More than a decade ago, an economic expert in a television studio challenged me to name three things in that room invented in Pakistan. I could not name one. Nothing has changed since. The World Intellectual Property Organization's Global Innovation Index 2025 ranks Pakistan 99th among 139 economies. On innovation inputs, Pakistan ranks 124th, near the bottom. No Pakistani cluster makes the top 100 innovation hubs. The country counts 480 patent applications filed domestically, fewer than two per million people, against nearly 51,000 trademark filings, 26th in the world. South Korea files over 7,000 patent applications per hundred billion dollars of output; Pakistan files about 35. In a whole year, Pakistan filed two international patent applications.
Television Economic Journalism is Dead
Television economic journalism is dead. What survives is scandal and budget-week boilerplate: deficit, revenue, governance, circular debt. No deep dive, no soul searching. Every time the government signs a free or preferential trade agreement, one question arises: what are we going to export? Pakistan sells raw and half-made goods with little value added. The export market is a buyer's market. Without a real edge, you lose your place fast. Ask businesses about falling exports, and they blame the usual suspects: cost of power, land, inputs. Ask what they spend on research and development, and most go mute.
R&D Spending: A Stark Comparison
In 2023, the last year with full comparable data, Israel spent 6.35% of its GDP on research and development, South Korea just under 5%, the United States 3.45%, Germany 3.14%, China 2.58%. The world averaged about 2.6%. India hovered near 0.64%. Pakistan spent 0.16% — one sixth of one per cent. Why so little? Because the elite is extractive and rent-seeking, a child of the colonial estate. It captures the state to reward standing still. Windfalls come from government concessions: subsidies, statutory orders, cheap credit, protected markets. It does not need to invent because it does not need to compete. An innovation ecosystem would breed a new class owing nothing to land, licence or lineage, so its absence suits the status quo.
Structural Bottlenecks: Money, Law, and Geography
The bottlenecks are structural, beginning with money. In the mid-2000s, when the state's hunger for borrowing eased, consumer finance jumped from 9% of bank lending to 14% in three years. In December 2024, pushed by a tax penalty to lend, banks shoved a record Rs1.467 trillion into non-bank financial firms, more than they lent the whole private sector — a paper shuffle to dodge the taxman. In the current easing cycle, the central bank names the leading borrowers: textiles, telecoms, wholesale and retail trade. The system funds buying and selling, never making new things. Risk money has dried up: startup funding fell from $355 million in 2022 to $43 million in 2024; India drew $7.5 billion the same year. Many of Pakistan's best young firms now register in Dubai or Delaware to find money, stable banking and legal cover. The share of computer science graduates staying in Pakistan has fallen from 73% in 2020 to 41% in 2024.
The law does no better. Pakistan still has no working bankruptcy regime, so failure means ruin, not a second start. The government only formed a committee last year to mend the Corporate Rehabilitation Act. Foreign investors report long delays in taking profits home, and money that cannot leave freely never arrives. The patent office takes three years to grant a patent. As a writer of three decades, I still cannot tell you how to register the copyright of my own words. The map is no kinder: of 262 universities, Islamabad alone has about 20, Balochistan about ten, Gilgit-Baltistan three. A bright child from Turbat or Chilas must leave home to learn, and too many subjects on offer have nothing to do with innovation.
Together these blocks ensure that billions poured in by superpowers — American aid yesterday, Chinese investment today — buy only a short-lived rise in consumption and no lasting gain. When new wealth rises on its own, the gates stay shut. Shortly after the 2013 elections, at a PILDAT briefing, Dr Ijaz Shafi Gilani of Gallup showed a new moneyed class forming in Punjab and urban Sindh, and warned that the old parties had no room for it in their second tier. Nobody reformed, and the PTI's rise became a self-fulfilling prophecy. My quarrel is not with any party's top leadership — those are personality cults and beyond argument — but with the recycled second tier beneath them. Even local government, the one vent through which fresh blood could rise, stays shut.
The New Class: Trading, Not Inventing
The twist is that this new class made its money in trading and retail. So we have an old elite that blocks, a new one that trades, and no inventing class at all. The aim, then, is not to reform the old elite but to breed a rival one — a competitive class whose rise forces the old guard out of its complacency. CPEC 2.0 and the coming agreements with Saudi Arabia and the Gulf are the tools. Stop begging for loans and start bargaining for skills. Send young engineers, picked for talent and not for their fathers, into Chinese factories, then bring them home as partners in joint ventures with foreign firms. Factories on build-operate-transfer terms work just as well. Put universities and research parks beside ports and border crossings. Security will be cited as the excuse; fine, if new cantonments must be built, build them to guard these campuses, and for now subsidise education, food, travel and foreign faculty. Fix the patent office before building another motorway.
The Window is Five to Ten Years
The window is five to ten years, and India shows why. Its offshored back offices, which fed an industry of some six million jobs, have begun to shrink as automation eats routine work. Tata Consultancy Services alone cut about 12,000 jobs in 2025, and new investment in the sector goes to machines, not people. When the same wave reaches Pakistan's textiles and call centres, the question asked in that studio will not be a challenge. It will be an epitaph.
