pakistan-econ
Infrastructure Management

Pakistan Sees Growth and Answer to Unemployment in ICT

Times are changing for Pakistan’s emerging ICT industry. Recent political changes favour local technology development and the new government is looking to boost the country’s economic activity by encouraging mass adoption of digital technologies. This, at least, was the message Professor Ahsan Iqbal, Federal Minister for Planning, Development and Reform, conveyed to a group of leading Pakistani entrepreneurs, IT professionals and the Silicon Valley academia in San Jose, California recently.

“The size of ICT sector can be developed from the current $2bn to over $20bn in the next 10 years,” said the Minister. “Pakistan’s long-term plan through 2025 [called ‘Vision 2025’] is being developed [and] aims at developing knowledge pillars of the economy so that Pakistan can realise a fast growth trajectory in development and become a competitive economy in the global marketplace.”

Pakistan, the world’s sixth most populous country, is yet to exploit its existing IT infrastructure and market potential to foster this growth. Despite about 70% of the population being cellular subscribers, Pakistan ranks 104th out of 144 countries in terms of ICT utilisation and infrastructure, according to the World Economic Forum’s Global Information Technology Report for 2013. According to another study, the Connectivity Scorecard index, which measures the ability to use established ICT infrastructure effectively, Pakistan ranked second-last, above only Kenya of the 26 “resource-driven” economies analysed.

Advanced economies adopt digitisation to disrupt and innovate, thus facilitating socio-economic growth and productivity even when the global economy is weak. By contrast, Pakistan’s emerging ICT market often fails to attract foreign investment due to unfavorable government policies, lacking skills and security concerns.

“Addressing these challenges can significantly alter the shape of Pakistan’s ICT industry and channel the impact of digitisation to the advantage of young IT graduates facing unemployment,” says a university professor, an expert in engineering economics, speaking on condition of anonymity. “We’ve had an average of 316 industrial units shutting down each year since the last seven [years due to the local energy crisis]. That’s 500 unemployed per unit closed.”

When asked to advise a framework for effectively exploiting the ICT sector for employment, the professor said the local ICT industry needs to gain a competitive edge in the global marketplace to attract foreign investors.

“We need to formulate plans for digitisation of various industry verticals. Promoting local IT talent and digital applications as enablers is the key to making these plans successful. Foreign investments will start pouring in once international technology vendors realise there is high demand among local industries to take up ICT resources to increase productivity. Digitisation of local industries, particularly government, health and education, is crucial for expanding the global share of Pakistan’s ICT market and the authorities concerned should create policies that provide employment opportunities for young IT talent in this expanding ICT ecosystem.”

The absence of a well-established ICT ecosystem means foreign investors can expect low competition and high returns on investments by tapping the vast unexploited potential of Pakistan’s emerging ICT market. Recent ICT trends suggest investments in emerging ICT markets yield high employment gains for young IT professionals. In 2011, 94% of all employment gains due to digitisation were achieved in emerging ICT markets. These tend to be densely populated countries but deprived of modern data services, similar to Pakistan.

Dr. Sarfaraz Alam, CEO of Texpo, a Dubai-headquartered international IT consulting firm, has paved the way for foreign investors to explore Pakistan’s ICT sector by organising international exhibitions and conferences in the country every year since 2001. The Texpo-sponsored ITCN Asia conference held this September attracted thousands of IT professionals and executives from local public and private organisations interested in ICT products and services offered by international vendors. Representatives from companies including Extreme Networks and Microsoft demonstrated their capabilities.

“It is our desire to expand in Pakistan, build infrastructure and create jobs for a highly talented and enthusiastic market here,” said Alam. “I hope with our current initiative and future plans, we shall have many more internationally recognised organisations focusing on Pakistan.”

The event concluded with the British Deputy High Commissioner Mike Reilly awarding scholarships to 34 IT students from Pakistan as part of Texpo’s ‘Mentoring a Talent’ initiative aimed at helping South Asian students reach their potential in IT education.

Minister Ahsan believes these programmes, along with his Vision 2025 project, will help grow the local ICT market and reduce unemployment from its current rate of about 5.6% and broader underemployment.

“Investors are encouraged to establish R&D and manufacturing units in the IT/telecom domain to take advantage of a market of 180 million people,” said the Minister. “[Pakistan needs to] develop a modern infrastructure to support high growth rates and promote regional connectivity. If this region is integrated it will not only bring opportunities for Asia, but also for the global economy.”

 

Ali Raza is a business and technology consultant who covers consumer and enterprise technology issues for US and international publications. As a racing driver and a stunt master, only cars eclipse his love for technology.

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Ali Raza

Ali Raza is a business and technology consultant who covers consumer and enterprise technology issues for US and international publications. As a racing driver and a stunt master, only cars eclipse his love for technology.

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