Pakistan has lagged behind other regional countries in exploiting Information Technology as a catalyst for economic revival.

SHABBIR H. KAZMI, Special Correspondent
Dec 18 - 24, 2006

Pakistan's economy is still largely based on the low-tech, low-value added industries that have long been fully mechanized and running very efficiently in developed nations. In order to put its economy on track to compete with the growing economies of the world, Pakistan needs to quickly take steps to train and bring its workforce to the international educational standards, incorporate new technologies and modern management practices into its existing industries, and bring intense focus on building an information-based economy by upgrading the technical and managerial skills of its people.

Information Technology plays an important role in the economy of developed and developing countries - upgrade their economies and become competitive in the global market place. The IT-based economies have streamlined the most complex economies of the world and enhanced the productivity at various levels where an economy such as that of the US has wriggled out of the entire trillion-plus dollars national deficit and turned into a surplus in recent years.

To compete with the growing economies of the world, Pakistan needs to educate, train and bring its workforce to the international educational standards, incorporate new technologies and modern management practices into its industry, and bring intense focus on building an information-based economy by upgrading the technical and managerial skills of its people.

Information Technology is the key enabler of change in today's rapidly evolving business climate. This technology has emerged as a very fast growing sector in Pakistan. With continuous and concerted patronage of the government, there has been unmatched development in IT infrastructure. IT revolution has changed the lifestyle of people throughout the world. It has eliminated the geographical distances and due to advanced communication facilities, the entire world can be viewed on computer screen by just a click of a button. Pakistan has modern telecommunication system, highly skilled and relatively cheap workforce. The government is making sizeable investment in the IT sector and a huge chunk of this budget is meant for human resource development and provision of enabling infrastructure. Ministry of Industries and Production is determined to facilitate the industrial sector of Pakistan, including information technology.

Pakistani IT industry is ready for a major take-off based on its initial success and people are preparing for a major boom in the coming years when IT becomes the engine of growth for the country's economy and the overall IT horizon will become extremely attractive from a business perspective. Instead of venturing into Information Technology as a new business, Pakistan is deploying the technology to improve its existing core business. Industrial automation and control is the real time application of IT. It comprises input devices, information processing and decision-making and Human Machine Interface and network devices (PCs) and output devices. By deploying the strategic use of IT business potential, efficiency is being increased.

The market of Pakistan today buzzes with IT activities and the current boom in IT dates back to early 1996 with the introduction of Internet which opened up a communication channel between Pakistan and rest of the IT world and there has been no looking back then since. Not only the Internet services a healthy and growing activity, the number of companies involved in various facets of IT have outnumbered growth in any other sector, which has had such a short life span of existence.

According to conservative estimates, there are hundreds of software houses based in Pakistan which are busy in developing and exporting software to the developed world in areas as diverse as Database management, Internet applications, e-commerce, CAD/CAM management systems, etc. The fields in which these companies are involved are virtually unlimited. More and more opportunities are being thrown open to them by every passing day as their skills, potential and strategic advantages are getting accepted in major software markets around the world including, but not limited, to USA, UK and the rest of Europe, South Africa, Japan and Australia. But this is only the tip of the iceberg, as vast potential still exists for the local IT industry to become a formidable force in the global arena. The government is taking all possible measures to spur activity in the IT sector and the framework is now more conducive than ever before for investments in the sector.

The cost of Internet bandwidth of PTCL was reduced which has led to reduction in Internet end user prices and improvement in quality of service for the Internet users. Free Internet connections are being extended to public sector universities under an agreement with the private sector ISPs and PTCL. To facilitate the private sector IT and telecom industry and to enhance the investor's confidence in the government, processing period for license applications in the deregulated sector by the PTA has been reduced to 7 days from several months. In order to deliver efficient IT infrastructure, PTCL would now provide international bandwidth and Internet connectivity to the ISPs and other corporate customers within 4 to 8 weeks. Previously this connectivity used to take 4 to 12 months. To promote Electronic Commerce in Pakistan, the State Bank of Pakistan (SBP) has allowed the opening of Internet Merchant Accounts within Pakistan, the first step towards e-Commerce. The Electronic Transaction Ordinance 2002 has been promulgated. This provides legal recognition to digital signatures and electronic documents as well.

Ministry of Information Technology has taken a number of initiatives for the promotion of Information and Communication Technologies in Pakistan. This includes initiatives for promotion of e-Government; training of government employees in the use of IT technologies, software industry development programs, institutional strengthening programs and IT related Human Resource development programs.

The electronic communication and office automation of different government offices and ministries have been started which includes development of application and database, linking ministries & divisions through MIS, development of the basic I.T infrastructure and I.T skills. A number of projects on the electronic government and automation of government offices have been initiated.

The provinces are facing lack of availability of technical expertise as a serious bottleneck in their effort to come up with IT projects. Keeping in view the difficulty of the provinces, a project has been approved, which will address the issue of shortage of manpower in the IT departments of the provinces by placing services of business analysts in the provinces on a full time basis.

For the development of Urdu language software extendable to regional languages, a project for the development of Urdu component, development of English-to-Urdu machine translation component, development of Urdu TTS component, development of online Urdu dictionary, development of online text translator, development of Urdu e-mail and website reader was initiated. The National University-FAST, Lahore, is implementing this project.

Pakistan has lagged behind other regional countries in exploiting Information Technology as a catalyst for economic revival. However, the explosive growth of the Internet and the coming tidal wave of e-commerce still provide immense possibilities for Pakistan to exploit their potential and use them for accelerating its economic revival. Pakistan and similar countries hoping to exploit the inherent potential of Information Technology must act immediately and decisively to restructure their domestic Information Technology industries to become effective role players within the global IT scenario.

Any meaningful IT initiative in Pakistan will necessarily have to be a partnership between the government and its agencies on one hand and the private sector on the other. Bold, unconventional and strategically correct decisions are needed. Effective top managers with the right mix of vision and managerial competence are needed. Huge amounts of financing are needed in domestic resources and foreign exchange.

The major problems of the IT industry in Pakistan are:

  • Massive brain drain due to underpaid IT professionals.

  • Serious shortage of experienced programmers and IT professionals needed in the latest technologies.

  • Inability of Pakistani firms to tap and penetrate lucrative foreign markets to provide the IT industry with needed band-width and communication capabilities of international standard at competitive prices.

  • Lack of entrepreneurial skills and managerial know-how of IT professionals.

  • Lack of actual and practical government policies and support for the industry. IT industry faces serious problems in securing finances and credit.

  • Unwillingness of local business managers to pay appropriate prices for locally developed software.

  • Lack of incubation facilities to start-up the companies.

  • High resistance for computerization of the government and its departments to avoid transparency.

  • Political instability resulting in economic stagnation.

  • Lack of progress in institution building.

  • Lack of awareness in the government administration, bureaucratic hurdles and lack of political will.

  • Budgetary constraints in government departments and educational institutions, especially in schools & colleges. Indifferent attitude of majority of industrialists about IT.

  • Misuse of information technology computers being used for chatting, pornographic surfing & audio/video songs.

  • Very high fees of IT institutions.

  • Lack of co-ordination among industries and academia.

  • Lack of low level infrastructure development.

  • Lack of long term business approach.

  • Lack of timely compliance in meeting the targets.

  • Lack of attention towards maintaining the quality.

  • No attention towards transfer of technology.








160 million

USD 0.6 billion

USD 1.35 billion


1.1 billion

USD 23 billion

USD 13 billion