Missing successful disruptions

LAHORE: Business culture in Pakistan has not kept pace with the disruptions caused by innovation, technology and research in the 21st century. Our share in global exports is constantly shrinking while foreigners are capturing our markets.

Research is generally considered wastage of money by our businessmen. They are shy to upgrade technology because they mostly operate in a protected captive domestic market.

They are happy on small innovations called “juggads” to keep their outdated machines operative instead of bringing in new technology.

It is time for them to wake-up as the world is changing rapidly due to inventions, advancement in technologies and innovations. Mankind has constantly been striving for progress.

There were more inventions in the 20th century than in the previous 50,000 years of human history. These inventions however turn pale in front of the changes that have been made in the first two decades of the current century.

Disruptive technologies uprooted the most established companies while making the successful disrupter a billionaire in no time.

Only the most adaptable companies survive and others operating on redundant business models perish. The most successful ones not only adapt to the change but are also drivers of change.

They act faster than the competitors. Kodak, which was among the top 20 global companies in 1980, has vanished after failing to adapt to changes that started in late 90s.

Motorola, the leading mobile phone company in 1990 was late in adapting to analogue technology and was replaced by Nokia, which in fact was basically a rubber boots company. It retained its number one position for ten years. Then it was challenged by the iPhone which is still the leader but is under severe threat from Samsung and other Android phone manufacturers.

Historically, the nations that failed to innovate and research lost their global dominance to more enterprising countries. In 1820 China and India commanded 50 percent of the global economy, while the share of the United States was only 2 percent.

In 1980, the share of China and India dropped to less than 10 percent, while the share of the United State increased to 40 percent (China and India are slowly reclaiming their share by adapting to the innovative changes).

Before the industrial revolution, land labour and capital determined the size of the economy. In the 1820 industrial revolution, the productivity gains went from human beings to machines.

World trade is now increasingly being conducted through e-commerce.

In 2020 emerging markets increased their share in global GDP to around 60 percent. Around 50 percent of mankind lives in cities.

Pakistan and Bangladesh were part of India in 1820 when it was one of the two top global trading nations.

India and Bangladesh are slowly regaining their positions, but Pakistan has performed worse in the 21st century than its performance in the 20th century. Value-added products are 50 percent of our exports. Commodity exports still account for over 10 percent of our exports.

People of Pakistan are energetic, hardworking and when empowered with knowledge are globally best professionals. Our human resource is our biggest strength.

We hear numerous success stories of Pakistani IT professionals, doctors, engineers and bankers operating in foreign countries.

They are part of us, but they excelled in societies that imparted them with knowledge, skills and civic responsibilities. We should try to create the same atmosphere in Pakistan.

The nation has proved its resilience time and again after devastations caused by floods or earthquakes. After the 2005 earthquake, we saw a devastated Azad Kashmir, but the next year life was as usual and most of the homes were reconstructed.

Flood-affected people all over Pakistan recoup and work more vigorously to make up for the losses. This spirit of the Pakistani nation gives hope of a bright future for the country.

Our top entrepreneurs should share their successful experiences with the youngsters to inspire them in their respective jobs. It is regrettable that educated youth in Pakistan invariably want to do an office job. They do not want to do other productive jobs because the entrenched moneyed class has discouraged entrepreneurship. They have formed cartels that operate without competition.

Disruptive innovations are rare in Pakistan. Our innovators have to look outside to seek finance for their innovative ventures.

It is heartening that a Pakistani start-up has recently succeeded in securing $86 million finance from abroad –the highest ever secured by any Pakistani start up. It would have been ideal had the same been provided by the top entrepreneurs of the country.

Another disturbing trend in Pakistan is that the family elders do not want to hand over the control to youngsters.

No family business has progressed beyond the first generation if the youngsters of the family are not handed control on the right time.

The youngsters in rich families are mostly highly educated and foreign qualified, but when they work under the strict shadow of their elders, they lose the innovative spirit by the time they get the control mostly after the death or disability of their elders.