When Israel's Prime Minister in his latest viral video from American Israel Public Affairs Committee in 2018 talked about research centers of all the top IT companies like Google, Facebook, Microsoft, Intel in Israel, he was rebranding his country and using its success to get diplomatic wins and rebranding it from its current oppressor image in the world to a softer image.
In countries like UAE, China, India, Israel, Estonia and others, leaders at the top are leading the digital transformation and success of their countries. China knows the next frontier is Artificial Intelligence, automation, and big data, evident from its effort in setting up Artificial Intelligence Parks worth billions of USD.
India’s Modi came up with the ‘Digital India’ slogan during his first year in the office and came up with a detailed policy on how to transform the nation digitally. India’s success globally has mainly come through Information Technology with almost half of its exports coming from Information Technology and related exports.
Pakistan has unfortunately lagged behind as compared to India and Philippines in IT industry. The IT industry in Pakistan has grown only to about $3 billion in exports which is almost 1% of its GDP. India’s IT exports are about 6% of its GDP at about $126 billion and $26 billion in Philippines.
Success for our country is going to come when we help our private companies go to the next level. Only entrepreneurs can be counted on to drive growth in any growth-oriented economy. Most of our projects are either outsourced internationally or technology is developed in-house. The U.S. shares its high-end technology with its private companies; Israel allows its ex-cyber security teams from the military to open companies; and, Indian government prefers outsourcing to local vendors. The companies, in turn, do wonders for their economy.
There are different reasons for this marginal performance. Our outsourcing sector was growing at a pace equivalent to India when internet undersea cable were damaged and the war on terror disrupted the success in terms of outsourcing, and, the confidence of Fortune 1000 Companies deteriorated as executives of these companies stopped traveling to Pakistan. Other countries including Philippines and India were able to attract these companies in huge numbers.
Pakistan’s product development sector also couldn’t pick up as there was lack of local outsourcing and Pakistan didn’t have many IT products that could be sold internationally. The situation is almost same now as most product development in the government sector is now being done in-house by government departments. The ability of government’s own departments like NADRA, FBR and PITB has produced some good work. However, this affected the local industry as they couldn’t get big local projects. The success of these projects could have led to these companies globally competing on similar large-scale government projects.
IT sector also wasn’t given due attention by most federal and provincial governments in the last 10 years as it was considered a very small sector. Generally, the attitude of government is that first, they want to see some success in a sector before giving it any attention. When countries like India and Philippines were focusing on this sector, we were focusing more on traditional industrial sectors where we had no electricity, gas or skills required to compete with the industrial leaders like China.
It's also time to ask ourselves, if an app like WhatsApp, Facebook, Youtube could have been created in Pakistan? Even if these apps had survived our policies, our authorities still wouldn’t understand that a company can run without profit. Apps like Uber and Airbnb disrupt the hotel and taxi industry and take a revenue percentage of each country’s hotel and taxi industry back to their countries.
Despite the hurdles, there has been some success recently. The outgoing federal cabinet was kind enough to approve a good digital policy and the Prime Minister formed a digitization committee to oversee the digitization of Pakistan. There were some great efforts from people in Ministry of IT. The key determining factor for progress is if the next government will pick up where the last government left off.
The first thing that’s needed as a step towards Pakistan’s digital revolution is to make sure that our leaders at the top lead this effort. Success for our country is going to come when we help our private companies go to the next level. Only entrepreneurs can be counted on to drive growth in any growth-oriented economy. Most of our projects are either outsourced internationally or technology is developed in-house. The U.S. shares its high-end technology with its private companies; Israel allows its ex-cyber security teams from the military to open companies; and, Indian government prefers outsourcing to local vendors. The companies, in turn, do wonders for their economy.
There are examples where local private companies were not good enough in the beginning and countries like India worked with their IT companies to develop their capacity so the local companies could develop their software locally. This has resulted in their companies now going global and winning big-ticket projects.
Pakistan has the requisite potential in the digital domain. One of the most invested startup in IOT in 2018 was made by a Pakistani founder; one of the world’s best enterprise security company was made by a Pakistani; one of the worlds best VPN was created by a Pakistani; and, one of the biggest ride-sharing company in the middle east was founded by a Pakistani.
I have met countless kids from 18 to 25 years of age who run e-commerce and other businesses and make anywhere from USD 1000 to USD 1 million a month. They have expertise in taking a product of $10 from China and selling it for $50 on their website or Amazon without bringing a single product to Pakistan or without ever visiting the countries they sell in.
These kids resolve the issue of payment by using PayPal accounts of someone residing in the countries where PayPal is available, because PayPal and payment processing is critical for the e-commerce industry. These kids are true entrepreneurs and they know how to work their way around the things that pose limitations.
The question, however, is what's stopping us from forming a national committee that brings these bright minds together? A committee that constantly monitors what issues they are facing rather than begging for their issues to be solved. Ultimately, they set up in Dubai or USA as they don’t have to deal with hard regulations or the non-business friendly mindset in our public sector institutions.
A recent example is where an IT company that has been operating in Pakistan for the last 10 years had issues with tax authorities and we had to write a couple of letters so that their case could be heard. They decided to double their team in India instead of Pakistan.
Another important point for our growth as a nation is to revisit our education system where our schools are killing creativity in children and our higher education institutions are producing graduates which the companies find difficult to employ. Out of 30,000 IT graduates we produce, only 20% are employable.
On the demand side, there will be a projected shortfall of 1.5 million in both cyber security and big data, BI domains in first world countries. Countries that are growing have a high demand of good professionals in areas like cyber security, machine learning, and big data and they would happily employ our professionals resulting in good foreign exchange and building of expertise internationally.
In the end, I would like to request our policymakers and our decision-makers to come together and realize that Information Technology is the only domain that can solve Pakistan’s biggest problems like its exports. Not only in IT but our traditional industrialists can also work with IT industry to build global e-commerce brands, use artificial intelligence to improve agriculture and help out traditional industries. This industry can create millions of jobs for our youth as it is the only industry where no capital is required to start selling your skills online.
Entrepreneurs can be incentivized for their performance in exports and job creation. Think tanks can be formed who advise the policymakers and studies can be conducted to take our industry to the next level. This would require the bright minds to come together and lay the groundwork for long term success. If we achieve success in this sector, it will build a better image of Pakistan in the world, and solve our trade deficit problem. Once we overcome these challenges and benefit from our enhanced capabilities Pakistan can regain its place as a proud and truly independent nation in the world.
The writer is the youngest Chairman of Pakistan Software Houses
Association (P@SHA) and runs a software development company.