Arooj Zulfiqar

Pakistan is on the path to becoming a tech hub, but to reach its full potential, the country must build a digital ecosystem that attracts investment and supports long-term growth in the tech sector.

It is important to mention here that the country’s IT and IT-enabled services (ITeS) export remittances, including computer and call centre services, declined 4% to $286 million in July 2024 compared to $298 million in June 2024. However, a 33.6% year-on-year increase was witnessed in IT export remittances for July 2024, up from $214 million in July 2023. IT exports hit a record high of $3.223 billion in the fiscal year 2023-24, reflecting 24% growth compared to $2.596 billion in 2022-23. “Despite these promising figures, attracting substantial foreign investment requires more than skilled labour,” said Muhammad Wazir, former director to the minister of science and technology. Talking to WealthPK, he said, “The real challenge is building an ecosystem that integrates modern infrastructure, policy reforms, and partnerships between tech firms and government institutions.” He added, “Several challenges stand in the way of Pakistan's tech ambitions.

One of the key issues is the lack of a streamlined regulatory framework that facilitates ease of doing business. Investors, both local and international, face bureaucratic delays, inconsistent policies, and an underdeveloped venture capital environment.” Wazir said, “We cannot expect to attract multinational IT firms or encourage local entrepreneurs without a favourable environment that reduces red tape and provides fiscal incentives. Pakistan needs to follow countries that have developed tax-friendly policies and high-tech zones.” “To position Pakistan as a regional tech hub, the government must prioritise creating a supportive ecosystem. This requires collaboration between various stakeholders, including academia, private enterprises, and government bodies.” He said attracting foreign direct investment in the IT sector required building investor confidence through transparency and stability. “Investors seek predictability in markets, and Pakistan needs to work on its image as a stable economy.

Improving governance, ensuring political stability, and maintaining transparent economic policies will all go a long way in encouraging FDI into the tech sector.” State Minister for Information Technology and Telecommunications Shaza Fatima Khawaja has announced the government’s commitment to encouraging investment in information and communication technologies (ICTs) through various flagship projects, including Special Technology Zones (STZs), a national plan for fiberisation across the country, and initiatives to make fast broadband internet and smart digital devices affordable for the public. Speaking at the 24th edition of ITCN Asia, she said the government intended to expand its efforts for local manufacturing of laptops to provide the citizens with affordable access to digital devices, and also export the product to different countries in the future.

Credit: INP-WealthPk