Presentation includes population,literacy rate,major crops and exports in Pakistan.It also focuses on sustainable development/sustainability and its main characteristics,global issues,opportunities/challenges, economic impact,sustainable industrialisation and SME etc.

1. Importance of Social ,
Political and
Economic
Sustainability in
Industrial Growth
Dr Muhammad Jamil Bajwa
FCE, Islamabad

2. PopulationPopulation
• Pakistan is sixth most populous country
in the world with an estimated
population of 184.35 million in 2012-
2013.
• The growth rate of population during
2012-2013 was 2.0 percent.
• Gross national income per capita (PPP
international $4,141 ranking
140th in the world.

3. • Table 12.2: Population by Age Groups (In Million)
• About 28 per cent of the population is between the age of
15 and 29 years.
• The working-age population is about 55%
• Source: National Institute of Population Studies, Planning
Commission of Pakistan.
Age Group 2012 2013
15-19 20.57 20.78
20-24 18.22 18.72
25-29 15.70 16.16
30-34 13.40 13.85
35-39 11.19 11.57

4. Literacy Rate
• Total adult literacy rate (2012-13) is 57%.
• Youth male(15-24 years) literacy rate (2012-
13) is 79.1% and Youth female (15-24 years)
literacy rate (2012-13) is 61.5% .

5. The literacy rate of Pakistan by province is:The literacy rate of Pakistan by province is:
Province Literacy Rate (2012)
Punjab 71%
Sindh 69%
Khyber-
Pakhtunkhwa
60%
Balochistan 50%

6. Major Crops of PakistanMajor Crops of Pakistan
• Maize
• Wheat
• Rice
• Cotton

7. Major Exports
• The majority of exports made by Pakistan
are based agriculture; wheat and fruits like
oranges, mangoes, cotton fiber, furniture,
tiles, cement, marble, textiles, clothing,
sports goods, surgical instruments,
cutlery, leather goods including belts and
shoes, electrical appliances, ice-cream,
software, carpets and rugs, red and white
meat and sea food.

8. Sustainable Development
• A concept popularised by the Brundtland
Report: “Our Common Future”, 1989
• “A sustainable development is able to answer
the needs of the present generation without
compromising the capacity of future
generations to satisfy their own needs”
• It is a development : it aims at improving the
well-being and the quality of life for all
• It has conditions for sustainability : this
implies to protect the existing resources (i.e.
economic, social, political…) which may be
required by the future generations to
maintain a standard of living at least as good
as our .

9. Sustainability
• “The possibility that human and other
forms of life on earth will flourish
forever.”
(Dr. John Ehrenfeld)
• “Enough, for all, forever.”
(Dr. Chuck Hopkins)

10. … and Main Characteristics
• Three main operational characteristics:
– A multidimensional aspect. There are several
interrelated dimensions (economic, social, political
and ecological, …). They have to be taken into
account together for any analytical and decision
process
– Linkages between generations. This raises the
issues of (i) impact on the next generation, (ii)
transmission between the generations, and (iii) intra
and inter-generational equity
– A focus on people’s capacity. This brings : (i) the
issue of participation, through stakeholders, in the
decision making process, (ii) the inclusion of
everybody within a society, (iii) the importance of
the capacity

11. The Bases of Sustainable Systems
Agriculture is often viewed as consisting of three
types of systems: eco
l Sustainable improvement in agriculture –
usually thought of in terms of farm profitability,
environmental stewardship and quality of life
for farm families and rural communities
– must be based on these interlocking
aspects of agriculture.

12. Global Issues Concerning
Sustainability
1. Population - Dampen growth and stabilize size
2. Biological base - Conserve and restore soil, water, flora,
and fauna
3. Energy - Minimize/phase out fossil fuels
4. Economic efficiency - Creation of an economy that
functions like an ecosystem (ie. reduce waste, maximize
recycling)

13. Global Issues Concerning
Sustainability continued…
5. Social norms - Compatible with natural, technical and
flexible centralization
6. Culture - Individualism would be tempered with
communitarianism
7. World order - Transformation of the global investment
and world trade to support sustainable development

14. Opportunities and Challenges
limiting Economic Growth
• Effective Policies & Institutions
– Rule of Law and Political Stability
• Infrastructure
– Adequate Transportation System
– Roads- rural to markets, ports and industries
for goods & services
• A Skilled workforce
– Illiterate working-age adults

15. Opportunities and Challenges
limiting Economic Growth
• Women
– Hurdles to full and effective participation
– Legal,social,regulatory and cultural barriers
• Agriculture-source of
employement,poverty reduction and
food security
– Barriers to Trade,market access,high input
costs,poor access to technology and international
standards
06/10/2011

16. The Three-Legged Stool
Low introduces the
common model of
sustainability made
up of a triad of economic,
social, and political
sustainability.
Sustainability
Political
Society
Economy

17. The Social Dimension of
Sustainable Development
• Greater focus at Johannesburg World Summit
(2002)
• The social dimension is twofold:
– The social sectors : education, health, culture...
– The social links : networks, social cohesion, exclusion…
• The main objective is the reduction of poverty :
– Income and consumption, access to goods and services
(education), assets and potentialities, capabilities
• Other issues are also related to poverty :
– inequality, inequity, vulnerability, social exclusion.
– Reducing poverty may not be enough: the issue becomes that of
social sustainability (in the human development)

18. Ensuring Social Sustainability
• In this context ensuring social sustainability means :
– an improvement in the people’s capability of well-being,
– equity in the distribution of capabilities (assets, rights, skills)
within the current generation
– equity in the transmission of capability between generations
• One may note that :
– Poverty traps and social exclusion makes the inter-
generational transmission of capabilities extremely difficult
– Inequality prevents the reduction of poverty and inequity
jeopardizes the social capabilities (social cohesion)
– Vulnerability can be reduced with the strengthening of
capabilities
• The various forms of sustainability are inter-related
• All these aspects have be taken into account for
sustainable poverty reduction policies

19. The Strengthening of Capabilities
• Improving the people’s capability for a better quality
of life implies a development which focuses on the
strengthening of the persons’ capabilities
(sustainable human development)
• It differs from a development focussing on the
individual’s income (growth), even if the two may be
interrelated (well-being, quality of life)
• It should reduce the capability poverty: lack of
capability which implies other forms of poverty
• This implies appropriate policies : education plays
the major role through it four pillars (learning to
know, to be, to live together, to do)

20. The Transmission of Capabilities
• Protecting and transmitting human and social
capabilities (human and social capital) from one
generation to the others is a condition for sustainability
• It implies the transmission of potentiality (assets),
ability, knowledge, rights… (If not…, e.g. HIV/AIDS)
• An intergenerational transmission which has to be
equitable
– E.g. this implies a low impact of armed conflicts, protection of
natural resources, improvement in the quality of education…
• But it also requires equity in the present generation to
avoid social exclusion, to suppress poverty traps, etc.
• A double gender dimension in the transmission process :
– The role of women for children’s education within the family
– Their vulnerability due to gender inequalities and the risk of
poverty

21. Definitions of Politics
• Politics is the exercise of power.
• Politics is the public allocation of things that are
valued
• Politics is the resolution of conflicts.
• Politics is the competition among individuals
and groups pursuing their own interests.
• Politics is the determination of who gets what,
how, and when.

22. Political influences on incentive
structures
• Political institutions: Which institutions,
whether part of the state apparatus or informal,
influence reform implementation?
• Connections between state and society: How to
mobilise the support of political parties and civil
society?
• Political agency: How to package reforms,
moderate scope and pace, identify levels and
arenas for reform

23. Structural features of politics and
society
• Institutional depth: longevity, adaptability, and
legitimacy of formal and informal institutions
that shape pacts and bargaining strategies
• Composition of governing elites: resistance to
reform efforts and pro-reform coalitions
• Composition of civil society: scope for building
new reform coalitions and sources of political
support to offset opposition

24. Political agency and political
institutions (1)
• Political leadership: vision of potential
benefits, willingness to consider reform
options, reliance on technocrats
• Political commitment: importance of
visible political commitment,
sustainability more vulnerable

25. Political agency and political
institutions (2)
• Political feasibility: severity of crisis (war
or fiscal crisis) creates space for reform
• Political longevity: durability of political
institutions enhances credibility and
predictability, but creates opportunity for
entrenchment and backsliding

26. Strong Political System ensures……
• Establish Political System
• Strengthen Political Leadership
• Encourage public–private dialogue.
• Boost industrial policy management
capabilities
• Increase Exports

27. Three Major Economic Impacts
1. Increasing foreign exchange earnings
2. Increasing income
3. Increasing employment

28. Strategies for Maximizing the
Economic Impact
1. Encouraging import substitution
2. Implementing incentive programs
3. Dealing with multinational companies

29. Definition of Economic
Development: 1950s
• In economic terms, development is the capacity of a
nation to generate and sustain an annual increase in
its GNP of 5% or more.
• Traditional economic measures:
– GDP: is the market value of all final goods and
services produced within a country in a given
period of time.
– GNP: is the market value of all final goods and
services produced by permanent residents of a
country in a given period of time
GNP= GDP+ net factor income from abroad
29

30. Definition of Economic
Development
• Common alternative index is the rate of growth of income
per capita or per capita GNP
– Per capita GNP: is the per-head value of final goods
and services produced by permanent residents of a
country in a given period of time. It is converted to USD
using the current exchange rate.
– PPP Measure: the number of units of a country’s
currency required to purchase the same of basket of
goods and services in the local market that a US $1
would buy in the USA. Under PPP (
purchasing power parity ), exchange rates should adjust
to equalize the price of a common basket of goods and
services across countries. Penn World Tables rank
countries using the PPP method.
30

31. Definition of Economic
Development: 1970s
• Increasing emphasis on non-economic
social indicators
• Economic development consists of the
reduction or elimination of poverty,
inequality and unemployment within
the context of a growing economy.
31

32. Human goals of economic
development : Sen’s “Capabilities”
Approach: 1985
• Economic growth is not an end in itself and has
to enhance the lives people lead and the
freedoms that they enjoy
• Capability to function is what matters for
status as a poor/non-poor person and it goes
beyond availability of commodities
• Capabilities: “freedom that a person has in terms
of the choice of his functionings.…”
• Functioning is what a person does with
commodities of given characteristics that they
possess/control 32

33. Definition of Economic
Development: 1990s
• World Bank in its 1991 WDR asserted that the
“challenge of development is to improve the
quality of life.”
• The improved QOL involves higher incomes,
better education, higher standards of health and
nutrition, less poverty, a cleaner environment,
more equality of opportunities, greater individual
freedom, and a richer cultural life.
33

34. The Nested Box Model of
Sustainability
(LOW AND GLEESON 2003, HART 2006)

35. Sustainable industrialization
Sustainable industrialisation is a
long-term process of transformation
towards a desired vision of an
industrialised economy that
contributes to wealth creation, social
development and environmental
sustainability.
06/10/2011

36. Industry: engine of
transformation of an economy
• Applying technological progress
• Driving and diffusing innovation
• Developing new skills and attitudes
• Stimulating modern services
• Internationalizing economies
06/10/2011

37. 06/10/2011
• Resource-based industries (for instance : processed food,
wood, leather, refined petroleum & rubber products);
• Low technology industries (for instance : textiles, garments,
footwear, furniture, glassware, toys);
• Medium technology industries (for instance : automotive
industry, chemicals, metal products, machinery)
• High technology industries (for instance : electronics,
pharmaceuticals, biotechnology, precision instruments,
aerospace ).
Technological Classification of
Industries

38. The Sustainable Industrialization
Triangle
29/04/2014
Industrial
sustainability
Economic
Development
Social
development
Political
sustainability

39. High Tech
The industrial innovation path
Medium
Tech
Low TechResource
based
Low
value
added
segments
High
value
added
segments

40. The sustainable industrialization process:
The High Road to compete
06/10/2011
• The path to a sustainable industrialization is for firms to compete
through innovation; the alternative is to compete through lower
wages and standards or through currency depreciation ;
• To innovate means to improve products and processes in existing
industries; to compete in higher value added industry segments;
and to enter in technologically more complex industries;
• In developing countries, the innovation process is usually based on
the mobilization, adaptation and learning of existing technologies
and management practices ;
• To innovate requires firms to up-grade their technological,
managerial and marketing capabilities ; it is a risky and difficult
process with important efforts of investment, research and
learning;

41. Global transformations
The on-going and important global
transformations strongly affect the
dynamics of sustainable industrialization
in developing countries and provide new
challenges and opportunities for firms and
in particular for SMEs to compete and
innovate.
06/10/2011

42. Global trends and issues
06/10/2011
• Very high level of wealth creation and improvement in quality of life
during the last 50 years but not everywhere and not for everybody.
• Globalization of financial, trade, investment an knowledge flows
• Rapid and accelerating technological progress with many applications for
product and process technologies: ICTs; biotechnology; new materials;
fuel cells; nanotechnologies;etc…
• Emergence of a global network society and new consumption patterns
• Global governance with new international treaties, regulations and
standards ( trade, quality, labor, environment, intellectual property rights,
etc..) and new actors (global corporations, civil society, media)
• However,alarming and unsustainable trends: poverty, environment, social
development, economic marginalization,

43. Global transformations of
industry
• Globalization of product markets and research characterized by
complexity, uncertainties and changes.
• New and difficult challenges for sustainable industrialization:
environment, social issues, poverty.
• key factors of success : price, innovation, quality, flexibility,
understanding and addressing local markets
• New managerial and organizational processes and systems to
design, produce and distribute products
• New concept of industry: not only production but also design,,
marketing, distribution and recycling
• Globalization of value chains governed by MNCs and
localization of the segments in specialized and localized clusters
of firms which offer unique competitive advantages.
• Rapid transformations of the world industrial map with the
emergence of new and dynamic industrial centers in developing
countries.06/10/2011

44. Innovation strategies of SME clusters
in Global Value Chains
• The industrial success of developing countries in
particular in Asia and now in other regions as well,
including Africa, is based on the links between local
industrial clusters and global value chains and in
the capability of the local firms to innovate and up-
grade their capabilities by networking and learning
with the global corporations and the other clusters
of the global network.
• A key factor of this industrial success is the support
to this process provided by an innovation system of
technical and financial institutions.
06/10/2011

45. “The possibility that
sustainable
enterprises
will flourish forever.”
IN SUMMARY …
SUSTAINABILITY
IS
$MART BUSINESS

46. Thank you
for your kind
attention
06/10/2011