Pakistan’s current economic structure is largely dependent on agriculture, and limited industrial activity. While agriculture remains the backbone of our economy, it alone cannot meet the demands of a growing population or compete with the global economy’s fast pace.
Pakistan’s current economic structure is largely dependent on agriculture, and limited industrial activity. While agriculture remains the backbone of our economy, it alone cannot meet the demands of a growing population or compete with the global economy’s fast pace.
The countries that have successfully lifted millions out of poverty and secured long-term economic stability have done so through industrialisation. The share of the industrial sector in our GDP has shrunk from around 20 per cent of the GDP in 2017-18 to 18.2 per cent in 2023-24.
For Pakistan, the dream of an industrial revolution is not just a hopeful vision -- it is an absolute necessity for survival in today’s competitive world. The ongoing global shift towards technology, automation and advanced manufacturing means that countries that do not adapt will face the risk of being left behind. Pakistan, with its vast potential, cannot afford to remain on the sidelines.
Our country is blessed with many unique advantages that could fuel an industrial revolution if properly harnessed.
Pakistan’s location at the crossroads of South Asia, Central Asia and the Middle East presents a tremendous opportunity. We are positioned to become a key regional hub for trade and commerce, particularly with major international initiatives like the China-Pakistan Economic Corridor. CPEC opens doors to enhanced connectivity, industrial zones and increased investment. It gives Pakistan a crucial role in global supply chains if we seize the moment and develop a robust industrial infrastructure.
One of the greatest assets Pakistan has is its young, energetic population. With over 60 per cent of our population under the age of 30, we have an abundant labour force ready to be engaged in productive industries. But for this potential to be realised, it’s essential to invest in education and vocational training. We must align our workforce’s skills with the demands of modern industries -- such as manufacturing, technology and services -- so they are ready to take on the jobs of tomorrow.
Pakistan is also rich in natural resources, from coal and minerals to gas and oil reserves. These resources can serve as the foundation for key industries such as energy production, steel manufacturing and mineral extraction. However, we need to ensure these resources are efficiently managed and utilised within the country, rather than being exported in raw form.
Another area of opportunity lies in the growing field of technology. Pakistan’s emerging IT sector has already shown promise by making strides in software development and export services. By leveraging this momentum, we can integrate technology into our industrial sectors to improve productivity, enhance innovation and modernise traditional industries like textiles, agriculture and manufacturing.
Pakistan must make concerted efforts to adopt and integrate cutting-edge technologies like artificial intelligence (AI), robotics, and the Internet of Things (IoT) to boost industrial productivity and efficiency. These technologies have revolutionised industries worldwide by optimising processes, reducing costs, and enhancing product quality. In an increasingly competitive global market, Pakistan's industries must leverage automation, data analytics, and smart manufacturing to remain relevant and sustainable. Embracing these innovations will not only enhance operational efficiency but also create new opportunities for economic growth, job creation, and global competitiveness.
The government has taken some important steps towards industrial development, including the establishment of Special Economic Zones (SEZs) under CPEC, offering tax incentives and infrastructural support to businesses. These zones are designed to attract foreign direct investment (FDI) and promote industrial activity, but more needs to be done to streamline the process, attract global players and ensure local businesses can also benefit.
However, realising this dream is far from easy. Pakistan faces several structural challenges that must be addressed if we are to achieve true industrialisation. These challenges are formidable but not insurmountable.
Perhaps the biggest hurdle is our energy shortage and high prices. Without a reliable supply of affordable energy, industrial growth cannot be sustained. Power outages, high electricity costs and the lack of alternative energy sources have long affected Pakistan’s industrial sector. Solving this issue must be a top priority. There is a need for significant investment in renewable energy -- particularly solar, wind and hydroelectric power -- which will not only help industries but also make Pakistan more energy self-sufficient.
Political instability has often disrupted long-term economic planning. Industries require policy continuity, clear regulations and a stable environment to thrive. Changing governments have sometimes led to abrupt shifts in policies, causing uncertainty among investors. The government must commit to long-term, transparent policies that provide a stable foundation for industrial development.
Pakistan’s infrastructure is in dire need of modernisation. From transportation networks to industrial facilities, the current state of infrastructure limits the efficient movement of goods and services. The government must prioritise building modern roads, ports and railways to enhance logistics and connectivity, both within the country and with neighbouring nations.
While Pakistan has a large workforce, there is a mismatch between the skills available and those required by modern industries. Industries need highly skilled workers proficient in technical and technological fields, but there is a gap in our education and vocational training systems. Bridging this gap will require significant reforms in education, with a focus on science, technology, engineering and mathematics education and vocational training programs.
Bureaucratic inefficiencies and a complex regulatory framework make it difficult for businesses to operate smoothly. The cumbersome process of setting up industries, obtaining licences and dealing with excessive paperwork discourages investors. Reforms are needed to streamline regulations and create a business-friendly environment where companies can thrive.
Without a thriving industrial base, Pakistan’s economy will struggle to keep up with the demands of its growing population and the challenges of a competitive global marketplace. We face rising unemployment, increasing inflation and a widening trade deficit. Industrialisation offers the solution to these problems.
A robust industrial sector would not only generate much-needed jobs but also reduce our dependency on imports by increasing local production and exports. The benefits of industrialisation extend far beyond economic growth; they include poverty reduction, improved living standards and greater economic self-sufficiency.
A thriving industrial base will position Pakistan as a significant player in the global economy. By integrating modern technology, automation and innovation, we can enhance our productivity and improve our global competitiveness. This, in turn, will attract foreign investment and help build a sustainable economic future for Pakistan.
Achieving this industrial revolution will require collective effort. The government must lead by implementing pro-industrial policies, but the private sector, civil society and educational institutions must also play their part. Collaboration between the government and the private sector will be essential for success. Public-private partnerships can drive infrastructure development, facilitate innovation and bring modern technology into our industries.
Addressing Pakistan’s energy crisis requires bold investments in renewable energy sources. This will not only support industries but also ensure Pakistan’s energy security in the long run.
Vocational and technical training programmes should be expanded to align the workforce’s skills with the demands of modern industries. Educational institutions must work closely with industries to tailor programmes that produce skilled workers for the future.
Small and medium-sized enterprises (SMEs) are the backbone of industrial growth. Currently the share of SMEs in the private sector financing is merely 5.5 per cent while the number of SME borrowers are merely around 176,000. The government must ensure that SMEs have access to affordable financing, technical assistance and market opportunities so they can thrive and contribute to the industrial ecosystem.
As we envision an industrial revolution in Pakistan, it is also imperative to focus on women's empowerment as a key driver of economic growth. Women represent a vast and underutilised segment of the workforce, and by encouraging their active participation in industrial sectors, we can significantly enhance productivity and innovation.
Integrating women into industries, particularly in leadership roles and technical fields, not only promotes gender equality but also fosters diverse perspectives that lead to better decision-making and problem-solving. Providing women with access to education, skills training, and opportunities in the industrial landscape is essential for inclusive and sustainable growth. Empowering women in this way will strengthen Pakistan's economy and contribute to a more equitable society.
While advancing industrial growth, it is essential to recognise the increasing importance of addressing climate change. As Pakistan moves forward in its industrial revolution, it must also take proactive steps to minimise environmental impact by integrating climate-friendly policies into industrial production.
Emphasising sustainability and adopting green technologies -- such as energy-efficient machinery, renewable energy sources, and eco-friendly practices -- will not only help reduce the carbon footprint but also ensure long-term industrial viability. By prioritising environmentally responsible practices, Pakistan can foster sustainable growth, protect natural resources, and contribute positively to global efforts to combat climate change. Balancing industrial progress with environmental sustainability will position Pakistan as a forward-looking, resilient economy in the face of global climate challenges.
The writer is the senior vice president of the Lahore Chamber of Commerce and Industry.
