ISLAMABAD: About 42.4 percent of freelancers in Pakistan are in software development, making up about 10.5 percent of global freelancers in software development — much higher than in Bangladesh, Nepal, and Sri Lanka but lower than in India, says the World Bank.
The Bank in its latest report “At Your Service? The Promise of Services-Led Development” stated that the Pakistan Software Export Board (PSEB) reports a currently registered total of 4,641 IT firms and 4,066 call centers.
The industry is primarily spread across three major cities — Karachi, Lahore, and Islamabad, and currently employs more than 300,000 IT professionals.
According to a survey of 300 IT firms by the National ICT R&D Fund (currently known as Ignite) under the Ministry of Information Technology and Telecommunication (MOITT), 14 percent of the firms had 50 or more employees, 17 percent had 25–50 employees, and the rest had fewer than 25 employees.
The sector comprises mostly domestically-owned firms with limited foreign operations.
In addition, 13 percent of the surveyed firms were foreign, and of the top 10 exporters, only one is foreign.
However, the country’s multinational IT presence includes IBM, Oracle, and Cisco, among others.
According to the Pakistan Software Houses Association for IT and ITeS ([email protected]), the largest private sector association for the IT industry, about 53.8 percent of the industry’s revenue comes from the export market, it added.
The report further noted that Pakistan’s ICT services exports have grown by a compound average growth rate of 10.8 percent per year, increasing from $433 million in fiscal year 2009-10 to more than $1 billion in 2018-19—when more than half (52 percent) of Pakistan’s telecommunications, computer, and information services exports went to the United States, followed by 8.8 percent to the United Arab Emirates and seven percent to the United Kingdom.
The share of computer-related services within these ICT services exports increased from 44 percent to 73 percent between 2009-10 and 2018-19, with an average annual growth of 17.3 percent.
The report further noted that within computer-related services, exports are concentrated in low-to medium-value-added software services, which include enterprise planning, application development, and integration; there is limited activity in product development.
Further, low-value-added services such as call centers lead the BPO segment, accounting for 90 percent of the export revenue in this segment.
A small number of firms supply offshore services in higher-value-added segments such as banking, finance, insurance, and health care.
Still only accounting for less than one percent of world exports in computer-related services, there is ample room for Pakistan’s exports in this sub-sector to grow in the future.
However, official statistics do not capture the full extent of Pakistan’s export success.
Industry experts believe that approximately $1.5 billion worth of exports are not reported — $1 billion by small and medium enterprises (SMEs) and $0.5 billion by online freelancers.
Pakistan now has the third largest number of freelancers among IT and IT-enabled services in the world, right after India and Bangladesh.
About 42.4 percent of freelancers in Pakistan are in software development, making up about 10.5 percent of global freelancers in software development—much higher than in Bangladesh, Nepal, and Sri Lanka but lower than in India, it added.
Copyright Business Recorder, 2021