Industry-Academia Linkage for MSME Development | Political economics

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Developing strong links between industry and academia could play an important role in improving the economic performance of micro, small and medium enterprises (MSMEs) in Pakistan. All the provinces, Khyber Pakhtunkhwa in particular, so far follow a primitive model of doing business which lacks the required knowledge and research.

The idea of ​​national economic development through SME development is incomplete without the link between industry and academia. The importance of micro-enterprises is essential. These are the pillars of the economy.

About 3.2 million SMEs are currently operating in Pakistan. Exports of light engineering and high-tech industries are highly dependent on the contributions and performance of MSMEs. SMEs represent nearly 90% of private sector enterprises. Their contribution is about 40 percent of GDP. They are also the biggest source of job creation in the country. In the current scenario, micro, small and medium enterprises generate 80% of new jobs.

There has always been a lack of enthusiasm and collaboration between the business community, especially SMEs, and academia. The training provided by TEVTAs and other institutes is often below global standards and does not meet the future needs of the industry.

The curricula taught in our academic institutions are quite rigid. These are not modified to meet the needs of different career paths and major disciplines. Similarly, there is little emphasis on applied research. This is the reason for the lack of innovation and creativity. Most students are unfamiliar with the facilities and opportunities in the industrial sector.

Federal Minister of Planning, Development and Special Initiatives, Ahsan Iqbal, recently asked the Higher Education Commission (HEC) to develop a compulsory course on entrepreneurship and export marketing for students academics. This is a welcome announcement. The question is, will industry be consulted on curriculum development?

Many Pakistani products do not meet or meet international standards. This damages the image and credibility of Pakistani companies in international markets. Furthermore, the market competitiveness of Pakistani products, graduates, entrepreneurs and SMEs is compromised as a result.

It is easy to pay more attention to large-scale manufacturing. But their development and performance are linked to the efforts and contributions of small and medium-sized enterprises. They are the main suppliers of raw and semi-finished products to large manufacturing companies. Each manufacturing unit is currently pursuing production efficiency.

Industrial research conducted by academia can help SMEs generate efficient production through more efficient use of technology. The case studies of China, India and Bangladesh can serve as a beacon to provide the missing pieces and promote cottage and medium-sized industries. Academic institutions had helped exporters in those countries to solve their resource management and allocation problems and to develop frameworks for action. Their contributions to successes have led to wealth creation and increased GDP growth.

Universities and academic institutions take this very seriously. Their contributions to industrial research and development will illuminate the way forward for vibrant business organizations.

Academic institutions should focus on supporting researchers by providing guidance and opportunities to work with industry. MSMEs should always be a priority as they have the greatest potential for growth and development.

The Office of Research, Innovation and Commercialization (ORIC) operates in the same capacity and strives to create links that enable its researchers to work with relevant industries to solve product and operations. ORIC also helps startups and small businesses by supporting innovative and creative ideas.

Now, startups are long-lived companies and are equipped with AI, biotech, cybersecurity, and hyperlink connectivity. These startups are the cornerstones of the knowledge economy.

Because there are always new ideas, a strong link between academia and industry helps young researchers and students learn to think innovatively. How do we implement innovative ideas? How to invest in the workforce?

Innovation does not happen in a vacuum. Startups need an ecosystem that requires finance, skilled workforce, work attitude, large internal market, consumer service networks, massive feedback, decision-making ability. risk, legal structures and incentives to support startups.

Government can play an important role. Ideas need an appropriate ecosystem to produce results. Businesses need the ability to use AI, cybersecurity, robotic technologies, and the latest techniques to work on sustainability projects. Incubation centers can support startups and value chains.

Developing economies like Pakistan need to consider economic reforms and work on sustainable development policies. The reforms should help the economy generate more output with efficient use of resources and value addition to exports.

In the context of the current economic downturn, if we focus on industrial research in national universities and academic institutions using the resources of the current system and succeed in creating an environment of sustainable economic growth, the result will be new industrialization. This will allow the economy to increase its share of the global market and help the government accumulate the foreign exchange necessary for growth.

Economic growth can alleviate poverty and facilitate access to wealth at the local level. This may require a national dialogue on the sustainability of the economic order and political system.

For the development of the economy through small and medium enterprises, practical steps should be taken to form a partnership between universities and industries. The dream of economic sustainability will not be realized without the full participation of these stakeholders.

It is proposed that a conference of all SME stakeholders from academia, industry and policy makers be organized to find a way forward in this regard.


Abdullah Khalid is a research associate at the Center for Private Sector Engagement

Muhammad Salman Khan is a member of the Swabi Chamber of Commerce and Industry, KP


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