This blog is part of a series that discusses findings from the Pakistan@100: Shaping the Future report, which identifies the changes necessary for Pakistan to become a strong upper middle-income country by the time it turns 100 years old in 2047.
Structural transformation is central to how countries grow rich.
The movement of jobs from agriculture to manufacturing and service industries is the first stage of that transformation
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Then, within industries, a process of creative destruction helps weed out unproductive firms and gives rise to more efficient and innovative ones.
Of course, no two countries have the same growth path. But those that succeed at sustaining growth do so by moving resources to more productive areas and building firm capabilities.
Pakistan’s economy is shifting toward more highly skilled, modern and productive industries but the path is uneven and slow relative to global norms.
The economy is less agricultural, more urban and services-oriented than before. Traditional industrial clusters have started exporting new products, while new industries such as information, communications and technology (ICT) are emerging.
Relative to the historical norm for countries at similar levels of per capita GDP, while Pakistan’s agricultural sector is of typical size, its manufacturing sector is small, and the services sector large.
