A Study On Industrial Structure Upgrading In Pakistan

Sustained growth base in the economy is determined by the level of sustained growth patterns in the industrial economy of developing as well as developed countries. Pakistan, being a developing country needs to revitalize its industrial base at primary, secondary and tertiary levels. This dissertation aims at studying the evolution of industrial structure and its optimization, including the fabrication, development and upgrading of industrial structure, the main factors of industrial structure upgrading, regional industrial structure and industries contributing to the growth and development of the various regions. To reap the competitive benefits and economic gains it ought to build a strategy focusing on its industrial base and its upgrading.This dissertation will provide understanding on the relations between industrial structures with different characteristics and the change that can be brought at various industrial levels increasing efficiency and productivity. In order to do so, we first examine industry characteristics in its production and output gains with respect to technology orientation and intensity, the impact of structural change on productivity growth, and the existence of convergence in industrial structures. Second, this study investigates the impact of leading industries on the formation of industrial structures and on aggregate productivity gains in manufacturing. While descriptive analysis of industry with regard to technological orientation and intensity shows changing industrial structures in favor of relatively more technology intensive production and exports, decomposition analysis suggests that the impact of structural change on investment growth is not vital. Structural convergence tendency is observed in Pakistan like fast growing countries have had converged their industrial structure towards those of industrialized countries, while in Pakistan this trend is lagging behind moving at a very slow pace. Finally, statistical and econometric results showed that while emergence of a leading industry with gains in its productivity and timely policy regulations in the competitive markets may foster productivity growth and economic and infrastructural development.Arrangement of this dissertation has been made into seven chapters starting from first chapter presenting the introduction, background and significance of the study, second chapter takes a detailed review of the related literature and prepares the basis for further investigation. Third chapter presents the overview of Pakistan industrial base with special focus on the trends it has followed over the decade. Chapter four presents the analysis and estimation applying grey systems theory; Evaluation index system to analyze problems of traditional methods of industrial structure optimization and for the selection of leading industry and the factors contributed for the establishment of industrial hierarchy. Chapter five shares the experience of China for the establishment of a model industrial structure upgrading experience. Chapter six presents the route and mechanism to realize industrial structure upgrading along with case studies about two model industrial cities, the main paths and strategies of Punjab and Sindh Province’s industrial structural adjustment in Pakistan and, Finally the last chapter concludes major findings, conclusions, creative points and policy recommendations.Econometric estimations are made using computer software E-views, LINGO and MS Excel. Case study approach has also been applied to sort out the situation by presenting the cases of two leading and representative cities in Pakistan. Both quantitative and qualitative; information and data has been used to reach at some vital conclusions.The research revealed that industrial structure upgrading is a process of coordinating the development of different industries and meeting the increasing demand of the society and international market by better combining and allocating resources (Human, Capital, Energy and Natural). The practice of development and industrial transformation has proved that continuously promoting and revitalizing industrial structure has significant advantages in accelerating the speed of sustainable economic development and realizing associated economic benefits resulting in strengthening of the economy and country as a whole.