'Digital transformation key to economic growth'

Analysts urge adoption of technology to participate in growing global digital economy set to hit $16.5tr by 2028

KARACHI:

Digital transformation has emerged as a significant catalyst for economic growth, particularly in developing nations. For Pakistan, embracing digital technologies is no longer an option; it is a fundamental necessity for future success, said IT professionals and analysts.

With a population exceeding 240 million and increasing economic challenges, the country does not seem prepared. Leveraging digital transformation could propel the nation toward sustainable development. The global digital economy will reach $16.5 trillion and capture 17% of global GDP by 2028. This clearly illustrates the importance of technology in driving economic growth.

Pakistan's proactive engagement with digital innovation can unlock new avenues for prosperity, as evidenced by success stories from countries like India, Kenya, and the United Arab Emirates (UAE). Pakistan is uniquely positioned to embrace digital transformation, leveraging its fertile land, abundant mineral resources, and youthful workforce. The potential for digital innovation is immense. By adopting technology-driven solutions, Pakistan can revolutionise critical sectors such as governance, agriculture, healthcare, and financial inclusion.

Similarly, agriculture—a cornerstone of the national economy in Pakistan—can use digital tools for increased productivity. Precision agriculture, utilising IoT devices and data analytics, enables farmers to make informed decisions regarding water use, crop health, and weather patterns. The global precision agriculture market size was valued at $7.06 billion in 2023 and is projected to reach $19.31 billion by 2031, with a CAGR of 13.40% during the forecast period of 2024 to 2031.

Fintechs like Easypaisa and JazzCash are already transforming financial services in Pakistan, providing access to formal financial channels for millions of unbanked citizens.

IT professionals said that during the COVID-19 pandemic, Hamburg in Germany faced a significant challenge in providing timely financial aid to its cultural sector, which was severely affected by restrictions. Handling the surge of aid applications posed a logistical hurdle, as traditional processing methods would have required months. To overcome this, Hamburg adopted an AI-powered solution through SAP Business AI on SAP BTP, which automated the verification of essential documents, such as proof of event costs, revenues, and identities, to ensure they aligned with application details. In just three weeks, the system processed over 2.7 million documents, enabling swift fund distribution. Initially designed for local applications, the system's success led to its expansion nationwide, showcasing its scalability and efficiency. Key AI services, including document information extraction and business entity recognition, were instrumental in accelerating the review process, allowing Hamburg to deliver crucial support promptly.

Oil and Gas Development Company Limited (OGDCL) exemplifies the commitment to progress through digital transformation. By integrating advanced technologies across its operations, OGDCL aims to enhance efficiency and drive innovation in the oil and gas sector. OGDCL has integrated SAP applications across various functions to streamline processes.

They said the relationship between technology and economic development is well-established. Countries focused on technological advancements are advancing in all realms—harnessing data, connectivity, and automation to improve efficiency and unlock new markets. Pakistan must do the same.

Over the last 10 years, the government under various political parties had set ambitious plans for promoting the IT industry and its exports, but their efforts in terms of policy and regulatory measures have been very limited, said Tech Analyst Muhammad Yasir.

Despite the government realising the potential of IT exports to transform the current account deficit into surplus and provide jobs to millions of youngsters in a short period of time, the government carried out measures which are tantamount to negative growth of the industry, such as internet slowdowns and abrupt curbs on VPNs.

The government should align its actions with its plans to reach the set targets, urged the experts, warning that, otherwise, the country will not be capable of developing its IT industry and export streams but will face the irreparable loss of exports and reputation.