STATE OF IT & TELECOM SECTORS DURING 2007
TARIQ AHMED SAEEDI — (firstname.lastname@example.org)
Dec 31, 2007 - Jan 06, 2008
Information Technology industry of Pakistan is growing at a rate of fifty percent per annum since last four years. It can grow much faster provided skilled talents. Human resource is a major issue being confronted to IT companies in Pakistan. Better is to entitle IT as a sector instead of an industry for stakeholders preferably call it. Because of, they [esp. domestic IT companies] are not reportedly given industrial privileges. The nation has witnessed a historical growth in telecom sector as well. Be it landline telecommunication or wireless, the business has turned out to be lucrative for both local and international companies. The saturation of cellular phone industry swallowed in a significant market share, composed of overwhelmingly consumers. So far only possession of cellular phones enumerates over 70 million nationwide. Although currently Pakistan's IT industry stands at as low as US$ 2 billion that includes local and export receipts we should consider a contextual analyses of the industry of Pakistan. Given the low scale of operational efficacy of Pakistan's IT industry, we can not compete for instance with India. There are forty thousand workforce employed in call centres alone across India. However, the amount they earn per person is very low. Aggregately, there IT sector is more revenue generating. In terms of software products, Pakistan produces quality better than any regional competitors. Insofar as other fields of IT sector, software houses of the nation are also producing very sophisticated products. Some of IT companies are so efficient in quality deliverables that they attract foreign businesses. One of the local IT companies in its initial year of operation even succeeded in leading international blue tooth clientele such as Vodafone. Evidently, clients are satisfied with the quality of products. These companies are attracting businesses from Europe, Australia, and Far East countries. Adoby group (designer of range of Adobe products) has invested in a company located in Islamabad as it found company's product stunningly innovative.
While, in market situation is abysmally reverse in terms of IT institutes and universities which produce workforce needed for the sector. In Pakistan Information Technology is being misunderstood as sagging sector. Parents are disgruntled to adopt for their kids IT as a favourable profession. Therefore, they suggest their kids to take banking and finance, medical, and engineering fields as primary options of career rather than IT. It is thought jobs are no more available in the sector. Basically, the prevailing misperception was rooted far back in the collapse of IT sector in the US in year 2002. Undoubtedly, that hit all along hard! But, now scenario has been changed at 180 degrees. The radical frame of mind has damaged the sector a lot causing snowball reactions on other related activities. There is a dire need to abridge information gap and to educate people that they can pursue an attractive profession in IT field far better. It is noteworthy that Telenor Pakistan launched telecom futures-a training program-in collaboration with Nokia, Siemens, and Technical Education & Vocational Training Authority, GoP in the mid of last year. Having realized that vocational training institutes should seek human capital from the lower socioeconomic classes and there is a huge opportunity to help them get their fair share, the program aimed at building on TEVTA's HND in telecom by aligning curriculum with current expectations, providing advanced trainings and rewards to teachers, sharing specialized equipment with students, and offering internships or jobs to suitable diploma holders. The target was to create a measurable model for large-scale implementation. Such a model could improve the level of human resource created locally, and increase the employability of vocational diploma holders.
On a similar line, PASHA has been organizing job fairs in all over the country for three years to build a coordinating bridge between IT employers and job seekers. The job fairs provide a career counselling plate form to both of them to exchange ideas and knowledge. Sometimes, it was evident in such an occasion that over 30 vacancies were announced simultaneously by an IT company. Likewise ICT Award is a contest among local companies wherein awards on various categories including entertainment, finance, etc. are conferred to the best performer. Winner of the award is subsequently acknowledged to participate in the regional ICT Asia Pacific award. In a recently held ICT Asia Pacific Award in Singapore two Pakistani companies won awards for designing best communication and financial applications among 180 vying contestants hailing from across the region. That implies that Pakistan's products are more superior to regional competitors'. Judges around the region selected local presentations as best following a stiff brainstorming session during the award. Nine different software companies participated from Pakistan.
Equally important issue is our education standard which is not up to the mark. In subsequent effects, companies have to retrain pass-outs for six months to make them adaptable to practical working requirements. PSEB has documented an internship programme in which it would pay Rs.3000 per month to each internee while IT companies train them. But, this amount is too meagre to attract talents. There are very few institutes which are creating in-working-condition lots. Their learning is limited to broad perspective of IT sector and thus misses specialized concentration on a particular subject. Despite national youngsters are very talented the need is to hone their skills and to advance them to create world class designs. Nevertheless, education starts from primary and secondary level, to resolve this problem HEC needs to format and revise IT curriculum to integrate ongoing dynamics. IT is an ever changing sector. Ministry of IT started Outreach Programme (IT training programme) in collaboration with well reputed universities and institutes of Pakistan in suburban areas. The outcome was remarkable as trained lots outperformed those of living in urban areas and that was so within the limited training exposure. Sindh IT Board is dysfunctional and contributing nothing to change the perspectives. Government should be serious in this regard. There are 90 million young people in the nation. They have to be educated right away to drive and sustain growth in IT sector.
Microsoft and some other large companies are selling their products at low price in China, India, and other countries than in Pakistan because of rampant piracy. Growth of IT sector of Pakistan is dependent on strict enforcement of IPR. Intellectual Property Right and Act should be glanced at in two ways. The software, which IT companies are creating, should not be pirated because they labour considerable number of years for final designs. International software should not be pirated either. However, IT companies should also understand that they should determine price in accordance with the local market.
Fund generation remains an obstacle in the growth of IT in Pakistan. Since IT companies of the nation are small they can not list scrip into bourses. They initially need funding to grow to a particular financial capacity prior to move to exchanges. There has to be a certain paid-up capital required. So far, only two companies are listed: Netsole and TRG. Most companies have been set up with personal funds. Banks have fears to fund software companies because there are no collaterals. Financial institutions require tangible securities against loan. As there are no such securities, IT companies often could not avail this main source of financing either. The reason could be instability of products' price in the market. But, by not sanctioning loans they actually don't value intellectual capital (that is also a security but intangible). Some of the banks have perhaps realized to bring changes in their criteria due to revival of IT sector.
Government offers tax incentives to IT exporters. But, most of the companies are only able to export after they grow to a certain level. Till then, they have to pay all taxes. Tax incentives are only for exporting products not for domestic ones. IT companies have to pay more in lieu of electricity bills than any other same-sized company because of high usage of computers and allied machineries. Government paid 80 percent fees of CMMI certification to have subsidized only five IT companies out of 900 operating across the nation. CMMI certification is like ISO but for IT companies. Government partly pays booth rent of international exhibitions supporting companies pecuniary. Bandwidth is still more expensive in the region despite its rate has come down recently.