it industry pakistan

Written by Zahra Kashif 7:35 pm Articles, Pakistan, Published Content

The Future of Pakistan’s IT Industry: Challenges and Prospects

IT exports from Pakistan have witnessed exponential growth, from $1.44 billion in FY 2019-20 to $1.7 billion in FY 2020-21, and then finally crossing the 2 billion mark in FY 2021-22. While the government has made a move to create National Incubation Centers (NICs) for promising entrepreneurs, the IT industry still lags behind. Zahra Kashif attributes this slump to inadequate broadband infrastructure, the gap between education and skills, and the lack of IT parks and an R&D setup, among others.
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Ms Zahra Kashif is currently working as the Lead Project Engineer at TechAbout and is an author of its international Tech Magazine called TechEngage.


Despite the surging growth of the IT industry, why is Pakistan still lacking in top-notch IT products? The IT industry is considered the movement of the world towards major digitalization in various sectors such as health, education, business, banking, and more.

The IT Industry of Pakistan

A report stated that on average about 25,000 IT graduates become a part of the workforce each year. This shows the increasing progress and growth of the industry. Pakistan is ranked 4th among the fastest-growing freelance earning countries worldwide. With a 47% growth rate, Pakistan has shown great potential in the future freelance market.

About 64% of the country’s population is younger than 30 years of age. Having such a large portion of the youth in the country has given Pakistan an advantage to channel youth into the IT industry.

According to an article published in the Tribune, “It is pertinent to note that in FY 2021-22, the IT & ITeS industry export proceeds were approximately $2.6 billion and, as far as the services sector is concerned, the IT industry achieved the highest exports. It is the only industry with a 77% trade surplus.”

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Growth of the IT Industry

According to A.T. Kearney’s Global Services Location Index 2019, Pakistan is ranked the 5th most attractive location financially for offshore services. Pakistan is also a hub for many Business Process Outsourcing (BPO) companies with big names such as Systems Limited, Netsol, TRG Pakistan, IBEX, 10 Pearls, etcetera.

According to research done by the State Bank of Pakistan, IT exports during July-April 2021-22 increased by 47.4 percent to $2.2 billion for the first time when compared to the $1.44 billion in the fiscal year 2019-20 and $1.7 billion in the fiscal year 2020-21.

One of the major reasons for this growth is the innovative ideas that the youth are presenting via their startups and entrepreneurial skills. This has revolutionized the outsourcing industry and currently, the country is going through a major shift toward BPO trends.

A great example is NETSOL, a large IT firm that contributes to almost 25% of the IT exports from Pakistan. It has been providing impeccable services in different areas while providing companies working in the automobile, equipment, and big-ticket finance. The company has automated many processes by providing solutions that have made the retail and wholesale business easier.

The Trend of IT Exports in Pakistan

The Ministry of IT & Telecom has successfully launched a program to empower the National Incubator Centers (NIC) and build an efficient network. IGNITE has established five NICs in the federal capital and all provincial capitals of the country.

To date, there are five notable NICs located in Islamabad, Lahore, Peshawar, Karachi, and Quetta. These NICs have inducted around 440+ startups and promise to further mature these startups into full-fledged businesses in the future.

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The startup culture has enabled many youths to be mentored and networked with highly qualified professionals. Many individuals have brought to light some very amazing startups that have evolved the business market in the country such as, Cheetay, Bykea, SadaPay.

The main aim of NICs is to provide individuals with proper professional guidance, exposure to the market, a curriculum that engages them with recent trends, coaching, legal assistance, workshops, training, pitching skills, leadership, and teaching efficient management skills.

Pakistan shows a lot of flexibility in terms of ease of doing business, with the country having jumped many ranks in the global ranking.

Why Pakistan does not have a Top-Notch IT Product?

Pakistan has several IT professionals that have established services businesses in many cities, but there are no notable products that can be presented in the global market as the exclusive product of Pakistan. Below are some reasons that will explain these problems briefly.

Low Quality of Broadband Infrastructure

Pakistan has 3G and 4G internet facilities but still lacks a reliable infrastructure of the internet that can provide consistent and high-speed internet. Our highest broadband speeds are still not competitive in the global market.

For services and the IT sector, the internet is the backbone that provides commendation and submission of work to potential clients. A country with a population of 220 million still depends on limited sources of internet.

Educational and Skill Gap

Modern-day companies need individuals that are well-versed with the latest skills and knowledge. There is a huge skill gap between the existing knowledge required by the global IT sector and the IT graduates of Pakistan. The educational curriculum and educational capacity are not on par with global standards.

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The IT industry right now is in high need of individuals that have IT skills that can fulfill the requirements of international clients. Modern-day tech-related knowledge and innovations need to be introduced in the educational sector to upgrade the educational gap and skill level from an early stage.

Legal Framework for E-Commerce

Currently, in the growing IT industry, e-commerce is playing a vital role in uplifting the economy of the country, and it is now moving towards becoming the backbone of the whole industry. In Pakistan, the legal framework and its awareness is lacking, and due to this, the e-commerce sector is suffering. To keep a check and balance on e-payments and online fraud, a legal framework needs to be established.

Lack of Research and Development

Many startups are moving towards research and development, but there is still a lack of proper R&D in the country. Due to this, we are unable to progress in bringing about big innovations in the field of IT. It helps in providing analysis and critical data on existing as well as incoming developments.

Less Number of IT Parks

There are a total of 14 IT parks in the country for a population of 220 million people. Such a small number cannot accommodate training, mentoring, and facilitation of all the people. There is a critical need to establish more IT parks that will enable startups to grow at a much faster pace.

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