Shaping the Future of Pakistan

Zubair Anjum

Pakistan’s Information Technology industry has a come a long way and is one of the fastest growing export sector of Pakistan. From less than $20 million in annual exports in 2000, as per the State Bank of Pakistan the country’s annual IT exports have crossed the $600 million mark at an annual growth rate of 30-40%, projected to reach over $1 Billion by 2020. Currently, Pakistan’s IT industry’s global share is estimated at $2.8 billion. There are over 2,500 companies with 110,000 IT professionals, with 24,000 engaged in IT exports. IT industry creates direct and indirect employment opportunities, provide people with international exposure, and generate Foreign Direct Investment.

Pakistan is doing well as per its current capacity but when we compare statistics with other countries exporting IT services – there is a considerable room for improvement. As the IT Industry revenues in the neighboring country crossed $150 billion in FY16; with IT export revenues over $100 billion. This in turn is expected to add 350,000 jobs per fiscal year, and providing direct employment to 3.1 million and indirectly to about 9 million people.

Information Technology is human intensive that requires strengthening the human capital. If the inflow is good then IT industry can continue to grow at a faster pace and reach its maturity stage. The most successful countries in IT explored acquired a reputation of quality for training of IT specialists as there is a growing global demand for such professionals. There are technology companies in the region that have their own institutes where they train people for months prior to assigning them on a project. Lack of skilled human capital limits our capability in taking on volume-driven type of outsourcing projects. Moving forward, we must realize that it is not just the economic capital but human capital that will drive growth in Pakistan. There are many countries that have fewer resources but taken off and flourished because of the unique ideas, innovation and creativity.

The country risk also impacts the IT exports – let’s take an example, the largest Pakistani software and outsourcing company manages to employee 3,000 people as compared to 300,000 people employed by an Indian company. This illustrates the size of IT companies in Pakistan and country risk barriers. The network of overseas residents also play a role in the development of successful economies. India is leveraging on its social capital with greater involvement of expatriates who refer the IT business. It is our social capital that will help us with building a strong brand image of Pakistan abroad. In this fast paced and highly competitive market, it is not just about cost and labor arbitrage but it is about synergizing with local, regional and international partners and expat Pakistanis. We must leverage on Social Capital with involvement of expatriates in the home affairs to promote an international network results in employment generation which fosters economic growth in long run.

We can do well if we make optimal use of all our resources – as a private sector and with an ongoing support from government’s initiatives. Government’s support is required to build a strong country image, mitigate the law and order situation, strengthen IT infrastructure, offer flexible visa policies, attract investors, and promote IT exports. The Government must also assist the IT industry in developing a network within local bodies and forums, and ease out visa policies which provide our people with access to the world and vice versa.

The practical steps must start from the university curriculum, and the effort to increase awareness on how IT is disrupting the world and a professional or entrepreneurial career in IT would make a difference to Pakistan’s growth. We should encourage innovation, entrepreneurship and career counseling at the universities. There must be public-private partnership to launch incubator and mentorship programs, arrange internship and management trainee programs for fresh graduates. At the academia level, there is a need to further enhance entrepreneurial spirit in students through modification in curriculum and liaison with idea incubation bodies.

As per Pakistan Software Export Board, Pakistani freelancers in IT are contributing over $100m as FDI for Pakistan. Many entrepreneurs and start-ups have already earned admiring reviews. This shows Pakistan’s but still there is a lot to do to; Pakistan’s silver lining is its population, which can be tapped via Entrepreneurship. Most of our population is young and looking for opportunities, the absorption rate in skilled categories is low. In the next 10 years Pakistan must create a minimum of 36 million jobs to absorb workforce additions and this would be possible if we can more than double our economy growth rate.

To help build an Entrepreneurship Ecosystem government, academia and private sectors need to align and work together on creating a culture where risk-taking and building your business is encouraged. It is about giving access to funding for start-ups and improving ease of doing business. To flourish environment for entrepreneurship, we must need to prepare our young blood. Few of the successful initiatives are Plan9, PlanX and TechHub by PITB and Nest I/O, a technology incubator of Pakistan Software Houses Association. At the corporate level, technology companies are also playing a pivotal role in nurturing Entrepreneurial culture in Pakistan.

IT industry has played vital role in shaping the lives of millions of families abroad and thousands of them in Pakistan. Our skilled workforce has a great potential for software development and export to the world. That’s because the quality of skilled resources and the cost arbitrage than other markets. To remain competitive, Pakistan needs to move up the value chain, counter lack of talent and building a strong country image. It is our Corporate Social Responsibility to act as a conduit of opportunity and create employments in Pakistan, and bring foreign direct investments in Pakistan. We must value our human and social capital and make a strategic investment to develop this today to ensure a bright future for our next generation.

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Mian Bilal

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