Pakistan’s AI moment: build, don’t borrow growth

The 2025 Nobel Prize in Economics awarded to Joel Mokyr, Philippe Aghion and Peter Howitt celebrates innovation and creative destruction as the real engines of prosperity. Pakistan should take note: we too often shield incumbents and penalize pioneers. Growth thrives when we back risk-takers over rent-seekers—because genuine innovation isn’t imported, it is built.

AI and the knowledge–doing loop

Mokyr’s core insight is that sustained growth flows from a virtuous cycle between understanding and doing. Artificial Intelligence can supercharge that cycle. By accelerating experimentation, generating hypotheses and automating parts of discovery, AI is reshaping not only how we work but how we learn and invent. Countries that harness this dynamic will compound knowledge faster—and turn it into productivity sooner.

Creative destruction needs balance

Aghion and Howitt remind us that innovation flourishes when competition and incentives are in balance. Dominance by a few players can choke off new entrants, while cutthroat rivalry can undercut long-term research. Today’s AI landscape is dominated by a handful of global firms with unmatched compute and data. The open question is whether this concentration will centralize gains or diffuse productivity broadly.

Build, don’t borrow: Pakistan’s imperative

Pakistan cannot remain a passive consumer of AI made elsewhere. We must build domestic capacity. Our strengths in software, mathematics and data science—amplified by a vibrant diaspora—give us a head start, but talent needs an ecosystem to thrive. That means local data, practical testbeds and predictable rules that lower the cost of trying new things.

• Shared, high-quality public datasets for agriculture, health, education and logistics
• Regulatory sandboxes so innovators can test safely and iterate quickly
• Public–private partnerships that scale proven ideas
• Merit-based, transparent funding and procurement that reward outcomes

From plans to outcomes

Pakistan’s National AI Policy projects that effective adoption could lift GDP by 7–12% by 2030 and create up to one million jobs, with potential economic gains estimated at roughly Rs4.4 trillion—especially from smarter logistics, optimized farming and data-driven exports. But these are possibilities, not certainties. Real impact depends on whether access to AI extends beyond major firms to small businesses, rural entrepreneurs and the vast informal economy.

Protect people, not positions

Disruption is inevitable. In an economy with high informality and limited safety nets, the priority should be cushioning people, not preserving every job. That requires:

• Large-scale reskilling and upskilling in digital, analytical and AI-assisted workflows
• Transition support for workers moving across sectors
• Portable credentials and short, stackable learning pathways tied to industry demand

Investing in human capital is not optional—it is existential.

Where AI can move the needle fast

• Precision agriculture: satellite and sensor data to optimize irrigation, fertilizer and pest control; lower waste, higher yields.
• Public health: triage, diagnostics and capacity forecasting to stretch scarce clinical resources.
• Education: adaptive tutoring, teacher assist tools and vernacular content to close learning gaps.
• Smart logistics and trade: demand forecasting, route optimization and port automation to cut export costs.

None of this matters if smaller firms and provinces remain digitally excluded. Inclusion—not imitation—must anchor the strategy.

Institutions that welcome experimentation

Our binding constraints are institutional, not technological. Pakistan needs rules that evolve with the tech and reduce the penalty for trying. Priorities include:

• Clear data governance and privacy protections that still allow responsible access and experimentation
• Fair, predictable intellectual property and open standards to prevent lock-in
• Outcome-based public procurement that buys solutions from domestic teams, not just hardware
• Independent evaluation units to test and scale what works, and retire what doesn’t

Education: the deepest lever

AI literacy should be foundational from school to university. Curricula must blend computer science, statistics, domain knowledge and ethics. Stronger ties between academia, industry and startups can convert research into deployment. Scholarships, challenge grants and paid internships can accelerate the pipeline.

Manage the risks; seize the upside

If mismanaged, AI could widen inequality, entrench monopolies and deepen technological dependency. Managed well, it can unlock unprecedented productivity and transparency. The lesson from the laureates is simple: progress is built by institutions that let new ideas breathe—and survive their first failures.

A national choice

Pakistan’s youth, entrepreneurial energy and growing digital base provide the raw ingredients. What’s missing is trust in experimentation and the courage to reward the new over the familiar. Growth will not come from protecting the past. It will come from empowering builders, opening data, and backing ideas with capital and procurement.

The right time to prepare is before disruption arrives. Pakistan can shape the AI revolution—or be shaped by it. Let’s build.