a span of a few years. The idea was the creation of knowledge in universities, and then its utilisation for commercial and economic purposes by the industry.

The HEC has been claiming improvement in higher education indicators of Pakistan through the implementation of its “knowledge-based economic growth model to achieve the objective of sustainable development through a silent revolution”. Unfortunately, the achievement of this model is not reflected in the economic and social indicators like GDP growth, industrial output, export enhancement, or the production of import substitutes. Even no significant improvement was noted at the firm’s level of spending on research and development (R&D) activities.

The GDP growth rate was 7.8% in 2004 (before the implementation of HEC policies), 4.2% in 2015, 6.5% in 2022, and now it is around 3.5%. The share of manufacturing goods in merchandise exports from Pakistan shows a continuous decline and steep deterioration. This was more than 85% in 2004; now it is 68%. The share of high-tech products in total manufacturing exports from Pakistan was around 1.9% in 2008, 1.7% in 2010, 1.4% in 2022, 1.9% in 2023, and 2.4% in 2024. The spending on R&D was 0.3% of GDP in 2004, which is now 0.2% of GDP.

However, the number of research publications by Pakistani researchers increased by more than 1,300%. The number of publications in scientific journals by Pakistani authors was 1,730 in 2004 and 22,600 in 2022. Similarly, the number of researchers in R&D arrived at 474 per million people in 2022 from 73 per million in 2004. Similarly, a fast growth in patents and trademark applications by resident Pakistani was noted. The steeper growth in the share of ICT services in exports is also a desirable achievement, which was achieved at 45% in 2024 from 10% in 2004.

The inflated number of PhDs, new research journals, and the number of research articles by faculty members and students in Pakistani universities have not been transformed into economic development. If HEC’s claim about the improvement in higher education is accepted, it corroborates that there must be some missing links in the transformation of higher education into economic development.

This enhancement in the number of researchers, PhD degree holders, and publications in scientific journals without a significant economic development indicates a missing link between the system of higher education and economic activities. This link is absolutely missing and has not been properly understood. It is quite obvious that policymakers ignored the other important factors of economic development in implementing the knowledge-based growth strategy.

If universities are producing research in the right direction, it must be reflected in economic and social development indicators. It was recommended by the Senate Standing Committee on Federal Education and Professional Training in 2018 that, while conducting research, especially MPhil/PhD programmes, topics related to the internal problems of Pakistan should be selected.

HEC has ratified it and advised all public and private sector universities in Pakistan to follow this recommendation. But there is no mechanism to link this research with the industry and policy-making organisations. In this state of affairs, it is hard to achieve the target of revolutionary economic development through improvement in higher education.

To convert knowledge into economic development, universities lead (do not follow) the industry. The research output of universities is used by policymakers, investors, and industrialists in new economic ventures. Contrary to this model, unfortunately, universities in Pakistan are delivering clerical and mechanical skills in the name of economic and industrial requirements. They are stepping down to a level of vocational institutes.

It is a notable difference between the role of higher education and vocational training that higher education leads the industries through proactive and leading participation in innovations, inventions, and developing new products and processes with the help of new ideas and knowledge advancement, while vocational education supplies the workers and qualified professionals to the existing system. In fact, knowledge creation for economic and social development, inventions, innovations, and startups is an inseparable part of university education. If an institution does not have the capability to perform such activities, it must be granted the status of an affiliated college of another university.

The creation, acquisition, and absorption of knowledge are three different stages that are required for a knowledge-based economy. The creation of knowledge is the core function of higher education. To accelerate economic growth and to develop meaningful relations with the industry, university faculties have to create new ideas, have to find new technologies, and formulate new theories and procedures. All of those are the parts and elements of knowledge-creating activities. Transformation and acquisition of knowledge is a subordinate activity, which is performed through the teaching process either in universities or colleges or the institutes of professional and vocational education, while the absorption of knowledge is a broad-based activity mainly covered by the industrial and commercial enterprises, socio-political administration, and generally speaking by the entire society.

The majority of research projects in Pakistani universities are funded by the HEC (public money), not directly by the industries concerned, while the idea of “Industry-academia linkage” in Pakistan was used only for marketing and image-building of educational institutions through organising seminars and conferences with industry sponsorships, students’ internships, payment of stipends, and placement of graduates in business enterprises.

The absence of a well-defined model of industry-academia linkages trapped the entire structure of higher education and led to corruption and dishonesty. Neither the research output nor university-industry linkages can be measured through a mathematical formula. The visible achievement of the objectives can only determine success.

After the implementation of the HEC model, the main purpose of getting a PhD degree and publishing articles in research journals was to get promotions and faculty positions. The purpose of research is not its usefulness in industry and the economy. It is only to fulfill the required number of publications to get promotion to a higher grade.

The fabricated research publication derailed the entire growth model and damaged the HEC efforts and policy outcomes. One can see a large jump in the number of international conferences and the number of international journals. The participants from Pakistan provide the source of funding for the mushroom growth of international conferences and academic journals. HEC has been paying the cost of travelling, accommodation, and publication fees (and even daily allowances) to the teachers and students of the universities. A huge budget of HEC was spent on the financing of thousands of foreign trips in the name of participation in seminars and conferences.

The hard-earned money of Pakistani taxpayers was grossly misused in this activity without any utility. There is no academic worth to such a conference, because stereotypical papers have always been presented in such conferences. The ultimate responsibility of paying the fee for publication in journals goes to the HEC. Such a type of artificial improvement in the number of citations and impact factor, and a growing number of publications, cannot add anything to knowledge-creating activities. However, they can divert academic efforts and the use of financial resources to a fake mechanism.

For instance, the publication of an additional 7,000 papers during the last decade costs 3.5 million dollars to Pakistan (assuming the publication fee is normally distributed with a median of 500 dollars). The cost of participation in national and international conferences paid by the HEC is much higher than the cost of publications.

What has been achieved by the HEC since 2005? What research was produced by those PhDs who have completed their PhDs based on the HEC funding? What is their contribution to technological advancement? Is the quality of PhDs after the formation of the HEC better than before the HEC? What are the criteria to measure their performance? Academic excellence, research contribution, employment in industry, improvement in rankings of Pakistani research institutions and universities, and economic development?

The question is related to the output of the HEC; it is not related to the input added by the HEC. If incremental output is not greater than incremental input, it indicates inefficiency.

The national exchequer has to incur huge financial losses because of much higher spending in the mushroom growth of non-productive activities. However, economic losses are much higher than financial losses because of the induction of fabricated and low-quality higher education in academia, the corporate sector, and the public sector of Pakistan. Those fabricated research activities show a false picture of higher education and mislead the nation.

As a result, the money that should have been invested in proper education to bring out “comprehensive minds” is spent on the training and acquisition of clerical skills. It is a misuse of national resources. This intellectual corruption has damaged the academia and economy of Pakistan and created uncertainties, ambiguities, and directionless policies. To ignore the outcome of efforts and spending on higher education and overlook the performance measures of research in Pakistani universities is a highly damaging negligence.

The financially poor nation and its taxpayers have been paying billions of rupees to those who have been receiving the facilities in the name of quality research and scholastic activities. The short-term unrest for radical reforms in the institutions of higher education or long-term deterioration in higher education and economic growth? The choice is in the hands of policymakers.