Coming through: Undeterred by challenges, IT industry grows steadily

Skilled workforce, entrepreneurship trend main drivers of 15-20% export growth.

KARACHI:

Despite domestic and international challenges, Pakistan’s information technology (IT) industry has recorded steady growth with key support coming from talented human resource and entrepreneurship, say industry experts. The academia, however, needs to do a better job because many graduates lack the skills needed to take the industry a step forward, they say.

“Year 2011 proved to be good for the IT sector,” Zia Imran, Managing Director of Pakistan Software Export Board (PSEB), said. Despite challenges in the domestic arena, the country’s negative perception in the West, rising tensions between Islamabad and Washington and the global economic slump, the industry has shown steady growth, he said.

“Logically our exports, of which 60% to 70% go to the US, should have declined due to these problems, the PSEB MD said, but the industry actually increased its market share in America.

The IT sector has been growing at 15% to 20% for the last three years. The growth in 2011 was about 15%, he added.

Unlike normal exports that can be calculated at ports, Imran said it is difficult to calculate figures for the export of software and IT-enabled services (ITES) as they are traded on the wires. However, according to a formal study conducted by PSEB, last year’s exports stood at $560 million based on conservative estimates, mainly representing ITES revenues. This could be as high as $860 million as per optimistic estimates.

The country’s talented workforce and rapidly growing entrepreneurship trends, sources said, are the driving forces, contributing to the industrial growth.

“Pakistan’s talent pool and entrepreneurship are primarily causing this growth,” said Wahaj us Siraj, Convener of the Internet Service Providers Association of Pakistan (Ispak).

Siraj, who is also the CEO of Naya Tel, a broadband service provider, said a lot of young professionals, who started their businesses individually, are now operating their own companies with 200 to 500 employees.

Leading global players like Microsoft also recognise this very professional talent that exists in the country and are expanding their operations – offshore business processing and business process outsourcing in particular – in Pakistan.

Pakistanis account for 40% of total software development in North Africa, East Mediterranean and Middle Eastern Africa, said Sayed Hashish, Microsoft’s General Manager for this region excluding Middle Eastern Africa. Microsoft recently launched the MS Customer Immersion Experience facility in Karachi with an investment of over $1 million.

Hashish said a lot of applications for Windows Phone came from Pakistani IT students even before its launch that indicates the strength of talent the country has.

Growth prospects

Although the industry’s growth has been steady but there are indications for future growth, according to experts.

From growth perspective, the mobile software market is a positive trend for the IT sector, PSEB MD Imran said. A company can develop its software and put it up on Apple’s or Android’s app store now. If the software is successful, the company gets the money, in that case nobody even bothers which country developed the software.

In some cases, even individuals from Pakistan have sold their software on these websites and made between $40,000 and $80,000 in just four months, he said.

The talent is there, he said, but the institutes need to produce high-quality graduates to meet growing demand both locally and internationally.

Exports-wise some companies are still getting work while others are not happy, Imran said. Currently, the industry is working at full capacity on the HR side but that does not mean all IT professionals have jobs. That is because many fresh graduates do not have the talent the industry needs, he said.

Growth estimate for the first half of 2012 is about 20%. “If we can do better at producing quality professionals, we can certainly grow beyond 20%,” he added.

Published in The Express Tribune, January 14^th, 2012.