A paradigm shift is underway in the global landscape; economic gravity shift from the West to the East. Global tech is experiencing a similar stint. Tech companies like Google, Apple and Amazon continue offering higher wages and better growth opportunities to South East Asian talent. Although Silicon Valley companies are not abandoning their roots, they are actively hunting for brainy computer engineers, low cost solutions, business opportunities as well as tax optimisation mechanisms.
This is an immense opportunity to create high-earning jobs, which will then lead to a higher demand for quality products, higher overall consumption and better living standards. We just have to be careful in avoiding premature deindustrialisation; thus the need to simultaneously train human resource for an upcoming industrialisation boom.
At the same time, this western quest for cost-effective manpower has caused a brain drain in Pakistan that has to be stopped. This requires the government to act and produce a conducive business environment by designing incentives to retain talented youth for the country’s own tech ecosystem.
In a recent Bloomberg survey, experts predicted that China and India will become the world’s centres of technological innovation within the next 15 years. Since we are gatekeepers between the two rising technological nations, and Pakistan’s digital potential is immense in terms of talent and cost competitiveness, this offers a huge opportunity.
The IT sector has been growing exponentially, with the industry doubling in the past four odd years, and there is a positive trend towards further growth. Internet penetration rates are improving, human capital is quickly developing, broadband subscriptions are increasing and Pakistani expats are creating ripples in the West through their entrepreneurial and technical talent. A lot has been accomplished by the Ministry of Information Technology and Telecommunication in the past few years.
But is the recent imposition of taxes on smartphones and internet a good idea if it has discouraged people from technology upgrades? Probably not.
Officials at the China Telecom Pakistan believe that only lowering taxes can encourage smartphone usage. This can then snowball into more efficient and effective e-commerce, e-education, e-health and e-governance activities.
If we really want to leverage technology in a systemic, sustainable and scalable manner from a policy view point, IT infrastructure expansion must be a core focus. The 3G, 4G and LTE services must be as accessible and available in rural areas as they are in urban centres.
For Pakistan’s IT sector to grow and develop, we must liberalise the policy regime to support private initiatives, allow software technology parks to emerge, lower tax rates, promote software and services exports and enable public-private partnerships.
Taking some of these steps can help companies develop sophisticated operations models, create on- and offshore global delivery models, cultivate long-term relationships with customers, expand the scope and scale of services offered, innovate and evolve price models that are customised to suit unique needs of customers. All of this will enable tech companies to attract and retain human capital — curbing brain drain while adding to the GDP.
It is actually very unfortunate that our vision-less and incapable leadership failed to learn from India and China. However, given the right focus and policy, Pakistan can still rise along India and China.
It is now up to the Ministry of Information Technology and Telecommunication to keep pace with the rapidly-changing trends in software technology, implementing strict copyright laws, creating the best possible environment for Pakistani software exporters to do business in Pakistan, simplifying procedures for software companies to get themselves listed on overseas stock exchanges like NASDAQ and create venture capital funds to incubate startups.
Published in The Express Tribune, August 4th, 2019.