In the US, over 50 percent of employment was in agriculture until 1950s. Land was the scarce commodity, so land ownership was the source of wealth and power. This is still true of Pakistan today. But with today's technology, less than 5 percent of the population is required to feed the remaining 95 percent.
About 30 years ago, the industrial economy reached its peak. The manufacturing sector accounted for the bulk of employment, more than 50 percent in the US. Factory and oil ownership were the source of wealth and power, and capital was the scarce commodity.
Now, 40 percent of the growth in the US gross domestic product (GDP) comes from the technology sector. Capital is no longer scarce. Morgan Stanley predicts that within a few years 100 percent of GDP growth will come from technology.
In the next half-century, as the knowledge economy takes over, less than 10 percent of the US population will work in the industrial economy. The American work force needs new skills on a massive scale. The new scarce commodity will be human capital.
As a country, Pakistan must catch this knowledge train. In the next five years Pakistan must determine its global competitiveness as a nation. New telecommunications technologies offer an opportunity to redirect the evolution of Pakistan's cities. It is possible to discover "new oil" in the form of entrepreneurial energy and human capital in Pakistan.
There are a number of requirements for success in the knowledge economy. These include social equality and classlessness, capitalism, competition, availability of education and knowledge capital, low costs, low barriers, a wide range of educational opportunities, Internet-enabled public access to world-wide resources, admiration for research and establishment of new role models.
The new economy needs human capital more than financial capital. Human capital is in abundant supply in Pakistan, it just needs to be channelled efficiently. What is required to achieve this transformation? Primarily, intellectual capital must be enabled, empowered, and made accessible to the global economy.
Ideas are a form of capital. They can't be inherited. They may come from anybody or anywhere. While they have to be powered by entrepreneurial energy, they are not class based. They don't depend on who you are or how much wealth you have. They are the most powerful assets in the new economy.
Most societies today are organised around ancient communication technologies, such as rivers, mountain passes, and ports. The Internet is the first mass two-way communication technology, and probably the single most important technology since the printing press. The first area to focus on is telecommunications, because human interaction is the enabler of Pakistan's greatest resource - human capital and entrepreneurial energy.
Pakistan needs to put resources to the highest possible economic use. Using the entrepreneurial model, 5 percent of the people, empowered with the right tools, can pull the other 95 percent along. If this sounds impossible, consider how many people accounted for the bulk of social and economic change in the US in the last decade. Only a few thousand were responsible for initiating and driving the bulk of the changes that have benefited the entire population.
So, if Pakistan takes her limited resources and gives them to the 5 percent - how we pick the five percent is a politically important question, of course - and let them use their personal entrepreneurial energy, this five percent will determine how to maximise their use to multiply the resources. A dollar becomes five dollars not 50 cents in three years, through the multiplication that entrepreneurial energy and technology can achieve.
So, which 5 percent of the population do we choose? If you believe in the entrepreneurial model and spirit, the 5 percent shouldn't be the best connected, most privileged or the richest, but the people who have passion for emerging technology and can use it best.
Entrepreneurs and investors must examine several emerging technology sectors and find a good match for the local market and as well as international markets for higher return on investment. For example, voice-over-IP telephony, wireless infrastructure, mobile applications for Pocket PC and cellular phone, wireless storage devices, Trusted ERP systems and secure E-commerce applications. Other areas of interest include biometrics (a technology that uses human physiological traits, such as fingerprint, face, retina and voice to identify and verify an individual) and bioinformatics (a multi-disciplinary field of computer science, biological sciences and statistics).
There is a pressing need to establish venture capital funds in Pakistan, not just one but multiple to get the entrepreneurial engine going. At the moment, Pakistan has two venture capital funds to support entrepreneurial efforts. However, the combined pool of money is under $10 million. On the other hand, India and China have successfully pooled the amount in excess of $900 million and $800 million, respectively.
Entrepreneurial energy is the new oil, and it is not in short supply in the western world and in the global economy. Pakistan must sharpen its tools to dig the ground and fuel the entrepreneurial engine. Pakistan has the human capital. The Internet has created world-wide access for information exchange, trade and commerce. Pakistan has the capacity to start discovering the "new oil" today. It is time for Pakistan to unleash the tiger within.