ISLAMABAD: Pakistan is brimming with IT talent as a result of world-class universities, a vibrant IT industry, and strong government support. The country’s strong IT ecosystem has attracted the world’s renowned IT companies, such as Oracle, Microsoft, SAP, IBM, and Cisco, to Pakistan.
Realizing the importance of the IT industry infrastructure and its subsequent positive impact on Pakistan’s economy, the Ministry of Information Technology has established Pakistan Software Export Board (PSEB) to ensure sustainable growth of the IT industry.
The government has also started some incentive programs for foreign investors in the IT industry. The incentives include zero taxes on IT exports, tax holidays for IT start-ups, 100% repatriation profit for foreign investors, up to 100% equity ownership, and a tax holiday for venture capital funds till 2024.
Owing to these steps taken by the government, export remittances have increased by 150 percent over the past five years. Moreover, the IT and telecom industry has attracted $6.1 billion in foreign direct investment (FDI) in the last three years from July 1, 2018, to March 30, 2022.
Following the incentives and ease of doing business, investment in the IT industry is one of the fastest-growing businesses in the country. But there is still a lot of potential to unearth in the IT sector. Malik Zaka Ullah, Senior Data Engineer at Teradata GDC Pakistan, told WealthPk that Pakistan has a plethora of young people that can create a lot of opportunities for the investors to use them in a productive way.
He added that unfortunately, the huge young labour force of Pakistan was not skilled enough owing to which Pakistan was still unable to achieve its growth target in the IT sector.
Political instability in the country is a serious threat to the development of the IT industry. A lot of foreign investors are reluctant to invest in Pakistan due to the political crisis. The existing companies are also concerned about the unstable political situation.
Moreover, there are very few local investors in this sector. Most of the companies in Pakistan are owned by foreigners.
Pakistan is yet to provide country-wide internet coverage. A large number of the population lacks internet services, especially in the peripheries, while the quality is not good enough where the internet is available.
There is a need to protect intangible assets such as inventions, ideas, software, designs. Legal measures are necessary for protecting intellectual property rights and the rights of consumers.
The government should take the following significant steps to overcome all the hindrances in the way of IT sector’s development.
First, Pakistan has a state-of-the-art telecommunications network; however, the old PTCL organizational structure needs to be restructured immediately on a par with the international standards.
Second, there must be long-term policies made with the consent of all political actors, so that the investors can be assured of stability in the industry. The more the policies are long-term and protected with strict laws, the more the investment will come.
Lastly, taking advice from countries like China, which have successfully adopted information technology, can be helpful. They have accumulated a wealth of experience in preparing and implementing policies and programs to promote the development of the IT sector.
