It is heartening to observe that a number of recent articles in certain foreign publications have made an encouraging note of Pakistan's nascent IT industry showing tremendous progress - despite certain challenges - the foremost among them being the worrying law and order situation.
Pakistani IT industry, the articles point out, is carving a niche for itself at the global level while the country witnesses one of the most critical times of its political history. While Pakistan's IT sector has generally been unheard of as compared to the IT powerhouse next door - Bangalore in India - one feels happy to read that even certain advantages over India are being signalled at.
Information and communication technologies, according to the official documents of Government of Pakistan, are among the priority areas for the government. The Medium Term Development Framework 2005-10 seeks to move towards a competitive and technologically driven knowledge economy.
In the just ending financial sector 2006-07, some 6 billion rupees were allocated for the 'Information and Communication Technology' sector. The initiatives taken during this period focused on three major areas ie human resource development, strengthening of IT industry and e-ennoblement of government/public sectors organisations.
Pakistan was able to exceed its software export target of US 108 million during fiscal year 2006-07, up more than 50 per cent from 72 million dollars of 2005-06. More than fifty percent growth is indeed worth applause. Keeping up the same rate of growth, it is hoped, exports can go beyond $160 million mark in financial year 2007-08.
Although the overall figure looks small, experts believe that Pakistan's IT export revenue is grossly understated. For every dollar of export earning coming to Pakistan, IT companies keep, it is estimated, some three dollars overseas. At this estimate, software exports alone should be in the vicinity of 430 million dollars. A study some time ago estimated Pakistan's IT revenue in 2004-05 at $400 million. That was three fiscal years ago. So, as a whole, Pakistan IT industry cannot be termed as 'small'.
According to a report of Indo-Asian News last month, the country's IT sector is a $2.4 billion industry with annual exports of software and services amounting to $1.4 billion. IT spending in Pakistan is estimated to reach about $1.5 billion and is projected to grow at 35-40 percent annually.
The Pakistan government, the single largest spender in the domestic IT market, is expected to bill up to $400 million per annum for the purchase and upgrade of software and hardware. Multinationals and foreign governments are estimated to flush $200 million a year by engaging Pakistani companies for technological services.
Pakistan has launched a major drive to step up IT exports to the Gulf countries as the six Gulf Cooperation Council (GCC) countries, with market estimated at $40 billion, offer huge potential for Pakistan IT industry. Pakistan's IT exports to the Gulf had been increasing over the years.
Several IT companies of Pakistan have succeeded in making inroads in the fast growing IT market of the Middle East but there is still considerable potential for expansion in this third fastest growing IT market in the world, after India and China.
Pakistan Software Export Board's officials say that several Pakistani IT companies have developed successful business relations and have established their offices in Middle East.
Pakistani companies are now being selected for important contracts such as to deliver flexible open standards based Intel CTI technology to rapidly growing outsourcing service providers. A glaring example is one Pakistani IT company is serving 25 countries across the Middle East, Asia and Europe.
Software export activities by Pakistani companies are not only enhancing Pakistan's image abroad, but are also having a positive impact on the IT export related earnings of the country.
Pakistan IT industry has experienced a tremendous growth of 60 percent in the last fiscal year, while the industry size is estimated to be at US $2.8 billion, according to BPM 6. At current rates of growth, it is expected that the industry size will surpass eleven billion dollars by 2011.
The most important aspect of Pakistan's in-progress IT boom is that while the country has ben suffering from brain drain - a major threat for the emerging economies - the progress made by Information Technology sectors is attracting highly qualified individuals that have worked for global giants. It is very good sign for any economy, more importantly so for a country just put on the path of growth.
IT industry in Pakistan is also becoming increasingly attractive for international investors. Pakistan is also assessing a $50 million fund to help kick-start venture capital support for local companies.
As IT sector in Pakistan is growing remarkably despite the worrying law and order and deepening political crisis, one can say that enormous progress lies ahead if a favourable and enabling environment emerges in coming days.
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