Can Pakistan still offer a promising future if you choose to stay here?

Written by Usman Asif

Apr 16, 2024

April 16, 2024

In the last five years, one thing has become quite clear: for Pakistan to maintain high sustainable growth, it needs dollars, especially through exports. That’s where the IT sector has stood out: without much governmental support, it managed to bring in $2.59B to the country in FY23, making up for 35% of all our services exports.

However, if you zoom out a little, the numbers don’t seem too impressive when you consider how the global IT exports are a $1.2T market. The good thing is that the policymakers have identified the problem at least, and are looking to change the status. Recently, the Ministry of Information Technology and Telecommunication unveiled its roadmap for IT exports, setting a target of $10-18B over the next 5-6 years.

While this is indeed a great starting point, we need to do a lot more. I have long argued that in order to realize our true potential, the industry needs to come together as one and present a united front. There are multiple ways of doing that, starting with the representative associations playing a proactive role in identifying new market opportunities and more importantly, training the talent.

The latter is, in fact, going to be the biggest bottleneck behind our exponential growth. Currently, the country produces between 25,000 and 30,000 IT graduates every year — which means our talent pipeline is growing by a measly 4-6% annually. Of them, many of the best human resources actually move abroad for greener pastures abroad.

Actually, our brain drain is accelerating as 210157 highly qualified Pakistanis left in 2023, which is much higher than in all of 2022. So on a net basis, our annual talent pipeline is growing by low-single digits. On top of it, a sizable number become full-time freelancers, thus never joining the local organizational workforce. Contrast that to our ambitious targets of 25%+ in additional exports. These numbers have to be aligned and it would require collaboration across the industry.

One immediate fix to this situation would be a national-level training program, where graduates of Sciences, Technology, Engineering, and Math degrees are upskilled for the in-demand skills and added to the core IT labor force. Something of this sort has been tried in the past, but a little half-heartedly. Remember, Pakistan has around ~600,000 students enrolled in programs relating to engineering, the natural sciences, and mathematics.

But that’s just the tip of the iceberg. After all, there’s no need to limit ourselves to technology. Any service that can be delivered digitally is right up our alley. Think of marketing, business consulting, accounting, legal, and PR amongst others. In FY23, Pakistan exported $195M of Business and management consulting and public relations services exports, followed by another $126.2M in Advertising, market research, and public opinion polling. Accounting and legal services each brought in $61.5M and $21.3M of forex to the country.

Impressive as these numbers may seem at first look, we are not doing a great job of realizing the opportunity. For context, just the top five importers of “Other Business Services” spend $1.1T annually. Once again, we have a latent supply ready to be channeled toward the right areas if the organizations take the leap. There are 400K+ students enrolled in business administration and law degrees in the country and another 171K+ in arts and humanities.

At the same time, we need to double down on our core goal as the industry by expanding across geographies and value chains. Currently, Pakistan is over-reliant on the US, which accounts for more than half of our exports. Meaning we are leaving the rest of the pie for others. Secondly, while being a cheap market is okay in the short term, we must graduate with more advanced technologies sooner rather than later if we want to build Brand Pakistan.

First of all, it makes a lot more monetary sense considering that the contract sizes are much bigger with newer and advanced technologies. Currently, that’s an area where we seriously lag behind 65% of our computer services companies export less than $100,000 annually and even the biggest organizations don’t do contracts of even $50-100M. More importantly, with advancements in artificial intelligence, a sizable chunk of the low-value chain work will inevitably be automated at a disruptive speed. So we must stay ahead of the curve.

Ultimately, doing all of this will take a village. One company or individual cannot pull off a transformation of this scale. Everyone, from the industry to the government to, most importantly, the youth will need to chip in. The good thing is: that we are in the right direction, it is just that there should be a lot more urgency.

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