Govt Announces Task Force to Boost IT/Telecom Sector, Expected to Add $6 Billion in Export

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ISLAMABAD (Nov 15, 2018): With the IT sector growing at a fast pace, Imran-Khan led government’s cabinet has approved formation of a 17-member task force on IT and telecommunications as the country has overwhelming advantages in the sector, particularly in earning foreign exchange.

During 2016-17, Pakistan’s IT exports were $3.3 billion, which have jumped to $5 billion and are expected to grow to $6 billion next year,” said Saif Akhtar, Co-Founder of 10XC, a technology start-up accelerator and seed fund.

However, huge challenges lie ahead, and the next few years will be very crucial as the industry needs to adapt to technological changes.

The country’s service sector of which IT and telecom are part of has already surpassed traditional export subsectors and manufacturing. The government therefore wants to expand the IT opportunity and delivery contours for youth employment and export, by creating the right ecosystem.

A notification issued by the Ministry of IT today announced the approval of IT and Telecom task force.

Prominent members of the task force include P@SHA (Pakistan Software Houses Association) President and Nest I/O chief Jehan Ara, former Higher Education Commission chairman Dr Attaur Rehman, Teamup NIC Co-Founder Zohair Khaliq, Tameer Bank Chief Executive Officer Shahid Mustafa, and others.

The committee is headed by Information Technology and Telecommunication Minister Khalid Maqbool Siddiqui. IT and Telecommunication is counted as a single industry in Pakistan under one ministry, with reporting of inflows as one sector.

According to experts, three factors: youth (60% of Pakistan’s youth is below 30 years of age), technology and growth in global freelancing environment have allowed Pakistan’s information technology (IT) exports to jump to $5 billion.

According to Pakistan Software Export Board (PSEB), exports of freelancer of IT sector stands at more than $200 million per year.

Driven by global market demand for rate dilution across geographical territories, Pakistan’s IT industry is also growing faster than anticipated across different categories, experts say. Enterprise software has grown by 17%, marketing tech 15%, financial services 13%, consumer goods 9%, retail/e-commerce 8%, professional services 8%, internet of things/hardware 7%, health care 4%, media 4% and non-profit 3%.

Pakistan government has also started promoting start-ups, for example, it has given three-year exemption from taxes to the start-ups and set up national incubation centers in Karachi, Lahore, Islamabad and Peshawar.

Pakistan’s start-up sustainability is also higher compared to the global average, experts say.

Since Pakistani entrepreneurs don’t have many opportunities to explore and invest in, the gap acts as an advantage for start-ups–investors stick longer instead of quitting due to initial hurdles, an expert said.

Facebook, Amazon and other giants of IT sector are anticipating something huge in the start-up world of Pakistan as evidenced by the huge number of sponsors for Momentum 18, a two-day tech start-up conference which was held in February at the Karachi Expo Center.

According to several industry gurus PKonweb spoke with, Pakistan’s capability and capacity to export IT/Telecom exceeds $20 billion a year, given the right mix to supply and deliver in an increasing demand-driven global market. Infrastructure improvements, trainings and tax incentives are what’s needed urgently, they said.

Presently, Pakistan’s total export industry hovers in the range of $20b to $24 billion.

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