Online freelancing grows in Pakistan, earnings reach $1b

Published: April 10, 2017

ISLAMABAD: It is well known that Pakistan is one of the top four countries with the highest number of online freelancers. Therefore, the recently launched e-Rozgar scheme in Punjab is a step in the right direction.

In his newspaper article, the Punjab IT Board chairman quoted a conservative figure of 150,000 Pakistani freelancers, earning combined revenue of roughly $1 billion. This fairly high number is despite the fact that so far the phenomenon of online freelancing in Pakistan has grown without any significant government support.

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One hopes that e-Rozgar centres would be the proverbial ‘first drops of rain’.

Hurdles to e-commerce

A big barrier to reaching the immense potential of online freelancing is the lack of literacy – both digital and conventional. Digitally literate online freelancers can operate even outside such centres with their smartphones. Therefore, providing basic digital literacy in schools is even more important. It will help not only online freelancing, but other e-commerce activities.

The online freelance market is a byproduct of e-commerce, which has various formats and business models. The one getting a lot of attention lately is the so-called ‘sharing economy’ (also called ‘collaborative consumption’).

Sharing economy is not really new. What is new is the internet’s ability to let everyone communicate easily with a very wide audience. The sharing economy’s business models thus leverage direct access to consumers, made possible by the internet, reducing business costs.

In sharing economy business models, typically the entire process is managed by a managing company (like Uber), which is not the actual service provider. Instead, the company is a facilitator, making safe and easy transaction possible.

To take care of the trust deficit among strangers, the managing company puts in place an independent bi-directional post-transactional review system for both sides to rate (or review) the other side.

Today, there are hundreds, perhaps thousands, of sharing examples. Starting from collaborative online encyclopedias (Wikipedia), to sharing videos (YouTube), pictures (Instagram), cars (Uber, Careem), accommodation (AirBnB), rides (Lyft), bikes (Liquid, formerly Spinlister), household items (Snapgoods), even driveway spaces (ParkAtMyHouse), and peer financing, or crowd funding (Kickstarter) and so on.

Sharing economy

One reason why sharing economy is growing rapidly is that today’s youth are connected individuals, who have embraced broadband internet and try to get the latest smartphones that they can afford. However, most economies, including ours, are not ready for such disruptive new business models.

The current legislative and regulatory regimes were not designed for sharing economy. The issues which Uber and Careem are facing with the provincial governments in Pakistan are just the beginning. Many more similar challenges will come up in the near future.

This is not just in Pakistan. According to Digital Watch, there are court cases and rulings involving Uber in over 25 countries, most of all in the US itself. But as is always the case, things will surely settle down and the march of the technology will continue.

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Sharing economy contributes immensely towards the growth of Small and Medium Enterprises (SMEs) in more ways than one.

For instance, all small businesses in the early years operate on tight budgets. Cash flow is one of the reasons that a large number of startups fail. Anything to control cash flow makes survival more likely.

This includes ensuring that money is saved by not having to buy things that you need and turning your unused assets into cash. The sharing economy makes it simple to share physical as well as non-physical goods and services using the internet. A digital market is, therefore, an excellent opportunity for economic growth.

Freelancing and sharing economy are only two tips of the iceberg that e-commerce is. There is a lot more (like online shopping). In 2016, the global e-commerce market volume is estimated to have reached $22 trillion, growing much faster than the conventional commerce.

All this creates enormous employment opportunities, particularly for the bulging youth population. According to an agreement signed with Tevta Punjab in August last year, Careem is getting 100,000 unemployed youth trained in the next three years (incidentally over 80% of Careem’s drivers in GCC countries are Pakistanis – who obviously too contribute to Pakistan’s economy through foreign remittances).

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It is time that we realise the colossal benefits that the internet and ICTs can bring to our economy and start encouraging growth of ICTs – rather than taxing heavily for short-term cash generation.

The writer is former CEO of the Universal Services Fund and is providing ICT consultancy services in several countries of Africa and Asia

Published in The Express Tribune, April 10th, 2017.

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Reader Comments (6)

  • desi786
    Apr 10, 2017 - 1:38PM

    Thanks for telling us whats is happening on this front. Can you ask PAYPAL to enter in Pak markets as non-aval is effecting this niche? May be use your connections with State BankRecommend

  • Bilal
    Apr 10, 2017 - 3:01PM

    Revenue can increase more than 10 times of this value if Govt makes some effort to bring PayPal in Pakistan. Due to unavailability of PayPal in Pakistan we lost many freelancing project per month. Recommend

  • Jamal
    Apr 10, 2017 - 3:34PM

    TAX it, man.Recommend

  • Parvez Iftikhar
    Apr 12, 2017 - 10:58AM

    Dear desi786, and dear Bilal, you’re both right. PayPal would make a huge difference. I will surely ask the concerned people as to what the problems are, and how could those be resolved. Recommend

  • Amir Bashir
    Apr 12, 2017 - 4:07PM

    Being a freelancer, I urge our Government to provide incentives to Freelancers by

    a) Providing them PayPal Services
    b) Bringing Amazon to Pakistan

    Both of these services can increase the revenue – mentioned above – to even higher horizons. Recommend

  • Alishba
    Jul 31, 2017 - 10:04PM

    Nyce step of being employeedRecommend

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