THE DRIVER OF INDUSTRIAL GROWTH
SHAMSUL GHANI (email@example.com)
Oct 05 - 11, 2009
IT industry in Pakistan has tremendous growth potential. 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 capital in line with the international standards and by swiftly switching over to the changing technologies. Our present status of one of the major industry players shall ever remain under threat from the changing market conditions and industry's insatiable appetite for new investment.
In comparison to India, our Information Technology market is quite small yet it is growing at a reasonably fast rate. Pakistan's IT sector produced export cash inflows of $184 million in 2008-09 as against an export cash inflow of $154 million in the previous year. We are also working on an ambitious plan to dramatically increase the software export by 2010-11
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 because of insufficient investment in software. Pakistan Software Export Board (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 country's 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 that is vital for the running of a company on an on-going basis.
To meet effectively 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 work force. Our human resource is both our weakness and strength. We have abundant young and intelligent work force that unfortunately lacks formal education. To expand the industry, we not only need sufficient skilled and educated work force but also a well-educated user base. This is a difference between IT and Telecom. Someone with a weak educational background can conveniently operate a cell phone, but to operate computer or to use internet, one has to be sufficiently educated.
Those who talk of creating awareness with reference to IT should realize that the neglected education sector should have to be taken care of first. In addition, given the culture we are living in, it is a daunting ask.
OBSTACLES IN IT EDUCATION
The two main obstacles on the road to education are low resource allocation and gender bias. We cannot claim to be educated unless the fifty percent (or even more) female population is given equal rights to education. From the standard of today's world, only those proficient in computer literacy besides necessary formal education can be entitled as literate in true sense. 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 substantially to produce a nation of educated people who, besides broadening the IT user base, could become the future managers of this all important industry. Government's recent commitment to raise budgetary allocation for education from the last nine-year average of 2.13 per cent to 5 and then to 7 per cent of GDP within a few years' time seems nothing more than wishful thinking. It is just like bringing the prices back to 1990 level!
To produce computer literate human raw material, we will have to begin work from grass root level. This raw material can then be used to produce skilled IT technicians at college and university levels. Government organizations like PSEB coupled with similar private sector organizations can hone these technicians to the status of high caliber IT professionals. PSEB's ongoing programs like IT Industry Apprenticeship Program, Corporate Training Program and IT Industry Internship Program can go a long way in meeting the growing industry's human capital demand.
As a much needed and welcome step, the government has embarked on a program to introduce within three-year time computer education at middle level - from class VI. This is practicable and should be implemented within the given period. This measure at grass root level will not only result in overall enhancement of IT literacy but will also reduce the impact of gender divide. With the fast expanding IT industry, the requirement for properly skilled human capital will keep on growing. According to an old PSEB estimate, the requirement of IT human capital was to follow the pattern given in the table.
|IT Industry Human Capital (Exports)||10,000||16,569||27,615||46,025||76,709|
|IT Industry Human Capital (Domestic)||25,000||33,250||44,223||58,816||78,225|
|SECP Registered Public, Private Companies||25,000||27,500||30,250||33,275||36,603|
|Requirement According to Skills Set||2005-06||2006-07||2007-08||2008-9||2009-10|
|IT Human Capital - High End||24,000||32,005||44,247||63,225||93,119|
|IT Human Capital - Middle of the Road||34,000||40,814||49,832||62,013||78,842|
|IT Human Capital - Low End||32,000||37,500||44,309||52,808||63,500|
Any latest PSEB update on this estimation exercise is not available to study the extent of variance, if any, and analyze the causes thereof. As a sequel to the global job market recession, the IT industry job conditions in Pakistan have also deteriorated. PSEB will do well to compile a paper on latest job position and demand and supply conditions with reference to this potentially important industry.