Rising share of services and manufacturing in an economy are generally associated with urbanisation as the economy increases its sophistication through stronger productivity and growth. Unfortunately Pakistan is unable to use its increased urbanisation and agglomeration to generate the growth and high productivity jobs, says a recent World Bank report.

The report highlighted key issues that hampered economic activities in Pakistan, with infrastructure, agglomeration and urbanisation ranked as top issues which governments have failed to address for decades, putting the country’s economy at risk.

According to the report Pakistan is in the midst of two key trends that can provide increased manufacturing potential: significant migration to urban areas, and the development of agglomeration economies. Agglomeration economies are the advantages of the clustering effect of industries.