By Fouad Riaz Bajwa
Published in: CIO Pakistan, Issue 2
Date: September 2008
For those who are still not aware, the Federal Ministry of Information Technology and Telecom (MoIT&T), Government of Pakistan are still in the process of redrafting the IT Policy for Pakistan. While this is a step in more confused circular pattern, what does this mean for the Pakistani CIO trying to plan his next infrastructure deployment?
The face of the IT industry is Pakistan is yet to receive another blow of significant change in one more effort to boost its current state of affairs of a lingering ecosystem. Let me share some perspectives. Whether or not this revised policy will have a positive or negative impact on the IT industry and general business, commerce and industry, will be determined by its objectives, and current or future actions.
The IT Industry in Pakistan has been booming for the last decade but at the same time, has been facing a continuous round of set backs over time due to the changing shape of the shift in international social and economic dynamics. One of the major markets that the Pakistani IT business and industry has been catering to is the United States. The US market has been giving various negative economic shockwaves first in the form of the “Dot Com Bubble Burst” and the 9/11 disaster that not only rocked Pakistani IT businesses but also significantly affected the state of the world’s developing economies. Now the US is under the pressure of increasing oil prices, its global War on Terrorism activities and of course now its economy facing a recession.
Amidst these shockwaves, the Pakistani IT industry discovered in detail IT business opportunities in the fields of informatization, automation and call center services both at the enterprise and small and medium levels and estimated this market to contribute to the income of our industry. Major consumers in the local IT market scene emerged in the form of the Government of Pakistan and its constituent departments as well as provincial level Governments around the country. A large number of industrial groups, multinational companies and the innovative banking and financial services provider segments have been a major contributor to the local economy.
However, within the identification of a local market for IT and outsourced services, Pakistan lost a number of large-scale IT firms due to the shockwaves from abroad and only those firms survived that had the backup and sought a constructive strategy to gain buy-in from a plummeting economy. The local IT industry has also seen a significant increase in revenues not by the software or hardware industries but due to the foreign investment directed towards the Telecom Sector de-regularization activity. Investors have established business investment consortiums and clusters while stepping into Pakistan from regions like Europe, Scandinavia, Middle East and the Asia Pacific.
The local IT industry has been reporting significant gains in revenues with evidence from the State Bank of Pakistan and the Pakistan Software Export Board but are these gains a grand number to feel pride in? Unfortunately not! It can be experienced from our close by neighboring country, that some of their local giants have individual yearly revenues far exceeding the total revenues derived by the IT industry within both local and international markets. So where does the problem lay? In a discussion with a representative from the world’s leading search engine and online advertising player, only one company in India provides more revenues in online advertising then all Pakistani companies combined. So what’s the real problem?
The problem can be attributed to lack of strategic direction in the national IT planning activities of course this is where an IT Policy and its affect on the IT and general commerce comes into play. National level IT planning also requires a very strategic direction and focus. It has to be planned in such a way that all stakeholders are present within the planning activity from the beginning so that they may today or maybe tomorrow benefit from such a policy or even the opportunities generated by technology. In order to engage the stakeholders in an affective manner ensuring full diversified participation from all sectors of society and economy, such as the academia, public sector departments, private sector and civil society, the Government has to use dual means.
First, the Government has to generate the capacity of its citizens to embrace and engage technology and employ its uses in various venues of life. Once this has been achieved, a culture of technology becomes the driving force for a future IT industry development and growth. The impact of such an industry has both social and economic affects as technology becomes a daily life tool rather than simply a gadget based fascination for its users. Now to explain Pakistan’s case, we never had a strategy nor an IT policy that focused on creating a culture and increasing capacity on an ongoing basis in line with the changing social and economic environment. Recommendations and policy amendments have been coming amidst catering to governance economic deficits ignoring that the IT industry may suffer due to lack of proper planning and backup support by the government.
Stepping back into our neighbouring country’s shoes, their strategic technology plan was based upon informed research about the changing dynamics of the world and developed in early 1970’s. Its implementation began in ten year implementation cycles reviewed every five years. The beauty of their planning was that every time a new government came, the technology strategic direction was not altered and allowed to continue its growth. From 1975-1985, they developed the local technology establishment to cater to the needs of capacity building. From 1995-2005 they established both a local and international culture to invest and cultivate their technology talent.
From the year 2005 onwards, they have initiated the wave of owning and leading the world’s largest ITeS companies in their pledge to become a super power.
Capacity and Culture are the two key determinants in creating a technology ecosystem because demand and supply of both human resource and infrastructure is based upon these two determinants. If there are no consumers, there is no demand and if there is no demand, there is no supply, but what if their were abundant consumers as well as demand but the supply chain was badly affected, would the culture be able to benefit from skilled manpower? In this case both society and economy are the culture. To be more precise, let’s take the talent crisis into account. There is uproar by the IT industry that the availability of skilled IT talent resource is on the decline. How can this be when the government and academia have claimed to be training thousands of IT graduates each year?
In Pakistan, it’s due to the culture. Capacity has always been there but the culture to use and benefit from it has been lacking. In our case, we haven’t been able to use technology to our key benefit. Concentrating IT to only urbanized regions isn’t a successful strategy especially when the country’s sixty seven percent population is Agrarian and the national economy depends heavily on its agricultural cultivation. This population is also heavily concentrated in the rural parts of the country and the only technology advantages they may have today are cell phones or radio sets. I would not attribute television in this case because our country has an Energy Crisis underway that is nowhere near its end for at least half a future decade.
Realizing this that the Pakistani population is both 67% agrarian and rural will help to understand that only 33% of the IT capacity and culture is only available to 33% of the citizens of Pakistan but only a minor number of that benefits from technology because there is a significant lack of language and capacity skills within the general public of Pakistan. If we practically look around ourselves in the urban regions, we see a majority of people living in poverty and the second majority is the middle and upper class mostly participating in the IT industry and related businesses with only a handful actually owning IT businesses in the country. Therefore we have to rethink both as a country and its government that how much IT capacity and culture have we really developed? How can a new policy help in further increasing both the capacity and culture for IT adoption and usage by the rest of the population?
Of Working Groups
The MoIT&T last year initiated a development project titled the “National IT Development and Promotion Unit (NIDU)” that targets at seeking out areas of key importance and multi-stake holder input on the same before devising policies and guidelines for the better use of IT in general. There are various stakeholders engaging with NIDU and MoIT&T at the Pakistan ICT Policy Monitor online mailing list located online. Pakistan ICT Policy Monitor mailing list contributes to National IT Policy related discussions and ICT penetration in Pakistan.
The mailing list comprises of legislators, civil society and various public and private stakeholders. It is located at http://tech.groups.yahoo.com/group/pakistanictpolicy but the 200 members of this forum cannot be considered as the collective voice of Pakistan, a nation with a population of over 160 million people.
The NIDU policy interventions are currently been taken online and issues will be deliberated in face-to-face meetings recorded from this forum as well as stakeholder interaction. Many stakeholders connected within the policy development framework activities are not able to engage within these interactions, these also include CIOs from academia, public and private sectors and the civil society. I would like to invite CIO Pakistan Magazine readers to join in on these discussions and recommend means and ways to promote the IT culture and capacity within the country as well as suggest ways to improve our export markets for ITeS and BPO offerings.
Fouad is convinced that the road ahead is a collaborative one.
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