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Managing the crisis

A few weeks back, in an article titled ‘What crisis?’, I tried to highlight why it is important for Pakistan to prioritise embracing wind energy over other forms of energy. The first and blindingly obvious reason was what it offered – the most optimal reduced-cost and reduced-time-to-market solution to permanently eradicate the energy crisis. The second and third reasons are directly related to significantly reducing our imports and massively increasing our exports.

The second and more salient reason is how a 100 percent indigenous wind-turbine solution could be rapidly developed within 12-18 months by reusing the existing core competencies in existing indigenous, world-class institutions – the Pakistan Aeronautical Complex, the Heavy Electrical Complex, and the Heavy Mechanical Complex.

The third reason highlighted how the indigenous wind-energy solution could provide a new avenue for large-scale exports within 2-3 years. The global wind turbine market is projected to exceed $100 billion by 2016 and continue to suffer from insufficient worldwide capacity. The global wind turbine growth rate of 25 percent CAGR over the last five years is projected to continue and exceed 2m MW in installed capacity by 2030.

For the cynics, let me illustrate this point with a simple example. In just 14 years, India’s Suzlon Corporation has gone from nothing to becoming the world’s fifth largest wind-turbine supplier. In Pakistan, we don’t have to start from nothing. We already have relevant world-class institutions such as PAC, HEC, and HMC with relevant core competencies for delivering innovative wind-turbine solutions for capturing a major slice of the $100 billion plus global market.

Pakistan has many world-class institutions possessing a variety of core competencies that can be applied to diversify into new profitable markets. The country belongs to an elite group of countries with core competencies to design and manufacture Unmanned Aerial Vehicles (UAVs or drones) with both defence and civil capabilities.

In the case of UAVs, the strategic innovation and enlightened vision is about combining the core competencies of PAC, GIDS, SATUMA, et al to create a world-class institution capable of producing innovative next-generation UAVs to capture a major slice of the global market expected to exceed $100 billion plus by 2018 at a CAGR of more than 12 percent.

Pakistan also belongs to that elite group of countries with the core competencies to acquire satellite launch capability – a $50 billion plus market with insufficient global capacity to launch the projected 1000+ satellites by 2020.

In the case of wind energy, the strategic innovation and enlightened vision does not lie in the decision to install it. Anyone and everyone can and is doing it. One major source of strategic innovation lies in the identification and reuse of existing core competencies to diversify into new, hugely profitable business areas, and create world-class institutions producing innovative solutions.

In the case of PAC, HEC, HMC, GIDS, et al, the strategic innovation and enlightened vision is about combining existing core competencies to create world-class institutions capable of producing innovative wind turbine, next generation UAV and satellite launch solutions to capture a major slice of the global markets!

One critical attribute of strategic innovations is that they are of little use to anyone unless they solve an existing problem(s).

The choice is simple. Embrace the winds of change and strategically transform. By all means continue to talk about incremental innovations or becoming a knowledge-based society. By all means burn the midnight oil cutting a few kilometres here and there from the length of desperately needed future roads.

However, at the same time, we also need to become strategically innovative and culturally transformational with a vision to be able to see what’s next. We need to strategically exploit our existing core competencies and create new ones to enable diversification into new profitable $100 billion plus markets.

For private sector corporations sitting on excess liquidity, there are a lot more potentially lucrative blue-ocean opportunities available for investment than just chasing traditional markets such as airlines, steel mills or mobile network operations.

The writer is a Sloan Fellow of London Business School and former Spanish Representative on the $100B+ Eurofighter project.

Email: skhan.sln2004@london.edu

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