IN the last decade, informal jobs have mushroomed in Pakistan. Part of the reason is the high income tax levy which makes small firms contain costs by hiring cheap labour for informal jobs. Historically, societies have not been able to grow economically without a structured job market. In Tanzania, Ethiopia and the Czech Republic, for example, cheap labour coupled with the scarcity of capital made informal labour predominate even in industry. Clearly, these economies have suffered stagnation as opposed to Taiwan and Vietnam, where the main driver of growth was the formal jobs sector.

With fast automation in all sectors, labour-intensive economies are likely to spiral further downward. Traditionally, in Pakistan, low-cost labour has meant quick income for families that have many mouths to feed. However, this can at best be a survival mechanism for a fledgling economy. Hope for growth can only come from a sound industrial policy that not only creates formal employment but also upgrades the skill level required for those jobs.

Education and training remain the key drivers of economic, industrial and social development as we have seen in many successful economies. Those that have run into roadblocks after a period of intense growth — such as........

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