PAK LOSING GROUND IN IT WORLD

KANWAL SALEEM
(feedback@pgeconomist.com)

Mar 19 - 25, 20
12

Though Pakistan has achieved a remarkable progress in the field of information technology during the last few years and entirely changed the mode of national life, yet the country could achieve more progress.

Pakistan rankings are not improvising as a result of inadequate functionality upon indications of total organization setting, legitimate atmosphere as well as government assistance with regard to the IT sector development.

The total size of the information technology sector is estimated US$2.8 billion in the country, which can cross US$5 billion mark within one year, provided payment gateway facilities are available in Pakistan.

IT sector has made much progress during the last few years but still a lot of room exists for making further advancement.

According to a report, Pakistan is losing ground in IT in the comity of other states.

Up-to-date to the 4th period since 2007, the Index benchmarks 66 countries on the group of indicators within the essential basis areas for IT development: general enterprise atmosphere, IT facilities, human capital, research and development (R&D), legal environment and public support for industry development.

"This isn't a good indication with regard to Pakistan's IT sector. The IT sector utilizes a lot more than 12,000 experts using the rate of growth of virtually 41 per cent although creating more than $2 billion each year in taxes earnings. It might advantage almost all when we goal higher for an additional year's index," experts believe.

According to them, in countries where software, hardware, or IT services are generated in abundance, the contribution to gross domestic product (GDP) is upwards. In many countries, the IT sector has also been a major source of labor productivity growth. No wonder, then, that many governments have invested considerable energy in recent years to encourage the growth of local IT producing industries.

The World Economic Forum has been releasing global ranking of individual countries annually under the global competitiveness index (GCI).

This year Pakistan ranked at 101 position out of 134 countries surveyed by the forum. Pakistan ranking of GCI during the last two years was 97 and 83 respectively.

Competitiveness is generally defined as a set of institutions, policies, and factors that determine the level of productivity of a country. This negative position sends a wave of concern to all stakeholders in Pakistan.

Experts say that there is a need for a deeper re-look and paradigm shift in the industrial policy making processes and reforms by adopting tools which otherwise are tested and proven right in many competing economies.

"Identifying strategic areas of development and embarking on more value added and high tech industries alongside the competitive development of existing industry in order to achieve sustained IT growth in the country, the government needs a mechanism for rewarding entrepreneurship, innovations, risk taking, R&D, best ideas and best practices by undertaking review of bankruptcy laws, investment policy, regulatory and procedural requirements," they said.

Pakistan's IT industry has gained limelight as its foreign investors are seeking healthy opportunity to work with local software houses and service providers as shown by the substantial inflow of foreign investment in the country.

State Bank of Pakistan (SBP) statistics said the Foreign Direct Investment (FDI) in the IT sector witnessed growth of 120 percent, attracting capital of US$9.4 million in the first fourth months of the fiscal year 2011-12 compared with corresponding period of previous year. The FDI inflows were recorded in software development with US$6.5 million; IT services with US$1.8 million and hardware services with US$1.1 million respectively.

Despite lots of challenges, local IT companies and foreign companies with their subsidiaries are tapping potential of local market in various fields including software programming, mobile applications, networking services and hardware production.

Foreign companies having offices in Pakistan are trying to scale up their business with expansion of their networks and production volume, businesspersons said.

Hence, the FDI witnessed handsome growth in the current fiscal year and a business volume has been increasing with number of employment in the IT sector.

According to Securities and Exchange Commission of Pakistan (SECP), 83 companies, having comprehensive authorized and paid-up capital, were listed in the four months of current fiscal year (Jul-Oct 2011) in Pakistan.

It is worth mentioning here that companies listed with SECP in IT sector are highest in numbers among all the listed sectors. Most of the IT companies are listed as private corporations with medium sized operation footprint. These are local and foreign companies and mainly based out of major cities including Karachi, Lahore, Islamabad, Faisalabad etc.

The year 2011 saw a number of positive developments in Pakistan's information and technology (IT) industry, from app developments to global recognition and a series of awards.

The Pakistan Fast Growth 25, a ranking of fast growth companies, listed 10 IT companies on its index. The Pakistan Fast Growth 25 is a program of the AllWorld Network in partnership with Harvard Business School Professor Michael Porter, launched in collaboration with JS Bank Limited. Some of the achievements are as under:

OFFICIAL GAME FOR ICC 2011 CRICKET WORLD CUP

Local development company, Mindstorm Studios developed the official game for the ICC 2011 Cricket World Cup. The browser-based 3D game, "Cricket Power" features all 14 official teams along with players, stadiums, and kits.

PAK-INDIA ICT FIRMS TO ENHANCE TRADE UP TO $5BN

Pakistani and Indian IT committees held bilateral talks separately on both sides of borders in March - aimed at enhancing trade ties in the field of IT. In the talks, both countries agreed to boost mutual trade in the IT sector by $5 billion through joint ventures, investment, and exchange of expertise.

NETSOL DEAL IN INDIA

Local ICT Company Netsol engaged with Indian companies to provide applications for financial services. It signed an agreement to sell its product "Netsol Financial Suite" to a global auto leasing company operating in India.

GOOGLE GRANTS TO SOCIAL INNOVATORS

In another first for Pakistan, Google has granted seed money to a local association for social causes. Google granted $250,000 to Pakistan Software Houses Association that launched Pasha Fund for distributing the amount to talented innovators. So far, four individuals were selected to receive funds.

PEPPER.PK MOBILE APPS TRIUMPH

Local app developer, Pepper.pk, hit the number one spot in Blackberry App World. Their application, LED Notifier Pro, has been immensely popular since its launch and ranked among the best selling Blackberry applications in the world. Additionally, their app, Photo Editor for BlackBerry has occupied the number one rank on App World twice in the past three months.

TENPEARLS WINS NOKIA CONTEST TWICE

Pakistani IT firm TenPearls marked another record, beating out 800 entrants to bag second position and received a $50,000 cash prize at 'Nokia & AT&T Innovators 2011 Contest'. This is the second award TenPearls has received for its mobile app named "Animal 101 within a year. Their first award was first prize for their app uTrack mobile earlier in 2011 for the same platform in Pakistan.

PAKISTAN SHINES AT APICTA

Pakistan was declared the winner of two gold and five silver awards at the 11th annual Asia Pacific ICT Awards (APICTA) 2011 in Patted, Thailand . Pakistani firms secured two gold awards in the e-health and e-logistics and SCM categories and five silvers in the communication, financial, security, e-inclusion and e-community and e-government categories.

IT industry flourished in 2011. Experts believe that 2012 will be even better, if the country continues producing quality professionals. The industry managed a growth rate of 15 per cent in 2011, despite facing multiple challenges in the domestic and international arena, and the economic depression, which has hit nearly every country on the surface of the earth.

Despite challenges in the domestic arena, the country's negative perception in the West, rising tensions between Islamabad and Washington and the global economic slump, the industry has shown steady growth, they added.

Experts are optimistic for a brighter future of Pakistan's IT industry. They, however, urged local institutes to raise their standards and provide good quality individuals, so the industry continues its rising trend.

They said there exists tremendous talent but the institutes need to produce high-quality graduates to meet growing demand both locally and internationally. If we can do better at producing quality professionals, we can certainly grow beyond 20 per cent.