Over the past two decades, the technological sector has witnessed unprecedented growth because of the new technological advancements, especially the increased interconnectedness and propagation of smart devices at service of almost every individual around the world. Techpreneurs are the billionaires of the modern era.
Techpreneurs and Economic Future of Pakistan
Significance of technology in the modern world:
Technology has become the epitome of the modern digital world. Digitization is even one of the aspects of technology, and it has to reshape the practicalities of the world. Even the contemporary world’s leading and richest businessmen and entrepreneurs such as the Bill Gates (Microsoft), Jeff Bezos (Amazon), etc. became billionaires by investing in technology. On the state level, we can apply this situation and presume that the states who would invest in technology would have bright economic prospects align for them. A number of IT graduates and young entrepreneurs are fancying of the next billion-dollar idea. This idea is not far-fetched. A small teM of young Estonians design Skype in 2003 which was finally sold to Microsoft for about $8.5 billion in an all-cash deal! All tech giants across the globe have had humble origins. WhatsApp was sold to Facebook for $19 Billion that is almost three times Pakistan’s defence budget. So you can see how much the scope and potential of this
sector is and how it can prove vital for Pakistan to reshape its economy.
The Case of Pakistan:
As a nation, Pakistan is still the early stage of tech or digital revolution even after 20 years of online access. While we have moved from modems to broadbands to smartphones and saw a transformation in the way we carry out our daily chores, the fact is that unfortunately, Pakistan has been unable to fully exploit the opportunities offered by Information and communications technology ICT. Pakistan failed to occupy a place in the top 100 countries of the World Economic Forum’s Technology Readiness Index, which depicts an unfortunate reality.
However, there is a bright side. Pakistan young, energetic and tech-savvy population, market of more than 220 million people and increasing levels of local capital are making new avenues and opportunities for tech entrepreneurs. Pakistan’s tech industry is shaping up very nicely in contemporary times. The country produces more than 20,000 IT graduates every year and has launched more than 700 tech start-ups since 2010, of which nearly 75% are functional even today. The tech industry has the potential to really boost the country’s economy, especially in these perilous times of pandemic and fiscal restraint.
Success Story So Far:
With the latest technologies and access to faster internet, the tech industry is rendering services and products, across sectors, which are increasingly dynamic and innovative.
Patari, an online streaming app and a household name for music fans, made headlines as it procured 200k in seed money at 2017. In 2015, Eatoye, an internet food delivery service that has been obtained by one of the world biggest food markets, FoodPanda and continues to expand over Pakistan.
More lately, Airlift nabbed $12 million in Pakistan biggest Series A funding, a company first substantial round of venture capital funding ever for a startup in whole South Asia. It a ride-hailing startup that connects passengers with buses at a fixed-rate, working in Pakistan biggest cities. There are hundreds of other success stories like these that encourage the country and build expectations for brighter prospects.
Pakistan has now initiated a Digital Pakistan initiative, aimed at providing a comprehensive cover to government’s multidimensional goals, such as job creation, ending corruption and supporting and promoting the economy. Underpinning this campaign are the 5 core pillars of the strategy: access, connectivity, digital infrastructure, e-government, digital skills, training, innovation and entrepreneurship.
Start-up incubators and accelerators are also springing across the country operated by both the public and private sector to encourage the development of spinoffs and enhance access to financial and technical resources. Around twenty incubators have been established in collaboration with Plan9, a PITB run technology incubator. Till now, it has created nearly jobs and made an investment worth $5.8 million.
Economic Future of Pakistan:
Availability of Skilled and Cheap Labour:
The tech industry is highly knowledge and skill intensive. It may have the ability to resist disruptive energy supply, but it won’t flourish without an adequate supply of skilled labour.
Official statistics confirm that 10,000 IT graduates enter Pakistan’s workforce every year. At the same time, Pakistan also ranks better in terms of cost than many lower-middle-income nations group. The average yearly expense of a software engineer at Pakistan is 1/5th of the price in the USA and Europe. But of the total graduates, only under a thousand graduates are products of Tier 1 universities and of those around half fulfill the skills required for technical input required by the industry.
The technology industry depends on the skills of two types that are technical and specialized skills to develop and layout IT products and expertise to create innovative business models and marketing techniques. So, fortunately, in the coming future, Pakistan would have a lot of skilled indigenous labor.
Not Having the Right Eco-System:
The nation has not yet established an ecosystem in which an entrepreneur is raised, and educated in Pakistan and will go onto register his/her firm in Pakistan and also make it large. Young Pakistani entrepreneurs struggle to come up with their thoughts. At precisely the exact same time, they’re oblivious of how to function from the industry and the way to draw overseas investors.
However, Pakistan has a flourishing freelance market. Globally Its ranked 4th Concerning in term of freelancers employed in software development and technologies.
Access to funding is a substantial barrier. In 2017, just nine Pakistani startups received venture capital financing in contrast to 34 in Nigeria, 38 from the UAE and approximately 790 in India. In general, Pakistan technology startups raised under $30 million in 2018 in comparison to
nations like Indonesia raising over $274 million in 2018.
The matter is twofold: regulations make it cumbersome to establish a fund within Pakistan; and
the same regulations make it tough to extract money out of the country.
International venture capital investors find the process of investing, using stocks registered and issued with red tape. Approvals are required from various government departments like the Securities and Exchange Commission of Pakistan, Competition Commission of Pakistan and also State Bank. This would put off anybody who has the choice to invest elsewhere in the world. Because of over-regulation investment funds choose to operate from outside of Pakistan.
Unprecedented Growth and Predictions of Overseas Pakistani Techpreneurs:
Hena Husain, the founder of ‘The Content Architects’ (a London-based communications startup)
said, Pakistan’s tech ecosystem has been slowly gaining momentum in the last few years," It's
home to a strong tech talent base and it's still competitively affordable, which makes it ideal for
early-stage founders like me.
Hena’s company operates with a development team based in Karachi. Hena says that the growth
in Karachi's tech industry is accelerating; by the day, which reflects a broader trend across
Pakistan was also ranked as one of the fastest-growing economies in Asia in McKinsey & Co latest report. The same report showed that 720 startups had been created since the year 2010 among which 70% are operational and 100 startups successfully raised funding for their cause.
For many familiar with Pakistan’s startup scene, it’s hard to pinpoint what exactly triggered its growth. Iskander Pataudi, a Pakistani-born tech expert, serving in Berlin, said that the tech scene emerged organically. Technology is booming around the globe, and Pakistan is an untapped tech market. He stated that a few Pakistani tech startups have raised huge funding rounds at a time where our economy is just keeping its head above water. This makes sense, considering we have a huge market of young, digitally-savvy consumers and increased 3G and 4G connectivity.
Which steps are required to boost the tech industry and ultimately the economic future of
In order to fully understand the potential of the tech sector, the country needs to remove the main obstacles that are limiting growth. Despite all the positive reform efforts, a comprehensive and overarching IT policy is still missing in the country. Convergence to a central policy document will help avoid overlap among the various policy actors and help assign clear responsibility to every stakeholder.
Secondly, the government of Pakistan should open up procurement for the private sector to encourage the tech sector to build its portfolio, get exposure to large scale projects and pitch for similar projects in the foreign market along with creating more job opportunities. Improving labour supply is a long-term objective of the country. However, some quick fixes can be implemented to relieve this market constraint partially. Pakistan can build innovation clusters where industries and educational institutions can come together to form specialized research
hubs. The country also needs to enhance its learning by doing culture as most graduates take up to a year at least to fit into the industry. Finally, the HEC (higher education commission) must take some serious decisions about the role it can play in fostering a culture of tech innovation, creativity and entrepreneurship.
Check out? Startup Lahore: Bringing the Finest Techpreneurs to Lahore