IT EDUCATION SECTOR - IN NEED OF A BOOST

SHAMSUL GHANI (shams_ghani@hotmail.com)
Aug 04 - 10, 2008

Pakistan is seen as one of the major IT industry players. During the last 4-5 years, government policies have been instrumental in attracting foreign and local investors to the booming industry. The present political instability notwithstanding, the sector is estimated to attain a $9 billion global export revenue target in 2009-10, as projected by Pakistan Software Export Board, PSEB in its IT Industry Review 2007:

Billion US $

 

2005-06

2006-07

2007-08

2008-09

2009-10

Global IT Export Revenue

0.600

0.960

1.584

2.640

4.400

Domestic IT Revenue

1.400

1.862

2.476

3.294

4.381

Total

2.000

2.842

4.060

5.934

8.781

Export Rev. % increase

 

65%

67%

67%

67%

Domestic Rev. % increase

 

33%

33%

33%

33%

Total Rev. % increase

 

21%

43%

46%

48%

The incentives of hundred per cent equity ownership and profit repatriation coupled with the generous tax exemptions on foreign investment and software export income have been the mainstay of government policies pursuing an ambitious growth plan. Presently, IT is a $2.5 billion industry with huge potential to expand. There are more than 1,000 IT companies in operation with more than 100 carrying ISO certification. The industry has on its role around 110,000 IT professionals including expatriates from developed countries. Land in the PSEB designated IT parks has been leased out to the country's IT companies for business purpose. The expansion plans envisage an industry size of $9 billion by the year 2009-10 and more than 230,000 IT professionals. Whether the PSEB targets will see the light of the day, remains to be seen.

IT INDUSTRY PROJECTED HR REQUIREMENT (PSEB REVIEW 2007)

 

2005-06

2006-07

2007-08

2008-09

2009-10

IT HR Export

10,000

16,569

27,615

46,025

76,707

IT HR Domestic

25,000

33,250

44,223

58,816

78,225

Public Sector

25,000

27,500

30,250

33,275

36,603

SECP Registered Cos

25,000

27,500

30,250

33,275

36,603

Education Sector

5,000

5,500

6,050

6,655

7,321

Total

90,000

110,319

138,388

178,046

235,459

In comparison to India, our Information Technology market is quite small, yet it is growing at a reasonably fast rate. The industry is presently producing 5,500 business graduates annually which does not match the projected future requirement vis-‡-vis the ambitious growth targets set by PSEB. Added to this is the absorption problem as companies are always on the look out for experienced hands. PSEB has taken to handle this paradoxical problem through match-making process while acting as a link between the industry and the educational institutions.

IT industry in Pakistan has tremendous potential to grow. It can generate high remuneration jobs for IT professionals. The growth rate of world IT industry is 8 per cent with a forecast to have a market size of $900 billion by 2010. To survive in the fast pace growth scenario, we will have to be extra competitive by developing human resources in line with the international standards and by swiftly switching over to the changing technologies. Our present status of a major industry player shall ever remain under threat from the changing market conditions and industry's insatiable appetite for new investment. What is required is government's policy support to the industry which needs yet more incentives to prepare for the future challenges.

In pursuance of the national IT policy, the government has launched programs to create IT awareness especially among the people of smaller cities and towns. It has also provided incentives in the shape of reduced computer costs as well as services user cost. The productivity of the sector nevertheless remains low in the face of insufficient investment in software. PSEB has announced various incentives for the IT industry which include access to the venture capital, strengthening of equity base and promoting of entrepreneurial culture of international quality. Presently, only a few IT companies are listed on the stock exchange. To give a boost to the industry, the listing of IT companies on countryís stock exchanges shall have to be substantially increased through meaningful incentives as well as regulatory measures. This will not only pave the way for the much needed additional investment but will also result in the broadening of ownership base so vital for the running of a company on an on-going basis PSEB has offered 75 per cent reduction in the consultancy fee for IT companies planning to go for an Initial Public Offering (IPO) to make themselves eligible for stock exchange listing. Perhaps this is not enough and some more incentives need to be offered.

To effectively meet the threats of globalization and multi-faceted competition, we need a broad based expansion of IT industry, new investment of both domestic and foreign origins, and a sustained generation of skilled and educated manpower. Our human capital is both our weakness and strength. We have abundant young and intelligent manpower lacking in formal education at the same time. To expand the industry, we not only need sufficient skilled and educated manpower but also a well-educated user base. This is the difference between the IT and Telecom Industries. A cell phone can be conveniently operated by someone with little knowledge of English or even by an illiterate. But to operate computer or to make use of internet and related services, one has to be formally and sufficiently educated. Those who talk of creating awareness with reference to IT should realize that the neglected education sector shall have to be tackled first. And given the culture we are living in, it's a big ask. We often boast of having a literacy rate of 50 per cent or so. Such estimates are self-defeating exercises. We need to be realistic. Those who can just write their names can never be designated as literate people. From the standard of to-day's high-tech world, only those adept at computer and internet use can rightfully claim to be from the educated lot. The only way out is to raise our real literacy rate on a war footing. The spending on social sector, particularly education shall have to be increased many fold to produce a nation of educated people who, besides broadening the user base, could become the future managers of this all important industry.