Pakistan is known as the land of opportunity which has tremendous and unmatched potentials. While technology-enabled innovation is the major spur to productive growth, rapid advances in technology are enabling new business opportunities. Digital progress is the result of general-purpose technology that has the flexibility to transform itself as the driver of change for boosting productivity across all sectors. By reducing the cost of information, digital technologies could greatly reduce the cost of economic and social transactions for firms, people, and the public sector.
The digital revolution is well underway and is impacting the parameters of large-scale manufacturing, retail, and banking, and logistics businesses. For developing countries, there will be pressures on skills delivery, labor migration, and productivity. Information technology has revolutionized social and organizational life around the globe.
Given the newness of information technology as a technology, there is a lot of potentials that need to be explored. It is, however, argued that information technology can revolutionize economic development, by the same coin, although its mismanagement in the adoption process can end up in problems or even straight failure of technology at the business end. As Pakistan went into lockdown last year, residents used smartphones, tablet computers, and laptops to work, study and stay connected.
For service providers, being able to handle mobile traffic in a huge country like Pakistan is a challenge. Combined with the increase in smartphones and data use, service providers know they need to act to meet the expectations of subscribers. A striking fact is that less-developed economics are quickly adopting these technologies and are taking a lead in the usage of digital technologies.
In Pakistan, where a large number of young population is preparing to enter the job market, policy intervention to create linkages with the advanced curriculum through digital partnerships may lead to catching up with required skills in a timely manner. There is a clear gap between institutions and technology in Pakistan.
The government tends to adopt technologies for service delivery with little emphasis on empowering citizens to hold them accountable.
The bureaucratic structures remain patronage-based with a focus on cash transfers, payments, and issuance of permits. Pakistan also has the comparative advantages of a young, educated population and lower median wages than the West. Academia and industry need to invest in their students and employees by offering relevant training programs to prepare them for future job markets.
Digital technologies transform global trade, the reallocation of factors of production, and eventually increase productivity and growth. Digital technologies also enable industries to produce more sophisticated products and services and tap into new export markets. In turn, digital trade enhances Pakistan’s domestic competitiveness as it allows firms to become more productive. In this context, a factor determining digital trade is data. Many digital technologies thrive on data, which often needs to flow across borders. Encouraging digital trade and cross-border flow of data through open markets will ultimately enhance Pakistan’s level of development.
Pakistan, which has about 60% of its 200 million population in 15 to 29 age group, represents an enormous human and knowledge capital. Pakistan has more than 2000 information technology companies & call centers and the number is growing every year. Pakistan has more than 300,000 English-speaking. Information technology professionals with expertise in current and emerging information technology products and technologies. More than 20,000 information technology graduates and engineers are being produced each year.
The Government of Pakistan (GOP) continues to facilitate the information technology industry through numerous sustainable development and accelerated digitization projects, research, and innovation, software technology parks, subsidized bandwidth, international marketing, international certifications, internships, and training. Incentives to bolster growth include 100% equity ownership, 100% repatriation of capital/dividends, tax exemption on information technology & ITeS export revenues, tax exemptions to startups, and subsidized state of the art Software Technology Parks.
The State Bank of Pakistan’s (SBP) State of the Economy report offers some valuable insights under a special section titled “Covid-19 and the Need to Boost Digital Connectivity in Pakistan”. To begin with, e-commerce had a great year with total sales surging by 55.3% to Rs 234.6 billion in 2019-20 from Rs 150.8 billion. Unsurprisingly, cash-on-delivery made up the bulk of that, but digital payments still accounted for almost 40% of the value. The volume of interbank fund transfers (1IBFT) reached 70.77 million in July-October, soaring by a staggering 309.6% over just 17m in the same period of last year.
Against 40.43 million recorded in the preceding four-month period of 2020 (March-June), the growth rate was 75%. The COVID-19 pandemic has reinforced the importance of expansive high-quality connectivity, which is required to ensure social equity and a non-distortive platform for economic innovation. Remote connectivity for students across major cities and the rapid rise of freelancing is real-life use cases on the ground.
As Pakistan plans its recovery, there is a strong case for a policy rejuvenation. In the battle against the COVID-19 pandemic, the digital economy with its strong vitality and great development potential has effectively hedged the downward pressure of the economy in some countries including China and Pakistan. Hence, it’s time we give full play to the engine of the digital economy to achieve high-quality development.
Policies on digital safeguards are critical for keeping the cost of doing business competitive and controlling potential polarization within the labor force. The full benefits of digital transformation will not be realized unless countries continue to improve investment climates, invest in appropriate education and health and promote good governance. In countries where these fundamentals remain weak, digital technologies have not boosted productivity or reduced inequality.
This move demonstrates that Pakistan is accelerating digitization of the country, which includes successful introduction of the digital account, provision of lifestyle banking, and investments. As in the case, Pakistan`s efforts on the digital growth path will improve the business environment, attract domestic and foreign investment, and accelerate the development of the national economy. Digital technology heralds the beginning of a new era, and it will usher in broad prospects for development in the form of the digital economy.
Pakistan’s commitment to the development of the digital economy is another right choice. One right choice after another entails the wisdom and correctness of the policies, which give Pakistan great hope for fast economic development. The digital economy was an important path to activate the consumer market and strengthen the real economy. Digital technology has given birth to new Internet models such as live broadcast economy, cross-border e-commerce, Internet finance, and new industries such as online education, Internet health care, and online office. As a result, it creates a large number of individual and micro-economies, new employment space and opportunities, and more convenient digital products and services.
Rezwan Ullah, Beijing Institute of Technology, also contributed to this article.
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