PROMOTING ENTREPRENEURSHIP IN ICT SECTOR
TARIQ AHMED SAEEDI
Feb 6 - 12, 2012
Ability of information and communication technology (ICT) sector in turning around the economy of Pakistan generally and improving the public living standards particularly is unutilized. If the potential of this sector is tapped adequately, many of the economic issues including unemployment can be resolved.
There is need to create in young people awareness and sense of entrepreneurship about the meteorically diversifying fields in the ICT sector now not just limited to manufacturing of hardware and programming and designing of software. Affiliate networks, search engine optimization, and social commerce are few of the lucrative emerging fields.
The world has been digitized largely. In developed economies, the situation is quite surprising since citizens in those countries are performing myriad of their routine activities on the internet-enabled computers. Be it shopping or office work, everything is being performed efficiently in the cyber world.
Companies that depend on constant connection with their field employees in the oilrigs for example are successfully using convenient mobile apps to make seamless connection in order to ensure productivity. Business-to-consumer ecommerce outlets are harnessing multiple resources to expand outreach of their products across the growing base of netizens.
HUMAN RESOURCES ARE THE KEY
Behind each user-friendly application for Apple, Android, etc. and for the effectiveness of business-customer link building, fertile minds are working. It is interesting to note that not all IT workforces are based in a country where a service is being taken place or delivered. Social networking experts, search engine optimization experts, and marketing specialists in any of the developing countries may be providing technical supports to well-heeled websites of some renowned international brands sold in developed economies.
Outsourcing is a rapidly growing industry in the world. Aspirants of technical and marketing supports hire intermediaries/individuals for their commercial and non-commercial projects. The industry covers multiple aspects from programming and designing to writing, marketing, email marketing, call centre services and so forth.
As the name implies, outsourcing signifies assigning to outsiders (onshore or offshore) tasks that otherwise can be performed in-house. The reasons include among others cost-reduction as well as pursuits of expertise.
IT firms, consumer packaged goods companies, etc. hire contractors abroad (offshore) to lay hands on wage arbitrages and get advantages of low labour costs. Much of the businesses are also delegated to onshore companies.
The global outsourcing industry is estimated to cross the mark of $464 billion in 2011, indicating nine per cent rise over $425 billion a year ago. India holds the major chunk (42 per cent or $62 billion) in global offshoring market ($145 billion), outpacing its neighbouring China that earns $46 billion from offshore segment.
SOURCES OF INCOME
According to official statistics released by the state bank of Pakistan, the exports of IT and IT-enabled services surged 33 per cent to $61 million in first quarter of ongoing financial year from $45 million in the similar period a year ago.
Undoubtedly, this export figure is not the real reflection of IT exporting sector. Firstly, there are different calculation methodologies. Secondly, there is a doubt that not all revenue flowing in the country is recorded officially.
The numbers of broadband users crossed one million mark by the end financial year 2011, up 66 per cent as compared to 0.9 million a year ago, according to a latest report by Pakistan telecommunication authority (PTA).
Generally, internet access in urban centres is easy. With hip knowledge of developments, IT graduates start their own businesses. The global ecommerce revenue will touch the mark of $963 billion by 2013, rising at an annual rate of 19.4 per cent, according to J.P. Morgan. The numbers of US internet shoppers are expected to increase to 189 million in 2013 from 170 million in 2010.
U.S. is one of the major springboards of global outsourcing business. Many small and large companies seek IT technical and marketing supports in the cost effective markets. Dollar-local currency difference gives them normally cost benefits. The online retailers take supports of foreign marketers to amp up their sales. They make partnership with affiliate marketing networks in different countries to extend outreach of their products. For example, an affiliate marketer in Pakistan promotes US-based e-seller's products on its website through its innovative marketing and SEO techniques and receives commission on each sale as a result.
Dropshipping has emerged as a concept in the internet retail world getting popularity leaps and bounds. All the famous ecommerce business-to-consumers (B2C) ventures like Focalprice, ebay, etc. take advantage of this idea materialized by the partnership of two independent businesses working for the similar objective: bulk sale. There is no limit on the numbers of dropshippers. A business can team up with many of them at the same time.
Focalprice gives its dropshippers independence in formulating marketing strategies. The China's leading online store having 70,000 items across 100 categories has free delivery arrangement for consumers in 200 countries. Moreover, well-known internet retailers like Adidas and Amazon also run their dropshipping programs. Affiliate programmes work on the similar model.
IT outsourcing sector in Pakistan is facing numerous problems. Unavailability of internationally recognized payment gateways such as PayPal creates online payment related issues. However, online financial transactions are being facilitated by other alternative organizations. There are several small, medium, and large software houses operating nationwide relying on jobs generated outside the country.
ICT sector can become major driver of entrepreneurship in Pakistan provided all the stakeholders including government, educational institutes, and civil service organization join hands to educate enterprising young people about commercial values of the sector. Fields that are commercially viable, and coordinate with the available resources, need to be highlighted.