Unpacking IT challenges
Future undoubtedly lies with IT, however, it is alarming that Pakistan’s IT sector faces multiple challenges
The Information Technology (IT) sector holds immense potential to transform businesses and create new job markets for entrepreneurs.
IT encompasses a broad range of areas, including software development, hardware manufacturing, the Internet of Things (IoT), artificial intelligence (AI), and cloud computing.
The future undoubtedly lies with IT. However, it is alarming that Pakistan’s IT sector faces multiple challenges, ranging from structural reforms, IT infrastructure, policy formulation, and regulations to bottlenecks in providing high-speed internet and facilitating freelancers. Addressing these challenges is an urgent priority for the government of Pakistan.
IT infrastructure is the foundation for IT exports and e-commerce. A few years ago, Pakistan ranked as the fourth-largest freelancer market globally, with the potential to become number one.
Thousands of IT professionals and young entrepreneurs work as freelancers for international clients, earning valuable foreign exchange for the country. These individuals need encouragement and facilitation at all levels. High-speed internet is crucial for efficient IT operations and unlocking the full potential of freelancers.
With adequate support, Pakistan’s freelancers could generate up to $100 billion in revenue within five to ten years. Unfortunately, internet speed often suffers due to cybercrime control mechanisms, commonly referred to as a ‘firewall’ in the security paradigm.
Pakistan is still in the process of developing a robust IT infrastructure to attract foreign direct investment (FDI) in the sector. Establishing software technology zones (STZs) and software technology parks (STPs) is essential to boost IT and IT-enabled services.
The government must energise and activate entities like the Special Technology Zones Authority (STZA) and the Pakistan Software Export Board (PSEB) to facilitate the IT services sector.
The National Incubation Centre (NIC) also needs to play a proactive role in enhancing exports and fostering innovation as a hub for economic growth. Policymakers’ inertia in adopting successful models like the Research Triangle Park in North Carolina (USA), Zhongguancun in Beijing (China), and Kista Science City in Stockholm (Sweden) is baffling.
These hubs have produced tech giants like Skype and Spotify. Pakistan must emulate such initiatives to establish itself as an IT hub.
The IT sector’s growth is hindered by slow-speed internet, negatively impacting IT services and IT-enabled services exports. Affordable and reliable high-speed internet, state-of-the-art data centres, and uninterrupted power supply are critical to the sector’s promotion. Expanding 5G coverage is also essential for advancing IT.
AI is reshaping industrial infrastructure, and its efficiency hinges on high-speed internet.
The government should prioritise restoring broadband facilities to help the sector thrive, contributing significantly to export earnings. Innovations in data analytics and blockchain are necessary to enhance exports, but these are currently lacking, which adversely affects the sector’s overall performance.
Pakistan is losing its share in the freelancers’ market due to several factors, particularly slow internet speeds. Young IT professionals involved in IT services exports frequently report disruptions caused by unreliable internet connections, which affect their ability to meet deadlines and fulfill orders.
Freelancers in Pakistan handle various tasks, including web development, content creation, graphic design, and digital marketing. However, their productivity is hampered by these connectivity issues.
While virtual private networks (VPNs) offer some relief, they are not robust or accessible enough to support business needs effectively. Moreover, the cumbersome process of obtaining VPN access adds another layer of difficulty, further impeding IT exports.
Immediate action is required to address these challenges. IT and fintech startups also face hurdles due to overly complex regulatory frameworks, which undermine the confidence of aspiring entrepreneurs.
Freelancers also struggle to open bank accounts for their export proceeds. While the State Bank of Pakistan (SBP) has made efforts to facilitate this process, many freelancers still resort to opening accounts abroad.
This is primarily due to the stringent monitoring of remittances by the SBP, which stems from commitments to the Financial Action Task Force (FATF). Lengthy payment processing times and scrutiny by the Federal Investigation Agency (FIA) further exacerbate these challenges.
These obstacles compel many young entrepreneurs to relocate abroad, seeking environments where IT businesses can thrive without bureaucratic hurdles. While there are multiple reasons for the brain drain, the lack of facilitation for IT entrepreneurship is a significant factor.
Ensuring ease of doing business within Pakistan is critical to retaining talent and capitalising on the lucrative IT services market, which has the potential to generate billions of dollars.
The prime minister’s commitment to increasing IT and IT-enabled services exports to $25 billion within the next five years is commendable. However, the follow-up actions necessary to achieve this target are lacking.
The Pakistan Software Houses Association for IT and ITeS (P@SHA) has already identified gaps and deficiencies in the policy framework and its implementation.
Addressing these issues is essential to not only meet but surpass the target. With increased facilitation and the removal of excessive taxation, Pakistan can achieve exponential growth in IT exports.
The world is advancing rapidly in IT and IT-enabled services and Pakistan must keep pace to capitalise on emerging opportunities. This is especially important as the sector enters a transformative era driven by AI.
A robust policy framework and regulations for AI are urgently needed, but Pakistan currently lacks such measures. Data privacy is a fundamental concern in the age of IT and AI, and policymakers must prioritise its protection.
While AI represents a monumental achievement in technology, its potential risks must be mitigated through proper regulation.
AI should complement human efforts rather than replace them entirely, as is often feared. A balanced approach to AI governance is critical for achieving significant technological milestones while safeguarding human interests.
Data privacy and national security require impregnable frameworks and legislation, which are currently absent in Pakistan. Enacting comprehensive data protection laws is imperative to ensure both individual privacy and national security.
Pakistan has yet to leverage its most significant resource — its youth — in the field of IT and IT services. With proper training and guidance, young graduates could become key contributors to economic growth. The government should collaborate with private companies and universities to develop this untapped potential.
A capable workforce is essential to establish Pakistan as a global IT hub. Private sector involvement is crucial for achieving the desired results in expanding the IT and digital markets.
By training a larger number of young freelancers, Pakistan can realise its dream of dominating the global digital economy. The future of the IT sector lies in empowering the next generation of IT experts.
Essentially, Pakistan’s IT sector is brimming with potential but faces numerous challenges that hinder its growth and contribution to the economy. High-speed internet, regulatory reforms, data protection, and ease of doing business are essential for unlocking this potential.
The government must take immediate and comprehensive steps to address these issues, ensuring that the country does not lose its competitive edge in the global IT market.
By prioritising the development of IT infrastructure, facilitating freelancers and startups, and embracing technological innovations, Pakistan can position itself as a leading player in the IT and IT-enabled services sector. The future of Pakistan’s economy depends on its ability to harness the transformative power of IT.
The writer is a former additional secretary and can be reached at: [email protected]
Disclaimer: The viewpoints expressed in this piece are the writer’s own and don’t necessarily reflect Geo.tv’s editorial policy.
Originally published in The News
