Amir Saeed

Pakistan requires strategic reforms for IT sector growth to address skill shortages, enhance competitiveness and unlock global market potential.

Talking to WealthPK, Ahad Nazir, Associate Research Fellow at Sustainable Development Policy Institute (SDPI), highlighted that Pakistan’s IT exports have shown significant growth, but strategic reforms are essential to compete with global IT powerhouses. “Increased internet penetration has helped boost digital trade, create jobs, and open up investment opportunities, with the digital economy offering new growth avenues in IT services, e-commerce, and fintech.

However, the country’s untapped potential in global markets remains substantial,” he noted. The export remittances from ICT services increased by 32.7% in the first five months of FY25, reaching $1.53 billion, compared to $1.15 billion in the same period of the previous year. Nazir further highlighted that the rise of the gig economy and e-commerce has stimulated entrepreneurship, but a shortage of relevant skills hinders further growth.

“Digital literacy programmes and workforce upskilling are crucial for unlocking this potential, which could generate hundreds of thousands of jobs in software development, digital marketing, and fintech.” “To replicate the success of countries like Vietnam, Pakistan needs to improve its digital infrastructure and regulatory framework. This would attract foreign investment and integrate businesses into global value chains, boosting technology-intensive exports,” he said.

Nazir emphasised that enhanced digital literacy and infrastructure can also increase access to global markets, facilitating digital trade and foreign exchange earnings through the gig economy. “By following successful models like those in Vietnam and Bangladesh, Pakistan can significantly enhance its global market access and competitiveness.” Talking to WealthPK, Mutaher Khan, an IT professional, pointed out that the country’s IT sector is experiencing growth, but to reach higher targets, strategic reforms are necessary.

According to him, two key areas require attention: increasing the supply of skilled labour and facilitating expansion through strategic acquisitions. “Firstly, the supply of skilled IT labour needs a significant boost. Currently, around 30,000 to 35,000 IT graduates enter the workforce annually, but this number should be increased to at least 70,000 to 80,000. This requires investments in education and stronger linkages between educational institutions and the industry to enhance productivity and quality,” he said.

Secondly, he added that Pakistani IT companies need to explore inorganic growth strategies, such as acquiring foreign companies to expand their services. “However, current regulatory obstacles hinder this process.” “The government should facilitate such transactions by reducing restrictions on taking capital abroad, allowing companies to invest in foreign entities more freely.

This would enhance their global presence and contribute to the overall growth of Pakistan's IT sector. By addressing these challenges, Pakistan can better compete with IT powerhouses,” Mutaher said. He emphasised that reducing the cost of hiring skilled talent is also crucial. “This involves creating a more favourable business environment that supports IT companies in attracting and retaining top talent, thereby driving innovation and growth in the sector.”

Credit: INP-WealthPk