Smart Manufacturing in Pakistan

Pakistan’s cordial relations and strategic partner-ship with China opens various avenues of tech coopera-tion and develop-ment.

The landscape of manufactur­ing has transformed from traditional mechanical pro­cesses to a sophisticated integra­tion of information and tech­nology. Technologies now play a crucial role in the manufacturing process and global value chains. In the contemporary landscape, technology stands out as a pivotal in­frastructure requirement for national development and plays a crucial role in the economic devel­opment of a country.

The evolution of automation and digitization has given birth to In­dustry 4.0 which is transform­ing the landscape of manufactur­ing through smart manufacturing (SM) and intelligent factories. It optimizes operational efficiency, expediency in work output, refines demand forecasting, implements predictive maintenance, enhanc­es worker safety etc. Capgemini Research Institute has found that smart factories could add at least USD1.5 trillion to the global econ­omy through productivity gains, improvements in quality and mar­ket share. According to a UK multi­national professional services net­work KPMG Int. Ltd., “In today’s turbulent economy, businesses that are not digitally transformed are at a serious disadvantage.”

Modern manufacturing compa­nies face unpredictable market shifts due to global competition. One significant problem in many countries is that they struggle to keep up with new technologies due to lack of innovation. Lever­aging technologies like blockchain and AI for supply chain manage­ment can enhance transparen­cy, traceability, and efficiency of manufacturing sector. AI and ma­chine learning have extensive ap­plications in manufacturing, par­ticularly for tasks such as demand forecasting and predictive main­tenance by analyzing data. Indus­try 4.0 has become one of the key economic triggers of China’s long-term economic strategy. Produc­tion efficiency of Shanghai’s intel­ligent factories has increased by more than 50 percent on average. Around 100 of the US’s top com­panies and institutions, including Microsoft, Honeywell, Johnson & Johnson, have partnered with The Clean Energy Smart Manufactur­ing Innovation Institute (CESMII). McKinsey’s research reported that, “an effective transformation of the US manufacturing sector could boost GDP by USD275 bil­lion to USD460 billion while add­ing up to 1.5 million jobs.” China, Germany and Japan are the top three countries in smart factory adoption, followed by South Ko­rea, United States and France.

For developing countries such as Pakistan it is vital to explore new areas of investment and tap markets that can catalyze the pro­cess of economic development in the country. The emerging do­mains of Electric Vehicles (EVs) and batteries, green frontier tech­nologies, fiber optics, AI and semi­conductor chip manufacturing of­fer vast opportunities for Pakistan in the manufacturing sector. Intro­ducing smart manufacturing also means enabling an environment where advanced hi-tech based products can be locally manufac­tured in Pakistan.

Pakistan’s cordial relations and strategic partnership with China opens various avenues of tech co­operation and development. At the government level, Pakistan has expressed desire for Chinese as­sistance in the domain of emerg­ing technologies. These included EVs, batteries and semiconductor chips. This necessitates that Pak­istan should enable an investor-friendly environment with hi-tech and smart manufacturing capabil­ities, allowing an atmosphere for tech-based industry in Pakistan.

At present, there is awareness in Pakistan to adopt bold, radical and implementable policy approach­es. The Draft National AI Policy of Pakistan 2023 mentions the use of AI in manufacturing by devel­oping consumer goods specific to the global market requirements. Importantly, Foreign Direct Invest­ment (FDI) remains one of the key elements of Pakistan Vision 2025, Strategic Trade Policy Framework (STPF) 2020-2025, and Pakistan Investment Policy (PIP) 2023. PIP aims to diversify Pakistan’s FDI on a broader-range of export orient­ed sectors including investment in high-quality and technology-driv­en economy, which is not limited to textile and agriculture. It also aims for cooperation with GCC coun­tries as well as East Asia and Pacif­ic nations for partnerships.

The advancement of the man­ufacturing sector and associated policies requires collaborative ef­forts from various stakeholders. Adopting a unified approach that involves the government, indus­try, and academia is essential to encourage innovation in Pakistan. Despite improvements in the busi­ness environment, the regulatory framework still poses challenges, and issues related to government effectiveness concerning imple­mentation of relevant policies still persist. These challenges are fur­ther heightened due to institution­al complications, difficulty to keep pace with the dynamics of techno­logical transformation and regula­tory enforcement obstructions.

As Pakistan shapes its econom­ic trajectory, achieving a harmo­nious balance between policy development and collaborative im­plementation is crucial for ensuring sustainable growth and global com­petitiveness. Public-private part­nership would certainly be helpful in fast-tracking investment in IoT, Machine Learning, automation, dig­itization and blockchain technology to reap the benefits of Industry 4.0. The same model may also be used to establish an advisory committee to steer the industry toward smart manufacturing in Pakistan.

Areesha Anwer
The writer is a Research Officer at the Center for International Strategic Studies Sindh (CISSS). She has a Master’s in International Relations from the University of Karachi.

The writer is a Research Officer at the Center for International Strategic Studies Sindh.

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