With Dow Jones News Corporation joining hands with ICIL to tap Pakistani market, the heat is on in the data and information services business in the country. Dows interest comes at a time, when a number of other local players - some with technical assistance of their regional peers - are also planning to open their portals and offer business data services.
In the face of economic slowdown, however, even the existing players are facing a bit of trouble as many equity brokerage houses and a number of other financial institutions have offloaded the data terminals of Dows competitors, such as Bloomberg and Reuters, in order to save costs.
But, economic blues isn the only concern. With the arrival of new foreign and local players the market of data services business will soon be saturating given a) the very small size of target market and b) the limited number of data offerings thanks to the undocumented nature of Pakistans economy.
Financial institutions such as banks, trading firms and brokers are mostly tapped already, while educational institutes and policy research think tanks are few and far between. Besides, their scholarship isn well-researched or sophisticated enough to require comprehensive data.
Since there is little one can do to expand that market, data service providers are left with the authorities ie the government especially commerce, agriculture and foreign ministries, central bank and other regulatory bodies as prime buyers. But then, they already have most of the conventional data like GDP, inflation, monetary and fiscal aggregates, price and volume of capital markets and others - many of which they gather themselves.
So, with the market for conventional data almost saturated at one end - and little room for expanding the size of the market itself at the other, data service providers must now start eyeing the undocumented sector.
It will be expensive to do so, due to high cost of data acquisition in terms of time, money and efforts (political in some cases) but the returns can be phenomenal given that Pakistan is the centre-of-all-attention these days and its in the interests of its allies and global financial institutions to keep the country economically stable - which, of course, requires better data to base the decisions on. One way to work around the injury and to lower investment requirements is to attract funds in the form of grants and aids of various international pro-transparency organisations. The other way could be, to get the project funded by the government itself - but that would require some shrewd politicking.
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