In the 1990s, exports of goods and services accounted for around 16 percent of Pakistan’s GDP. By 2025, according to the World Bank, they had declined to roughly 10 percent.
Over the same period, Vietnam integrated into global electronics supply chains, while India built a globally competitive software services industry. Pakistan remained largely dependent on traditional commodities and low-value-added textiles. We have failed to capitalise adequately on successive technological revolutions, from computers and the internet to digital platforms and advanced manufacturing.
Artificial intelligence presents another opportunity, potentially the most transformative yet. It could help Pakistan break out of its low-productivity, low-innovation trap, or widen the competitiveness gap with the rest of the world.
Whether we seize this opportunity will depend not only on government policies but, critically, on the ambition of our corporate leadership. Yet, in my experience, AI has barely entered serious boardroom discussions.
Adoption is not transformation
Stanford’s 2026 AI Index reports that 88 percent of organisations surveyed worldwide used AI in at least one business function in 2025. McKinsey’s August 2026 global survey presents a more sobering picture. Only about 6 percent qualified as AI high performers, attributing at least 5 percent of operating profit to AI. What distinguishes these high performers is that they are far more likely to redesign how their businesses operate rather than merely add AI to existing processes.
Many organisations are using a revolutionary technology to perform yesterday’s work faster. That is useful, but it barely scratches the surface of AI’s potential. Corporate boards need to understand four progressively ambitious levels of AI adoption, each offering different opportunities, returns, and challenges.
Four levels of AI ambition
Level One: work faster — incremental adoption. Employees use AI to draft documents, summarise reports, conduct research and automate routine tasks. The benefits are immediate and relatively inexpensive. But the organisation remains unchanged. People perform largely the same work through existing processes, only faster.
Level Two: work smarter — systematic adoption. AI is integrated across business functions, including forecasting in finance, inventory management, fraud detection, customer service and operational planning. Decisions improve, costs decline and productivity rises. Yet departmental boundaries, organisational structures and underlying processes largely remain intact. The business becomes more efficient without fundamentally changing.
Level Three: work differently — process reengineering. Here genuine transformation begins. Instead of asking how AI can improve an existing process, management questions whether that process should continue in its present form. Consider a bank’s credit approval system.
AI can accelerate documentation, verification and risk assessment, but redesigning the entire process around integrated data, intelligent assessment and appropriate human oversight creates a fundamentally different operating model, with new responsibilities, controls, and capabilities. This cannot simply be purchased from a technology vendor. It requires leadership willing to rethink how the business operates.
Level Four: build a different business — reinvention. This is where the greatest opportunities, and threats, lie. Boards no longer ask merely how their companies should operate, but what businesses they should become. A textile manufacturer could move beyond production efficiency towards AI-enabled design, customised manufacturing and direct access to international consumers. A healthcare business could progress from treating illnesses to continuous monitoring, early detection and preventive care. AI can make previously uneconomic business models viable while undermining competitive advantages that established businesses have enjoyed for decades. At this level, AI is not merely improving yesterday’s business; it is creating tomorrow’s.
Singapore’s DBS Bank illustrates the potential of ambitious AI deployment. It reports more than 2,000 AI models across over 430 use cases, generating approximately Singapore dollar 1 billion in economic value during 2025. More important than the number of applications is their integration with changes in operations, customer experience and organisational strategy.
Such ambition must, however, be accompanied by effective governance. Accuracy, bias, confidentiality, cybersecurity, and accountability remain boardroom responsibilities, not matters to be delegated entirely to technology vendors.
Where do Pakistani boards stand?
There is no comprehensive survey of AI maturity across Pakistan’s corporate sector, and one is overdue. My experience from serving on and interacting with corporate boards suggests that AI has yet to become a serious strategic priority in many organisations.
In some, even the first level of adoption receives little attention. Employees may experiment individually, but there is no organised corporate approach. This is particularly concerning for an economy already struggling with low productivity and limited international competitiveness.
Consider our utilities, where enormous resources are lost through inefficiency, leakages, and theft. Gas companies could use AI to analyse network data, detect anomalies, identify leakages and reduce unaccounted-for gas (UFG).
Electricity distribution companies could deploy AI to identify theft patterns, detect abnormal consumption and target areas with excessive technical and commercial losses. These applications, supported by reliable data and effective management, could substantially improve operational efficiency and financial performance.
Similarly, AI could help manufacturers improve product development and export marketing, agribusinesses enhance yields and processing, and service providers compete internationally in knowledge-intensive activities. For smaller businesses, sophisticated research, design and analytical capabilities could become accessible at much lower cost.
Boards must move beyond asking whether management uses AI to questioning how it could transform productivity, competitiveness, operating models and future business. AI belongs at the centre of corporate strategy, capital allocation, talent development and risk oversight, not as an occasional item in an IT committee presentation.
Directors need sufficient AI literacy to challenge management and encourage innovation, experimentation and calculated risk-taking. If chief executives are rewarded primarily for preserving existing practices, why should they take the risks necessary to reinvent their businesses?
Government must become a catalyst
Businesses cannot build a competitive AI ecosystem alone. Government has an important role, both as policymaker and as a major customer for AI-enabled services. Pakistan approved its National AI Policy in July 2025, covering skills, research, infrastructure, innovation and responsible AI.
The real test is implementation. Government should facilitate digital infrastructure, computing resources, research, skills development, and entrepreneurship but its most powerful contribution could be creating demand through AI-enabled public services.
Tax administration, land records, healthcare, education, agriculture, utilities, and public financial management offer enormous opportunities. Government should identify specific service-delivery problems, invite competitive solutions, measure results and ensure accountability. This could improve services, reduce costs and provide domestic AI developers and start-ups with paying customers, helping build an ecosystem capable of competing internationally.
AI cannot substitute for reforms in taxation, energy, education, regulation and governance, but it can amplify their benefits.
The cost of another missed opportunity
Pakistan need not develop the world’s most powerful AI models. It needs businesses and institutions capable of using increasingly accessible intelligence to innovate, solve problems and compete.
The danger is that while other countries use AI to create new industries and competitive advantages, we remain preoccupied with seminars, policy announcements and isolated experiments that never scale. Technological revolutions do not reward countries merely for recognising their importance. They reward those willing to change how they think, invest, organise and compete.
Pakistan has missed too many opportunities to transform its economy. We cannot afford to miss this one. For corporate boards, the question is not simply whether their companies are using AI, but whether directors have the imagination, ambition, and courage to reinvent their businesses before competitors do.
Copyright Business Recorder, 2026
The writer is a former managing partner of a leading professional services firm and writes on governance, the economy, and matters of public interest
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