Two-and-a-half centuries ago, the world witnessed its first industrial revolution that merchandised production through the power of steam. This era endured for around 150 years (1760-1900) before the initiation of the second industrial revolution (1900-1960), which introduced oil and electricity as the main source of power.

The third revolution (1960-2000) was engineered by information technology that automated manufacturing. The world has now entered the fourth phase, Industry 4.0, which is characterised by cyber-physical systems.

According to a McKinsey global survey, by 2019 4IR had become the top strategic priority for nearly 68 percent of the respondents. 70 percent said their companies were already implementing new technologies. 4IR is an extension of the Third Industrial Revolution.It expands the potential of inventions introduced earlier through four key disruptive technologies.

These technologies comprise data and computational power, like cloud technology, the internet and blockchain; analytics and intelligence, like artificial intelligence; human-machine interaction like virtual reality, augmented reality, automation and robotics; and advanced engineering like additive manufacturing, such as 3-D printing and renewable energy.

To thrive in the 4IR, manufacturing companies need to up-skill and re-skill their employees to ensure that they are equipped for digital transformation. When the skills required for their jobs change, up-skilled employees can acquire new abilities to support them in their existing roles.

A harder challenge lies in re-skilling employees, who receive new training to enable them to occupy various roles in their organisations. According to a 2018 McKinsey Global Institute analysis, not only the skill-sets of the workforce will be transformed through 4IR, but the companies which adopt 4IR technologies could expect 122 percent positive cash flow change, and a downturn of only 10 percent compared to a 23 percent downturn expected for those who fail to make such adoption.

The world is making a rapid shift to Industry 4.0. There is a dire need in Pakistan for policies and measures that can help it build a skilled workforce and prepare the youth for the labour market demands of the future.

Skill-based knowledge distribution using 4IR technologies should be prioritised so that the youth have the soft as well as technical skills required for employment in the emerging labour market. According to a State Bank of Pakistan report, only 10 percent of IT graduates are immediately employable. The rest suffer on account of their cognitive deficiencies and a lack of skills.

South Africa’s Ms Zora and India’s EdTech startup have developed AI and AR-based platforms that set up classrooms, content; and assist and train teachers. These technologies are helping students shape their personal and professional development.

According to a report by the Bureau of Emigration and Overseas Employment, more than 10 million Pakistanis are trying to leave the country so far in search of better jobs and living opportunities. Young graduates frustrated by Pakistan’s intensive job search atmosphere, inadequate earnings and lackluster training environment are obliged to seek refuge abroad.

India, Malawi and Singapore have developed AI job search tools to assist individuals in finding employment that best fit their skills. This saves time for both recruiters and candidates while helping them finding the right match. Malawi’s largest jobsite, myJobo.com, not only acts as a job search platform but also supplements labour-market surveys by analysing the trending jobs and skills.

To upgrade the skills of the already employed individuals in industry and IT sectors, government and private firms need to come up with a roadmap that ensures the development of the sectors and skill development of the workforce. Singapore’s industry transformation maps can be considered as a reference model.

ITMs have been developed for 23 industries to drive their transformation and growth. Additionally, policies and frameworks should be introduced to enhance the relevance of the industry and IT training programmes, apprenticeships and internships.

Building an innovative educational environment will be an uphill task for Pakistan as a number of concerns need to be addressed first. Pakistan has a population growth rate of 2.55 percent and is the fifth most populous country in the world.

As more children are added to the population base, the need for schools and educational funds increases. Population planning and control are indispensable for Pakistan, which has the world’s second highest number of out-of-school children and ranks 154th out of 189 countries on the Human Development Index.

Another factor that contributes to the slow development of human capital is the less than 3 percent allocation of GDP to education. Social transformations require huge investments.

Another concern in the re-skilling of labour is that poorly educated or illiterate workers are apprehensive of all automation and find training and job shifts difficult. Therefore, training programmes and workshops should be designed in a reassuring way.

In Malaysia, skill certificates are handed to workers who have no formal education but possess knowledge, skills and expertise to allow them to train and enhance their career prospects.

Countries like India, Thailand, Saudi Arabia and China are a part of World Economic Forum’s Global Lighthouse Network, attributing to the digital maturity and propagation of machine intelligence in their forward-thinking manufacturing companies. Pakistan is still under consideration by the WEF as a possible Lighthouse Country.

In order to realise this possibility, Pakistan needs to fill the structural gaps in its economy and create inclusive educational and workplace environments that enhance human capital and drive progress.

The writer is an MPhil student in economics and finance at Pakistan Institute of Development Economics, Islamabad