‘Digital could add Rs9.7tr to Pakistan’s kitty by 2030’

Pakistan’s digital transformation, if fully leveraged, could generate up to Rs9.7 trillion in annual economic value by 2030, says a report released at an event cohosted by Google and the Pakistan Software Housed Association (P@SHA).

The report has been prepared by AlphaBeta, an economic strategy firm. Its title is Unlocking Pakistan’s Digital Potential: The Economic Opportunities of Digital Transformation and Google’s Contribution. A key takeaway is that as Pakistan is one of the youngest countries in the world (about 60 percent of its population is 15 to 29 years old), it must develop its people’s digital skills. 

This is exactly what President Dr Arif Alvi stressed at the event. He said that he was a strong believer in Pakistan’s digital potential because of its massive youth population: 65% of Pakistanis are between the ages of 26 years and 40 years. 

The education ministry and the Higher Education Commission (HEC) are working on enhancing the skills of IT graduates, keeping their potential in mind. The president said that the government is considering introducing a two-year associate degree program to increase the number of IT university graduates. 

He emphasized the importance of digital technologies to fight global challenges such as Coronavirus. It helped that Pakistan’s government already had a strong IT infrastructure, to manage the population. “We had a good database because all our people have an identification card and number,” he said. “We were able to assess their movement. We were able to implement a splendid partial lockdown strategy, and the result was that Pakistan was able to handle Covid-19 very efficiently.” 

Rs9.7 trillion economic value by 2030 

Fraser Thomson, the founder and managing director of AlphaBeta, the economic strategy firm which published the report, said that IT and IT-enabled industry have the potential to overtake the agriculture and manufacturing sectors in exports. 

The report says that Pakistan is home to more than 300,000 IT professionals, produces over 25,000 IT graduates annually and has nurtured over 700 tech start-ups since 2010. Technology exports have grown 15% per year since 2020 and are expected to reach $3.5 billion (Rs610,750,000,000) in 2022. Pakistan’s online population has grown rapidly and internet penetration is reaching 54% in 2021. 

However, Thomson said that certain policy-level interventions are required to fulfil this potential. “To tap this potential, Pakistan must continue to develop infrastructure to support local tech ecosystems, create digital and IT exports, and promote innovation and digital skills,” said Thompson. 

Challenges unlocking the true potential of IT in Pakistan 

During the online session, experts highlighted the challenges faced by the IT sector which are impeding the digital transformation. 

Tech companies and digital startups grapple with a lack of contract resolution mechanisms, poor internet access outside major cities, intellectual property theft, lack of investment in human capital development and skills enhancement.  

There has, however, been an encouraging amount of investment in Pakistan-based startups. Pakistan’s startup ecosystem has raised more than $230 million in 2021, according to the report. Founding CEO of Katalyst Labs Jehan Ara said that this investment is encouraging but it isn’t enough as these startups are getting most funding from the international market. 

“The issue is that you need capital at the early stage when people are working on ideas so that they can experiment, get the hardware and software they need,” she said. The local funding ecosystem should be developed so that entrepreneurs get the money they need at early stages.