Is Web 3.0 a $100 billion opportunity for Pakistan?
The most transformative invention in the last century has to be the internet, which is bending the arch of human history towards democratisation of power, disinformation and making daily life a little easier. Today, in a poetic twist, the internet which disrupted so many industries is on the cusp of being disrupted itself. Web 3.0 is the most significant disruption to the internet since the internet was invented. But what in the world is Web 3.0, beyond the Bitcoin bubble?
Well, it’s a bit of a people’s revolution actually. A few companies ala Facebook, Google, Amazon and Twitter control too much of the internet as we know and experience it today i.e. Web 2.0. Now there’s a movement to snatch some of that power back and the umbrella term Web 3.0 broadly defines the different vectors in which this movement is progressing. This includes cyrptocurrencies such as Bitcoin, blockchain technology, NFTs, decentralised finance and virtual reality worlds. It sounds really complex and futuristic but the basic premise is that Web 3.0 empowers the individual over the company so that the internet can be accessed by everyone with security and privacy, without having to go through corporate gate keepers.
This emerging ecosystem is expected to grow by more than 40 percent per year, leading to a growth in blockchain technology market capitalisation, of which crypto assets are a core component, from around $1.5 trillion today to almost $50 trillion by 2030 (buy that Bitcoin on the next dip!). More importantly, Pakistan’s talent base has the capabilities to realise the benefits of this opportunity for the global Web 3.0 ecosystem. If empowered to do so, this talent can bring in significant foreign exchange earnings, develop globally competitive internet businesses within the country, and create an opening for the country to leapfrog ahead.
This emerging ecosystem can generate over $100 billion in total income for technology talent over the next twenty years in Pakistan. That’s according to a new working paper from PakLaunch.Com and the Atlantic Council’s South Asia Center titled ‘Realizing the Promise & Potential of Web 3 for Pakistan’. Authored by the irrepressible Uzair Younus, who consulted some of the brightest Pakistani minds operating in this space, including Ali Farid Khwaja, Salahuddin Khawaja, Aly Fahd, Kalsoom Lakhani and many others, this paper should be mandatory reading by Pakistan’s policymakers (and one almost wishes that Tania Aidrus was still leading Digital Pakistan with the frenzy of energy she brought to the table).
The premise of Pakistan’s potential to become a player in Web 3.0 is anchored in three pillars according to the paper. First, Pakistan is one of the youngest countries on Earth with a youth bulge of digitally connected citizens. This talent has made Pakistan one of the largest freelancing markets in the world, boosted the country’s IT exports, and attracted global investors to the country’s start-up ecosystem.
Second, young graduates in Pakistan have historically aspired to work at leading multinational companies. This trend, however, has shifted in recent years. Pakistan’s emerging start-up ecosystem, supported by public policy interventions in recent years, has meant that young Pakistanis now aspire to be entrepreneurs, particularly in the technology space.
Third, Pakistan was one of the first countries in the global south to develop a digital identity management system through National Database and Registration Authority, which has over the years supported countries around the world to develop their own identity systems. In recent months the SBP has developed an interoperable payments system called Raast, which leverages digital identity to provide seamless, low-cost payment services to citizens. In combination, these technologies allow policymakers to link identity with payments, thereby allowing the creation of an effective authentication, traceability, and transparency system that can be connected to Web 3.0 architecture, including cryptoasset trading and investment.
Pakistan now needs to realise the importance of policymaking and regulation that encourages innovation and investment in this space. This is a once in a lifetime window of opportunity that won’t come again and enables Pakistan to break the shackles of its rent seeking elite as this isn’t an existing industry. We must seize this opportunity for its transformational impact on our economy, society and demographic youth dividend.
Published in The Express Tribune, February 20th, 2022.
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