The Special Technology Zone (STZ) is a scientific ecosystem designed on the triple helix model of innovation where the government provides special incentives to accelerate the development, promotion and dissemination of the latest technologies.
This is a group where innovation is the main impetus for all basic and foreign activities. The companies and individuals who are working to develop and disseminate the technology are themselves immersed in the smart city lifestyle.
The government helps and encourages businesses to thrive, create wealth and provide rapid opportunities for others. People and technology organizations, near and far, are attracted to these ecosystems.
Gradually, the territories spread beyond their original boundaries and eventually formed towns and cities. In this way, any STZ helps the supporting government to ultimately implement a broader reform agenda and bring social and economic development to its components.
Research Triangle Parks in Silicon Valley (USA) and North Carolina (USA) in California have been among the earliest examples of such areas since the 1950s. At the time, however, they were called research parks and were encouraged by universities hosting high-tech companies.
Emerging Asian economies sought to emulate this model, and in the 1970s established Daedeok Innopolis in Zhongguancun Science Park (Z-Park) in Beijing (China), Shenzhen Special Economic Zone (China) and Daejeon (South Korea).
The Asian region was stimulated by large-scale government intervention because the local academy and industry were not strong enough at that time. Examples of emerging tech giants in such regions are Apple, Google, Intel, Hewlett-Packard, Cisco, Huawei, Lenovo, Baidu, Tencent and Xiaomi.
These giant corporations now boast more revenue than many sovereign states and the same number of human resources as many smaller cities. Since 2000, there has been a new trend where private entities, such as Samsung Digital City and LG Science City (both in South Korea) have developed entire territories.
Intellectuals in Pakistan have been talking about cooperation between industry and academia for decades. However, none of the proposed models offered a realistic and practical solution for using local educational institutions and industry for the wider social and economic benefit of the country.
One reason was that the solution did not enable the industry, especially the technology industry, to play its role in real national development. The missing part was an appropriate and comprehensive incentive package.
Although the SEZ model provided the closest set of concessions, in the Pakistani context, SEZs were far from urban centers and educational institutions. In other words, we can say that the requirements of the technology sector and the production factors of the SEZ model did not match.
The Special Technology Zones Authority (STZA) Act of 2021 reversed that resemblance - now giving the industry a leadership seat in developing policies and regulations through unprecedented incentives and technology-specific programs.
One true axis, textually and spiritually, has taken the industry to the forefront of the Triple Helix. To support all of this, STZA is the architect, facilitator and regulator of the ecosystem.
STZA, in the seven months since its enactment, and in the approximately 17 months since its ordinance, has not only received major concessions (10-year corporate tax and duty exemptions, forex provision, subsidized land and utilities, and more). But rather a system of rules, regulations and other legal provisions that would enable it to support the technology industry in a special way.
Relations have also been established with all government units (OGAs) in all units of the federation and national and international aid agencies.
Talks with domestic and foreign technology companies have been fruitful, and many technology companies have negotiated access to specialized commercial centers (STZs), which will be helpful to other businesses.
Licensing applications have been opened for Zone Developers (ZD) and Zone Enterprise (ZE), and a large number of applications have been received in various technical fields which will bring significant investment and in achieving the Authority's strategic goals. Will do their part
Strategic objectives include technology transfer, technology export, import substitution, job creation, human capital development, research, development and innovation. The details of the licenses granted and the implications of each will be covered in a future analysis.
According to preliminary studies, a typical 100-acre metropolitan area is expected to generate US 1 1 billion in investment and برابر 1.6 billion in GDP annually.
The estimated volume of investment indicates that the state will attract $ 20 for every dollar invested in land, infrastructure and connectivity. Currently, the total area of all the expected areas to come online in the near future is 1500 acres.
Using the conservative estimates given above, total technology investment in these regions could be equivalent to US $ 15 billion, and economic activity could be equivalent to US $ 24 billion (> 6% GDP) over the next several years. ۔
Given the current state of affairs in the country, it is expected that most of these investments will come from domestic sources rather than foreign investment - in fact, it is often domestic investment in the field of change that leads directly. Serves as a catalyst for foreign investment.
The first tech zone to be created is Islamabad Technopolis - an area of 140 acres in Chak Shehzad Mohalla of Islamabad. The district will host universities, research and development centers, offices of science and technology support organizations, and housing associations.
The CDA has been instrumental in improving access and electricity. Nespak was contracted to design the master plan and oversee the EPC. Other private sector entities have completed various civil engineering studies and design regulations and services.
With the development of major infrastructure, the process of distributing land is about to begin. As this process will take time for ZDs to free up space and ZE organizations can start their operation, arrangements have already been made for ZE tenants at the central location in Islamabad.
The State Life Insurance Corporation of Pakistan (SLIC) has applied to STZA as an area for the new State Life Tower in the Blue District. The 300,000-square-foot tower will house ZE companies working in the areas of artificial intelligence, financial technology, electronics design, and venture capital management and deployment.
The facility will have an incubator and other facilities to support the ecosystem and will be an excellent example of public sector collaboration for national purposes.
Other STZs announced as a result of ZD Lahore applications include Technopolis in Lahore, Pakistan Digital City in Haripur, and Pakistan Austrian Institute of Applied Science and Technology (PAF-IAST) in Haripur.
PAF-IAST is also the first university to apply for a ZD license and many other universities have since applied. It represents an aspect of change where multiple universities of science and technology can move their research and development towards technology transfer and commercialization.
In addition to the above five districts, there are more than a dozen other districts currently under consideration across Pakistan, and requests for more are still ongoing.
The concept of the private sector has already taken hold and has attracted widespread interest from software companies, electronics assemblers and manufacturers, defense technology companies, biotechnology, vaccine manufacturing units, and universities and colleges.
ZDs target the full spectrum of technologies, from artificial intelligence to marine sciences, from agricultural technologies to materials engineering, from biotech to electronics, and from cybersecurity to renewables. Commercial establishments such as hotels, hospitals and restaurants have also expressed interest.
Several STZA alliances and partnerships will lead to the arrival of foreign technology companies. Mastercard and STZA have signed a Qatari Digital Partnership for digital payment solutions for cashless regions and SMEs.
Shurooq Partners, a venture capital firm focused on the Middle East, North Africa, Afghanistan and Pakistan, and STZA have signed a Memorandum of Understanding (MoU) with plans to have a private venture capital fund for Pakistan to support local businesses.
Through the president's initiative to include the American community, STZA has actively attracted business from the USA. Several agreements with Chinese associations such as Zhongguancun Belt & Road Promotion Association (ZBRA) and Z-Park have paved the way for attracting Chinese technology companies to Pakistan.
Likewise, Russian technology companies will be attracted through a memorandum of understanding with Skolkovo Technology Park. Many technical organizations and institutions in many other countries are similarly involved and many ambassadors and missions have visited STZA for technology cooperation.
All these aspects represent a watershed opportunity for the country to accelerate its scientific and technological progress. As the national spread of the regions progresses and technology companies begin to enter and operate from the regions, the effects of the STZA initiative begin to become apparent.
The impact will not be limited to a single vertical theme or specific technology theme, but will extend to the entire field of technologies and integration in terms of its design. The authority is designed to lay the foundation for a knowledge economy and foster an innovative economy.
Dr. Mohamed Ali Mohamed is the Director (Research and Market Intelligence) at the Special Technology Zones Authority (STZA). He specializes in technology research and policy studies and is a contributor to the National Science, Technology and Innovation Policy 2022.
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