IT SECTOR IN PAKISTAN

AROOJ ASGHAR
(feedback@pgeconomist.com)

Mar 19 - 25, 20
12

Various governments in Pakistan have taken keen interest in making the information technology (IT) industry of Pakistan a strong one. In order to promote the sector, the federal cabinet passed National IT Policy in August 2000 under which government would act as enabler to produce an IT based future economy.

It was essentially nineties when IT industry in Pakistan emerged effectively. During the 90s, private sector in Pakistan invested heavily in IT. Pakistani companies have pumped millions of dollars in IT covering procurement of computer hardware, software, and telecommunications equipment from worldwide. Business community is investing in their IT department, presumably in the hope of improving their performance, liquidity, profitability, and quality of professional and personal life.

Pakistan witnesses the steady adoption of IT, which is becoming the source of development of software industry, and later on unprecedented decline in the prices of computer related equipment. The piracy of software is yet another big issue, which needs to be addressed and is hampering software industry of Pakistan.

The success of Pakistani firms and professionals in the IT arena during the last decade has been spectacular. A small portion of population has access to personal computers and the internet and there is an absence of the basic infrastructure that is accessible to the citizens of more advanced economies. Instances of villagers sending and receiving email messages or surfing the internet are an example of how Pakistan is achieving this transformation.

It is expected that Pakistan may have up to one million jobs in the information technology industry and IT exports may grow up to USD10 billion by 2020. Presently, the software industry is employing over 25,000 professionals but the industry is still facing a serious shortage of quality technical and marketing professionals caused by the massive brain drain of high-level professionals and IT trainers from the country.

Over the last decade, Pakistan has developed into a mature and credible information technology outsourcing centre. In addition, IT goods are also becoming an increasingly important type of consumption good in Pakistan and are becoming a profitable and attractive sector day by day. For consumers, purchases of personal computers, personal digital assistants, and wireless telephony are clearly important aspects of the IT revolution. Undoubtedly, this sector is a multifaceted sector, where it further provides a lot of ancillary investment opportunities which in turns contribute in the development of the economy.

The major achievements of the sector include the development and success of the software industry in the country, large-scale computerization and internet usage, IT-based automation in various industries even medium sized local companies etc.

Advancements in IT have put a profound impact on the economy and the quality of human life. The growth of the sector has led to tremendous pay-offs in terms of revenue creation and generation of high quality employment.

Pakistan has lagged behind other regional countries in exploiting IT as a catalyst for economic progress. IT is an area where Pakistan can establish its presence globally with a little sincere effort.

Moreover, it is felt that the explosive growth of the internet and the continuous wave of e-commerce still provide immense possibilities for Pakistan to exploit their potential and use these for accelerating its economic revival.

In order to achieve sustained growth in the IT sector and maintain Pakistan's existing presence in the field, high quality professionals in adequate numbers are required. The software industry needs to move up the value chain by developing high value products through R&D.

Software firms also need to tie up with the extensive R&D network of the other countries and later develop own R&D network. In order to ensure long-term sustained domestic growth and exports, the software industry needs to move from being software solutions providers to manufacturers of packaged products. Continuous improvement in productivity will also help the Pakistani companies in getting new orders worldwide.

In short, three vital inputs are needed at the moment: i) sustained improvement in the quality of products and services, ii) availability of high quality manpower and iii) strong R&D support.

IT has the potential to make existing processes more effective and efficient, but cannot substitute for the lack of a basic infrastructure.

Time has changed since the inception of IT sector in Pakistan. Now millions of people are using internet, computers, and software either developed by foreign companies or pirated. One of the best things happening in IT sector is the awareness among people about the need and requirement of IT, which in turns transforms this awareness into business for the industry. Due to this trend in society, economists expect to get few billion rupees from the export of software and IT related services.

The growth of the IT sector in Pakistan symbolizes the potential of the industry to perform at world-class standards. Led by some visionaries and supported by thousands of employees and businessmen, the IT sector embodies much of what can go right when the spirit of human enterprise is given free rein. In the last few years, a lot has been done to enhance the IT sector in Pakistan mostly by private sector.

The government of Pakistan has, over the last few years, also granted numerous incentives to technology companies wishing to do business in Pakistan. A combination of decade plus tax holidays, zero duties on computer imports, notional sales tax, government incentives for venture capital, and a variety of programs for subsidizing technical education are initiated in order to support the IT industry.

Government is also providing relief to companies by decreasing bandwidth prices and arranging for easier access to internet but above all the most critical aspect is the opportunity to strengthen the software industry in the private sector.

Government has recognized that IT industry is one of the most important sectors in days ahead but the right size of the sector has not yet been determined. It wouldn't be wrong to say that time is running out and our policy makers have failed to tackle the challenges facing this industry.

Though various governments have taken numerous measures for the promotion of IT sector in Pakistan, yet a lot is required. The areas where work can be done include ensuring the sustained growth of software and IT enabled services and increase Pakistan's share in the regional and global IT market as well as expanding the domestic market, putting in place a policy framework to make Pakistan a major force in the hardware manufacturing sector, greater use of IT in governance, bridging the digital divide, promoting the development of software in local languages, and improving the quality of manpower, skills and research and development in the sector.

In order to build brand equity and positioning Pakistan's brand abroad, large investments in marketing and brand building is required which is not possible without the support of the government. Government should play its part and foreign mission of Pakistan should act as an agent and grab the opportunities for the local companies.