By Qudsia Bano

The rapid rise of artificial intelligence (AI)-powered factories across major industrial economies is transforming global manufacturing and creating an opportunity for Pakistan to boost productivity, strengthen competitiveness and improve export performance through greater adoption of digital technologies.

Manufacturers around the world are increasingly using AI to automate production processes, enhance quality control, reduce machine downtime and optimize supply chains. The trend is accelerating as industries seek greater efficiency and resilience amid intensifying global competition.

The World Economic Forum recently added 17 new members to its Global Lighthouse Network, bringing the total number of manufacturing sites recognized for advanced Fourth Industrial Revolution technologies to 189. Of the new additions, 13 sites were designated as Fourth Industrial Revolution Lighthouses for achieving significant operational improvements through digital transformation, while five received Sustainability Lighthouse status for reducing environmental impacts through advanced technologies.

According to the United Nations Industrial Development Organization (UNIDO), artificial intelligence, industrial automation and digital manufacturing technologies are emerging as key drivers of productivity growth and industrial competitiveness, particularly in export-oriented sectors. Countries investing in smart manufacturing are benefiting from faster production cycles, lower operating costs and improved product quality.

The momentum behind AI-driven manufacturing has continued to strengthen globally. In April 2025, leading industrial technology companies expanded investments in AI-enabled manufacturing platforms capable of real-time process monitoring, predictive maintenance and automated quality inspection, reflecting growing demand for intelligent production systems.

For Pakistan, the global shift comes at a critical juncture. According to the Pakistan Economic Survey 2025-26, manufacturing accounted for 12.1% of the country's GDP, while the large-scale manufacturing sector continued to face challenges stemming from high production costs and structural inefficiencies.

Industry experts believe the wider adoption of AI-based production systems could help address these challenges by improving efficiency, reducing waste and enhancing the competitiveness of Pakistani products in international markets.

Pakistan's digital infrastructure is also expanding. The Economic Survey reported that broadband subscribers reached approximately 161 million, while 3G and 4G subscribers exceeded 143 million, providing a stronger foundation for industrial digitalization and technology adoption.

The government has increasingly prioritized digital transformation through initiatives aimed at promoting information technology exports, digital skills development and industrial modernization.

Speaking to Wealth Pakistan, Muhammad Bilal, Assistant Manager for Digital Transformation at Nishat Mills Limited, said AI-powered manufacturing is rapidly becoming an industrial necessity rather than merely a source of competitive advantage.

"Manufacturers around the world are using artificial intelligence to optimize production schedules, reduce machine downtime and improve product consistency. Companies that fail to adopt these technologies risk losing competitiveness in international markets where efficiency and quality standards continue to rise," he said.

Bilal noted that Pakistan's textile sector could particularly benefit from AI-enabled solutions.

"Predictive maintenance systems, automated quality inspection and intelligent inventory management can significantly reduce costs and waste. These technologies are becoming more accessible and can deliver measurable productivity gains even for medium-sized manufacturers," he said.

Saad Ahmed, Deputy Manager of Supply Chain Analytics at Lucky Cement Limited, said smart manufacturing can help Pakistani industries improve operational efficiency and resilience.

"AI-driven systems enable companies to analyze large volumes of production and logistics data in real time. This improves decision-making, reduces inefficiencies and allows manufacturers to respond more quickly to changes in demand or supply-chain disruptions," he said.

Ahmed emphasized that successful adoption would require investment not only in technology but also in workforce development.

"The technology itself is important, but companies also need skilled workers capable of managing digital systems and interpreting data. Industrial training and digital skills development will therefore be essential to realizing the full benefits of AI-powered manufacturing," he said.

Analysts believe the global expansion of AI-powered factories represents a major shift in industrial production. As countries compete to strengthen manufacturing competitiveness, Pakistan has an opportunity to leverage its expanding digital connectivity, large industrial base and growing technological capabilities to modernize production systems.

Greater adoption of artificial intelligence could help local manufacturers improve productivity, lower operating costs and enhance export competitiveness, supporting broader industrial growth and economic development in the years ahead.

Credit: INP-WealthPk