Better internet access has opened doors to new possibilities for Pakistan’s youth. Young freelancers use these opportunities to earn a livelihood for their families. From technology companies in major cities to remote workers using their 4G internet in villages, Pakistanis are excelling and competing with global talent. As of 2024, our freelancers rank 4th globally with over 400 million annual remittances to Pakistan and technology companies doing more than $2.8bn annually with more than 0.6m people employed.
The rise of the digital economy and opportunities is a bright spot for Pakistan’s economy, which has been struggling to grow its traditional export segments. Outsourced centres for multinational companies, e-commerce, game development, and business process outsourcing sectors are leading Pakistan’s digital exports.
Pakistan’s software and technology export growth is critical for Pakistan’s future to create employment and business opportunities for its youth, as well as to earn valuable foreign exchange for improving its trade imbalance.
Uninterrupted connectivity is crucial to maintain the current growth rate of IT exports
With an over 25 per cent annual growth rate in the last five years, sustaining this momentum requires consistent policy, investment in skill development, and effective branding of Pakistan as a premier technology destination.
However, policy inconsistency remains a major risk to this growth. In the past five years, inconsistency has unfortunately been the only consistent trend — ranging from the removal of promised tax breaks to issues like internet firewalls and virtual private network (VPN) blockage.
These actions have undermined the confidence of both the local industry and international business leaders who depend on Pakistan for their back-end operations.
VPN restrictions are hindering freelancers and businesses, jeopardising Pakistan’s digital export growth and global competitiveness
In the business and corporate world, VPNs are used to access corporate networks due to security issues, as these networks cannot be accessed from outside. Many companies give their employees access to their network via VPN as corporate data cannot be shared outside the network due to confidentiality, privacy laws, and data security.
Similarly, Pakistani visitors are completely blocked and restricted from many international websites, banks, and payment gateways, which see traffic from Pakistan and Pakistani users as a risk. Freelancers and remote workers use VPNs to access these websites and corporate networks.
Internet speed and latency are critical for many business applications. Online meetings are key to customer interaction and sales. Many businesses call customers to sell their products and services and to provide customer support. Many of these customers are earned after multiple calls, meetings, and the development of trust, as it is much more difficult to sell remotely.
Local businesses have products, services, and e-commerce websites where, instead of providing services to others, they create their own brands and sell globally and locally. In the digital era, brand building is about utilising social media to reach your customers.
This is also an opportunity for Pakistanis to reach global audiences, which was previously impossible when using traditional media abroad. These brands are critical to building our economy as we have to move from a services country to a product country in the long run.
Disruption to social media is causing issues for these businesses as their customers are facing issues using social media. Many companies which only sell abroad to customers using social media are also facing problems as they are getting blocked. Local e-commerce businesses are also getting affected.
The only way to access VPN is now limited to getting whitelisted, where the process is extremely slow, difficult, and impossible for many small businesses as they are not registered with the Pakistan Software Export Board, which is a key requirement for registration.
With over 0.6m tech workers in Pakistan, our authorities are approving around 200 applications per day. This is concerning for the industry where work is extremely fast. VPNs are blocked anytime without notice, and the internet slows down unannounced.
Our policymakers and implementers need to understand that we cannot go on like this as a nation. With a current growth rate of 25pc per year in information technology exports, we are targeted to grow our exports to more than $9 billion, and that’s without any intervention from the government. We should consider increasing the growth rate to 30pc or even 40pc.
We need to understand that this pillar of the economy is critical to our future. These digital workers are becoming pessimistic because of the approach and how things are being implemented. This young tech talent is highly sought after by countries in Europe, the Middle East, and Japan, where recruiters from these countries are poaching our talent to fuel their digital economy plans.
To ensure Pakistan’s continued growth, immediate and decisive actions and leadership are needed. Policymakers must prioritise a stable regulatory environment, and implementers should be very careful in ensuring ease of business, uninterrupted internet connectivity, and digital infrastructure growth with our increasing needs. Collaboration and private sector involvement in preparing these plans are key to driving growth for our technology sector.
The writer is a former chairman of the Pakistan Software Houses Association for IT and ITeS
Published in Dawn, The Business and Finance Weekly, December 9th, 2024
