IT INDUSTRY AND PROSPECTS
SUMAIRA FAZAL, firstname.lastname@example.org
Aug 04 - 10, 2008
In a recent era life is moving at a very brisk pace, cutting down practical and emotional anomalies, thanks to increasing automation. All over the world, IT industry is on the verge of fast-track growth, with a bit higher pace in emerging markets. Information technology is driving technological and economical advancement to the developed as well as emerging economies. The IT and IT-enabled Services (ITES) marketplace offers lucrative opportunities for developing countries to join the ranks of developed world. The scale and pace of growth in this sector is much faster than in any other industry, and a number of developing countries are attempting to emulate the success enjoyed by the ones who have already achieved a certain level of technological advancement.
Pakistan witnessed a tremendous growth in IT sector, though the rate of growth seems to be a bit slower in recent period compared to what evidenced in previous years. This has been possible on account of many-fold catalysts such as, ongoing privatization spree in the country leading towards infrastructure improvements, foreign investment in various industries and of course the most importantly the support on legislative fronts. The government of Pakistan, being cognizant of the fact that IT is the key driving force in the new millennium, has been proactively developing the IT sector in the country since last few years. The government has chalked out IT Policy and Action plan, which envisages (i) human resource development leading towards development of large pool of academically as well as technically skilled manpower, (ii) infrastructure development, establishing a series of IT parks and Incubators across the country, (iii) software and hardware industries' development, (iv) undertaking IT promotion and awareness campaign and (v) Increased IT usage, that is to embark upon an aggressive program to improve efficiency and to provide quality service, IT would be inducted at all levels of government. Key projects thus launched would include electronic government project and E-commerce network. In addition to that strategy, the government has given various incentives to the industry, including tax exemption till 2016, foreign ownership of equity invested in IT and 100% repatriation of profit allowed to IT companies.
In Pakistan, IT sector has played vital role in economic growth, being one of the major contributors to export growth. Currently, over 1,215 IT companies are registered in the country, along with 60 foreign IT and telecommunication working here. The total industry size has outstripped to US$ 2.8bln mark, with IT and ITES exports reaching at US $ 1.4bln. It is significant to note here that Pakistan IT export growth in each of the last few years has been more than 50%. There has been growing trend in number of universities offering IT and computer sciences programs, with IT professionals being more than 110,000 in the country. While we have achieved hefty growth in this sector, this has not happened overnight. The growth and revenue thus generated were the outcome of years of efforts, of course the recent years showed more positive signs. Given the fact that Pakistan still lags behind developed and many emerging economies on technology front, there is ample room available for future growth in this sector, looking ahead. This suggests higher exports as well as tremendous opportunities for employment as well.
Strategically located in South Asia, Pakistan is at the crossroads between eastern and western Asia. Pakistan's geographical location, a rapidly expanding transportation and communications infrastructure and an environment conducive to business makes it an attractive destination for investors. Our country is fast becoming the destination of choice for a significant number of international IT/ITES companies looking to relocate their operations offshore. The ready availability of skilled professionals, an appropriate IT infrastructure, and affordable rates for connectivity result in considerable time and cost savings for entrepreneurs.
Although we are earning handsome amount of revenues by exploring opportunities in IT sector, yet there are lot of untapped areas which can provide ample income stream. Business Process Outsourcing (BPO) is an emerging concept that gives numerous cost advantages over the conventional in-house development. Pakistan has a large untapped labor pool of English-proficient graduates willing to work at wages substantially below their US counterparts. Moreover, consolidated operating costs are estimated lower in Pakistan as compared to other regional countries. Pakistan has one of the fastest growing cellular industries in the world, which provides numerous opportunities to excel. One of the major advantages Pakistani people possess is their clear voice and accent, which places our country on strategic position in terms of employment break-through. On e of the largest offshore controlled companies, The Resource Group (TRG) is also operating in Pakistan. Its business consists of taking controlling stakes in business services companies in North America and Western Europe, and repositioning them for growth using a global service delivery model. TRG also provides offshore back-office services such as finance functions, software development, data processing, IT helpdesk, marketing and administrative support. Other emerging opportunities that can contribute towards sector growth as well as growth in earning streams are: Enterprise resource Planning (ERP), the most demanding software solutions to provide any client that involved the complete automation of the customer's company processes; gaming and Convergence.
While we are optimistic about our IT sector, given the growth trend witnessed in the past, when we analyze the ground realities, we may come up with another point of view that the overall progress is a bit little and late. Although call centers have been one of the key driving factors behind the industry growth, they are not being given as much attention as this area need actually. There is nothing wrong in being optimistic, but there seems some doubts as to call center are here to stay as the legislators seem a bit lazy / ignorant about tapping the possibilities arising form this area. Why Pakistan is not picking up the much needed growth is because for any international call center operations, the nerve is telecom link. In Pakistan the weakest support one has is the telecom link (PTCL). Moreover, the cost of utility is so high that the more you use the more you pay. So going forward, there is high need to develop right strategies covering, developing IT enabled infrastructure, good human resource, creating vibrant image of call centers and spreading maximum awareness, and above all providing sufficient governmental subsidies to promote the industry. Our country has the potential to be at par with other fast developing countries like India, if we work on the above discussed points at even a less than 100% of our capacity.
Going forward, the government is eying at tapping growth opportunities in IT sector, with major objective to enhance Pakistan software exports. Pakistan Software Export Board (PSEB) has proposed a four-year draft strategic plan, which is aimed at increasing the industry size to US$ 11bln till the calendar year 2011. Eight strategic areas with missions and annual targets have been identified, which include facilitation; human resource development; industry finance; marketing; office space provision; public policy; quality and telecom bandwidth provision. Given the fact that Pakistan possesses certain advantages which can play a significant role in tapping areas in telecom sector, the overall IT industry is set to grow further. With a little bit of more attention by regulators, our country can earn pretty handsome amount of revenues, supporting by foreign influx via exports.
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