Dec 20 - 26, 20

The dearth of skilled and educated human capital is a sad commentary on the management of an economy that bulges with youthful, raw human material.

Woefully low social sector resource allocation, falling educational standards, and lack of sustained vocational and technical training programs are at the back of this dismal scenario. Business and industry play a vital part in turning the raw - both educated and uneducated - material into high-caliber technocrats and high-value skilled human capital.

Unfortunately, inapt fiscal and monetary policies, especially during the last three years or so, have brought the business and industry down to their feet and in the process restrained their capacity to new job creation and human capital value addition. In service sector, besides banking, telecom and IT industries have played an important role in producing quality human capital. Even in the current economic scenario that is showing all signs of stagnancy, these sectors can resume the good work of making qualitative as well quantitative improvements in the wealth of countryís human resources.

Take a look at the excerpts from the Bearing Point Report, September, 2005:

"Today, Pakistan stands at the threshold of historic opportunities and challenges. The process of globalisation fueled by the revolutions in the IT and communication industries, and complemented by the catalytic role of the WTO, seems to have created a truly global market. The vast opportunities offered as a result are that the size of the market, the key determinant of economic development, has almost increased infinitely for every country, whereas the challenges are that the competition has increased by almost the same measure. Fortunately, at this critical juncture, Pakistan is favorably placed and poised with a strong economy projected to grow over 7 per cent with macroeconomic stability and robust fundamentals. The country has a large growing foreign exchange reserve, stable currency, controlled inflation, and increasing tax revenues. With stress on good governance, accountability, and transparency, it looks set for second-generation reforms."

Where do we stand after five years? We have lost all opportunities and are left with the challenges to grapple with. The 7 per cent growth prospects have vanished into thin air; window-dressing through prior-year adjustments is being made use of to arrive at some face-saving growth figures. The foreign exchange reserve level has been maintained, albeit through an emergency IMF fund injection of $8.7 billion (out of the agreed total $11.2 billion).

The stable currency of 2005 stands depreciated by more than 40 per cent. The inflation, after touching a high mark of 30 per cent and then subsiding for a short period, is now again set to make damaging inroads into the poor man's economy. The State Bank, having in its primitive kit the outdated tools of inflation control, has done its best to smother the economy through a persistent hike in the policy rate.

In early 2008, the then Managing Director of Pakistan Software Export Board (PSEB) appeared quite upbeat about the IT sector's growth and future potential. Those were the times when Pakistan was being seen as one of the major industry players. Government policies had been instrumental in attracting foreign investors to the booming industry. The incentives of hundred per cent equity ownership and profit repatriation option coupled with the generous tax exemptions on foreign investment and software export income had been the mainstay of those policies. The IT was being quoted as a $2.5 billion industry with huge potential to expand. There were more than 1,000 IT companies in operation with more than 100 carrying ISO certification. The industry had on its role around 110,000 IT professionals including expatriates from developed countries. The expansion plans envisaged an industry size of $11 billion by the year 2011 and an IT professional force of more than 250,000. Ambitious plans to increase the software export to $5 billion by 2010-11 were also on the anvil. The next two and a half years, however, witnessed dismal economic downslide. The $5 billion software export plans could not see the light of day.

The IT industry in Pakistan still has tremendous growth potential. 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 past status of one of the major industry players is under threat from the changing market conditions and industry's insatiable appetite for new investment. The recent economic changes on the global front and the ensuing recessionary pressures have upset a number of future growth forecasts - IT industry being no exception. Besides resorting to realistic policy formulation, we will have to revise our future targets especially those set in the heat of boom of yesteryears.

In order to effectively meet the threats of globalisation 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 are needed. The dried-up FDI pipeline warrants a shift in focus to domestic market. Apart from enhancing managerial and user base, the IT industry, like telecom industry, needs to be more innovative and dynamic. This can be achieved through the development of synergies with other sectors of economy, for example education, finance, energy, and agriculture. Telecom industry has already developed such synergies; IT industry needs to catch up with its counterpart.

Despite all negative signs and depressing indicators, telecom and IT sector has managed to create job opportunities in line with today's job market realities. A sustained flow of IT graduates from universities and technicians from local training institutes continues to make value addition to our abundant human capital. The job market restrictions may loosen with the passage of time and those waiting in the wing will be absorbed by the vibrant domestic telecom and IT industry. With the marked improvement in global recessionary trends, the foreign job markets are also likely to bid for the high-quality Pakistani telecom and IT professionals.

Unlike real sectors, the service sector is known to have produced more educated and sophisticated human material wherein a lot of value addition has gone. Technocrats and managers from the financial sector and telecom and IT professionals carry a premium and are therefore in much demand in domestic as well foreign markets. A number of top ranking universities in the country are busy in producing quality business, finance, marketing and IT graduates. Most of the multi national companies have targeted these universities for picking up high achievers. The abilities of those high achievers are honed through sophisticated on-the-job training programs after which they are added to the dynamic teams of executives of those companies. The sad aspect of this practice is that those not qualifying as cream of any particular batch of graduates are left at the mercy of domestic job market.

Proper linkages between the job markets and these universities need to be created to save the talented graduates from the throes of unemployment.