Over the past decade, the global economy has undergone a structural shift, with artificial intelligence (AI) emerging as a core industrial infrastructure. While countries like the United States, India, Vietnam, and China invested heavily in AI compute clusters, industrial automation, and digital ecosystems, Pakistan has lagged, focusing predominantly on political disputes and short-term macroeconomic stabilisation.
Read More: Artificial Intelligence, Productivity & Economic Growth
From 2015 onwards, the rise of OpenAI, the industrial-scale deployment of GPT models, and Nvidia’s expansion into AI-optimised computing marked the beginning of an AI-driven capex supercycle. Hyperscalers committed tens of billions to AI infrastructure, while Asian competitors integrated AI into manufacturing, IT services, and supply chains. This proactive approach strengthened productivity, export competitiveness, and technological sovereignty.
In contrast, Pakistan’s research and development expenditure remains among the lowest globally at 0.16% of GDP. Despite claims of a large STEM pipeline, advanced computing and AI-relevant talent are concentrated in a handful of institutions, leaving the broader workforce underprepared. Key export sectors, including textiles and IT services, face structural vulnerabilities: low automation, limited AI adoption, and weak infrastructure make them increasingly uncompetitive relative to India and Vietnam.
Policy responses have focused on external financing and IMF programmes, offering short-term stabilisation without addressing long-term industrial upgrading. Experts warn that such misallocation of focus risks a gradual erosion of competitiveness, where Pakistan participates only in low-value segments while regional peers capture higher-value production and services.
Read More: Pakistan unveils $1 billion plan to advance national AI ecosystem
The decade from 2015 to 2025 has demonstrated that technological foresight and industrial investment are now critical determinants of national economic strength. Pakistan’s failure to integrate AI at scale and upgrade industrial capabilities threatens to lock in structural disadvantages, potentially undermining export growth, currency stability, and economic resilience in an increasingly intelligence-driven global economy.