Linkages of industry, universities and the government: challenges and opportunities


Dr Zafar Khan Safdar

As an effective way to deepen the dynamic docking and advantage integration between market-technological entity, and socio-economic growth, the joint establishment of scientific research bases plays an important role in promoting the long-term and stable cooperation between industry, university and the government. It is proven through research studies that the joint establishment of scientific research bases is more conducive to promoting the enterprise innovation than joint research, commissioned research and technology transfer.
Pakistan’s industrial pundits, higher education, and government recognize the importance of tri-partite coordination for meeting challenges. However, linkages are frail due to protection, low innovation, rigid university structures, weak incentives, and fragmented bureaucracy. The NAB’s harassment of bureaucrats and industrialists, following misuse of authority, leads to insufficient efforts by government officials and industrialists.
The fourth industrial revolution emphasizes knowledge creation and innovation production as critical dimensions of development. The triple-helix theory, which connects universities, firms, and government policies, has been useful for over two decades. Institutional dimensions of a socio-economic system, including universities, industries, and government policies, follow complex and co-evolving development trajectories. During the recent crisis and globalization restructuring, socio-economic disciplines are shifting their focus from traditional economic geography and regional development to studying local dynamics, as this approach can synthesize individual spatial levels into a global perspective. Today, this paradigmatic change appears in the “Fourth Industrial Revolution” thematic, which has also been adopted quickly by formal international institutions such as the World Economic Forum. In a neo-Schumpeterian perception, an industrial revolution can be any radical socio-economic change that takes place and gets structurally assimilated over time.
Governments worldwide are implementing policies to boost innovation, generate new technologies, and foster advanced industries. These interventions can have both positive and negative impacts, particularly in the global economy. While they can expand knowledge and productivity, they can also distort trade and divert investment. International cooperation and rules are crucial to ensure that these policies maximize positive spill-overs and prevent technological dominance from transforming into a race for leadership.
Government is a complex realm of strategies, procedures, and techniques, involving numerous connections between authorities’ aspirations and institutions’ activities. It’s not just about implementing ideal schemes or extending control, but also involves legal, professional, architectural, administrative, financial, and judgmental forces. Policy making is a complex process involving variables, and the power to make decisions lies in mobilizing people, procedures, and resources to achieve goals.
Research suggests that governments lack the necessary knowledge to manage complex economies, are susceptible to political capture, and often solve problems due to government failures rather than market failures. In recent years, academics and policymakers have shifted their focus to letting markets decide industries’ success and allowing governments to intervene less. They argue that state institutions, such as financial systems, legal structures, and regulatory frameworks, are essential for economic success. Additionally, industrial policies have become more outward-oriented, recognizing that open markets can lead to innovation and productivity. The economic literature and experiences of many countries highlight that open markets are best served by these objectives.
Pakistan, once one of the fastest-growing developing countries, experienced a 6% annual average growth rate between 1960 and 1990. However, the country has since experienced a significant decline in growth rates, lagging behind other South Asian countries, except in 2017 when the growth rate reached to 5.8%. This decline is attributed to political instability, political disruption, policy inconsistency, and poor governance. Pakistan’s geographic location has not been utilized effectively for intra-regional trade and investment. To realize its future potential, Pakistan must position itself for integration into the regional and global economy, benefit from its youthful population, and advance technology.
Studies show that Pakistan’s successive governments have implemented structural reforms in finance, tax administration, privatization, and foreign exchange liberalization, leading to a 2-percentage point increase in total factor productivity. This suggests that universities and industries can promote long-term growth, with political support from a large population to counter political pressures that limit the state’s ability to organize development.
Global hyper-connectivity is causing a surge in technological innovation, which is not exogenous to the socio-economic system. Innovation emerges from an evolutionary synthesis of strategy, technology, and management, which organizations can build and valorize. As the world moves towards another industrial revolution, subversive dimensions for socio-economic organizations will emerge. Pakistan’s future direction should focus on analytically examining the issue by bringing together government policy, industries, and academia; co-evolving socio-economic systems and dynamics with economic, social, environmental, cultural, institutional, ideological, and symbolic dimensions; and developing the micro-analytical dimension of the economic system, focusing on industries’ core role in the developmental process. This will open the next phase of the global economy.
The future economic prospects of Pakistan look promising but their actual realization would depend upon a number of critical factors such as benign global economy, successful integration of Pakistan into the global economy, sound macroeconomic policies, a strong institutional and governance framework, investment in infrastructure and human development and political stability, integration between academia, industrialists and the policy makers at all levels. Under a constellation of these favourable conditions, it should be possible to add 2 to 2.5 percentage points to the current trend growth rate whereby per-capita income would double in next 10 years.

The Writer is Ph.D in Political Science, and visiting faculty at QAU Islamabad. His area of specialization is political development and social change. He can be reached at and tweet@zafarkhansafdar.