Pakistan's economic future hinges on a critical transition: moving from a reliance on finite natural resources to a sustainable, knowledge-driven model. This shift is anchored in robust Research and Development (R&D). However, the country's current R&D landscape reveals a significant gap between potential and reality, with spending at a mere 0.164% of the Gross Domestic Product (GDP).
The Current State: Imbalance and Underperformance
Unlike leading global economies where knowledge sectors contribute 70–80% to growth, Pakistan remains largely resource-dependent, with these sectors accounting for less than 30%. This is reflected in its 99th position out of 139 nations on the Global Innovation Index (GII). The infrastructure for innovation exists, featuring over 250 universities, specialized research institutions, three key funding agencies, eight National Incubation Centres, and nine Centres of Excellence. Yet, the output—measured in publications, patents, and sectoral growth—remains constrained.
A major structural flaw is the source of funding. Most R&D investment comes from the public sector, with private firms and non-profits playing a minimal role. In advanced economies, the private sector drives nearly 50–60% of R&D spending. This imbalance is worsened by uneven sectoral allocation. For instance, from 2015 to 2025, the agriculture sector received an average of 19.7 billion PKR annually but saw only 2.38% growth. In stark contrast, the IT sector, with just 3.1 billion PKR (one-sixth of agriculture's funding), recorded growth nine times higher.
Measuring Output: Patents and the Industry-Academia Divide
The innovation performance metrics paint a concerning picture. According to 2025 World Intellectual Property Organisation (WIPO) data, Pakistan ranks 53rd globally, with 963 patents filed and 2,112 active patents. A significant portion is classified vaguely as 'others', indicating fragmented patent generation.
Furthermore, there is a stark disconnect between academic research and industrial application. Pakistani universities produce over 7,000 publications annually with a healthy 20.9% growth rate, ranking 26th globally in the Scimago Journal Ranking. However, less than 20% of this research is utilized by industry, highlighting a lack of applied focus and mutual distrust.
Root Challenges and Pathways Forward
Three core challenges impede progress: private-sector disengagement, a misaligned research base, and weak public-private coordination. The First Industrial National Innovation Survey 2024 found that 93% of firms do not conduct any R&D. A primary reason cited is the high cost of innovation projects.
To counter this, experts recommend implementing targeted R&D tax incentives, a tool successfully used in countries like China (85% of firm support) and Turkey (48%). Secondly, universities must transform into innovation hubs. While developed economies conduct 60% of research in higher education, Pakistani universities produce less than 20% of industry-used research. Strengthening academia-industry linkages is crucial.
Finally, a collaborative funding model is needed. The proposal suggests a 60% public and 10% private share in the research phase, shifting to 30% private investment dominating the development and commercialisation phase. This would leverage public funding for early research and private sector expertise for market application.
In conclusion, Pakistan's R&D ecosystem possesses the foundational elements but requires strategic realignment. Transitioning to a knowledge-driven economy demands targeted tax incentives, empowered universities focused on applied research, and robust public-private partnerships to translate potential into tangible economic growth.
