5 Policy Recommendations for Growth of IT & ITES in Pakistan

5 Policy Recommendations for Growth of IT & ITES in Pakistan. Pakistan’s IT and ITeS industry are one of the regional examples for constant and steadfast growth in the last few years. The country has shown exemplary success in the IT specific growth with a significant share in the national GDP growth. It has a huge potential with several strengths such as large number of young population, growing infrastructure, lowest market rates and lucrative tax benefits for the industry.

Pakistan is producing over 25,000 IT graduates and engineers every year. The sector is among the top 5 net exporters of the country with the highest net exports in the services industry. Pakistan’s IT exports continue to show growth trend with computer software to be the top product with 60% of market share. The software consultancy services take a share of 25% while remaining minor share is divided into several other computer related services.

Pakistan is also world’s number three in the gig economy and competes with India and Bangladesh. Moreover, Pakistani market is also a hub for international start-ups arena. The country was able to grab investments worth US$300 million in 2021 alone. “Startup Fever is gripping the World’s Last Big Untapped Nation,” claims Bloomberg and shares that global investors are pouring money into Pakistan’s budding tech sector.

The efforts towards ease and cost of doing business in Pakistan were based on global economic trend, increasing political will, rising economic challenges and growth oriented global economy with lesser regulatory frameworks. These were aligned through changes in specific laws of SECP, SBP, BOI, Ministry of Commerce, etc.

Pakistan’s First IT Policy

Historically, Pakistan’s first IT Policy and implementation strategy was approved in August 2000. Later, two other policies came into force. These were the Telecom Policy of December 2015 and National Digital Pakistan Policy of 2018 respectively. The success of Pakistan’s IT and ITeS industry was primarily promoted through different bodies, associations and organizations after the launch of these policies. Yet, there is a huge potential of growth of IT and ITeS industry in Pakistan as Bloomberg rightly states to be untapped globally.

Pakistan ranked at 111 among 144 countries in Global Information Technology report 2014 of World Economic Forum. Similarly, Pakistan is ranked 29 out of 150 countries for e-sport earnings, with 278 local players earning a combined total of $4.78m. At the regional level, India’s IT exports accounted for US$ 133.7 billion, whereas Pakistan’s IT exports for the same period touched US$ 2 billion mark in FY 2020-21.

Therefore, the growth of Pakistani IT and ITeS industry is celebratory in terms of home ground growth and if it is seen in comparison to several other sectors of economy. Howsoever, if the growth is seen in terms of global scaling of IT and ITeS sector, it may be termed as nascent and scalable with adoption of appropriate approaches, policies and regulatory structures with a holistic approach of engaging multiple stakeholders with clear planning parameters and defined goals.

Thus, the ease and cost of doing business in Pakistan has two different scenarios. Its strengths internally are able to drive the numbers to growth. However, at the global level, there are several steps required for ensuring global standardization of ease in doing business with marginal costs. The following policy recommendations define the proposed journey for achieving the same.

Policy Recommendations

The following policy recommendations outline the proposal for adopting an approach towards ease of doing business in Pakistan in a cost effective manner:

1. Holistic Approach of Stakeholder Engagement

There is a need to ensure holistic approach from all stakeholders towards growth of IT and ITeS industry by involving the industry itself, the academic, advocacy entities, regulatory bodies, federal and provincial level departments and ministries for a coordinated approach with milestone setting for the growth of IT sector in Pakistan. A national institution such as PASHA or PSEB can take the role of Lead Agency or IT Ministry can lead the process and drive this national IT journey with a huge impact for IT sector.

2. Pakistan IT Growth Board

Create Pakistan IT Growth Board with defined Single Window operations for IT sector through IT ministry by adopting one stop shop model for registration and licensing support, opportunity creation and dissemination, hand holding to IT industry and individual businesses as well as issue/disputes resolution between public sector bodies or regulatory authorities and individual business entities, groups or associations. This can serve as a key to growth with highest level engagement from government and private sector with Minister for IT as Chairman and representation from other concerned ministries and regulatory bodies. This board should be serve as a supra body and able to come up with strong policy level recommendations as well which may include support for gaming industry, payment gateway introductions, removal of similar multiple regulatory frameworks and bodies for IT sector.

3. Engage the educational infrastructure

Engage the educational infrastructure of the country at different levels including the primary, secondary and the upwards educational institutions; IT related schools, colleges and universities for creating awareness and involving the upcoming generation for business and entrepreneurial exposure (as it is IT sector’s strength). This should serve as key approach of involving and engaging the youth by showcasing the earning potential, growth based revenue models and freelancing opportunities in versatile ways (as there are a very few people following this model in Pakistan in comparison to other regional and global players).

4. Evolve Payment Gateway

Evolve Payment Gateway focusing on South Asia as it is imperative for freelancing, gig economy and fast payment checkouts. It is understandable that Pakistan focused gateway may be a challenge due to FATF restrictions and other perceptual issues about Pakistan. Thus, a collaboration for regional gateway of PayPal scale may be helpful in ease and cost of doing business in Pakistan.

5. Media Discourse on IT and ITeS

Initiate a Media Discourse on IT and ITeS through multiple media specific endeavours for varying purposes including advocacy efforts, proposing and emphasizing on appropriate policy level changes and garnering the support from several public and private sector entities on the recommendations.

This set of actions is likely to prove and act as a game changer for Pakistani economy in terms of strengthening and growth.