Pakistan’s ICT boom

Pakistan’s digital economy is becoming one of the country’s biggest economic success stories. While traditional sectors struggle with structural problems, the Information and Communication Technology (ICT) sector has shown strength, competitiveness, and steady export growth. The Economic Survey of Pakistan (2025–26) shows that technology is no longer just a support sector — it is now a key driver of economic diversification, export growth, job creation, and improved productivity.

As Pakistan moves into the next phase of the China-Pakistan Economic Corridor (CPEC 2.0), this technological progress offers a major opportunity to shift cooperation with China away from traditional infrastructure projects and toward innovation and knowledge-based growth.

The Economic Survey points to impressive results for Pakistan’s ICT sector in FY2025–26. IT export earnings rose by 19.7 percent to reach USD 3.388 billion between July and March, while the trade surplus in IT and IT-enabled services hit USD 2.911 billion. The digital economy is also expanding fast — freelancers alone earned USD 856.3 million from exports, showing Pakistan’s rising role in the global digital services market. More IT companies are registering as well, a sign that investors and entrepreneurs are gaining confidence in the sector.

Digital connectivity has also grown quickly. By March 2026, Pakistan had 207.2 million telecom users and 161 million broadband subscribers, with broadband now reaching more than 64 percent of the population. The telecom sector earned Rs 837 billion in revenue and contributed significantly to government income. Better connectivity has supported growth in e-commerce, digital banking, online education, telemedicine, and digital government services — boosting productivity across many parts of the economy. Digital infrastructure is now becoming just as important to national competitiveness as roads, ports, and power plants.

The benefits of this digital growth go beyond the IT industry itself. Technology improves efficiency in agriculture, manufacturing, logistics, healthcare, education, finance, and government. Digital payments lower transaction costs and improve financial inclusion, while artificial intelligence, cloud computing, and data analytics help businesses make better decisions. Smart manufacturing boosts industrial output, and digital supply chains make exports more competitive. Investment in digital infrastructure therefore creates ripple-effects across the whole economy, improving how resources are used and encouraging innovation.

These trends align well with the direction of CPEC 2.0. Unlike the first phase, which focused mainly on transport and energy infrastructure, CPEC 2.0 places more emphasis on industrial cooperation, technological innovation, digital connectivity, green development, and deeper economic integration. China’s success in becoming a global technology leader gives Pakistan a valuable chance to speed up its own digital progress through closer cooperation.

Technology cooperation under CPEC 2.0 could boost Pakistan’s productivity across several sectors. In manufacturing, Chinese expertise in automation, robotics, smart factories, and digital quality control could help modernize Special Economic Zones and improve industrial competitiveness. In agriculture, satellite technology, precision farming, drone monitoring, smart irrigation, and AI-based crop management could raise productivity, use resources more efficiently, and strengthen food security. In logistics, smart transport systems, digital customs platforms, block chain-based trade tools, and smart ports could lower trade costs and improve regional connectivity. The energy sector also offers strong potential, as China’s experience with smart grids, renewable energy management, battery storage, and digital energy monitoring could help Pakistan use energy more efficiently and move toward sustainable development. Similarly, cooperation in healthcare through telemedicine, AI-assisted diagnosis, digital health records, and biotech research could make healthcare more accessible, especially in underserved areas.

Pakistan’s growing number of software engineers, tech entrepreneurs, and freelancers provides a strong base for deeper cooperation. Chinese investment in research centers, technology parks, semiconductor design, AI labs, cloud facilities, and university partnerships could help Pakistan build its own technological capabilities while creating high-value jobs. Such partnerships would support technology transfer and gradually connect Pakistan to global innovation networks.

Even so, making the most of these opportunities means addressing some key challenges: uneven digital infrastructure across regions, the need for continuous skills upgrading, weak cybersecurity frameworks, and limited investment in research and development. Closing these gaps is essential if Pakistan wants to shift from simply using technology to actually creating innovative digital solutions.

To get the most out of CPEC 2.0, Pakistan should adopt a coordinated policy approach that focuses on expanding digital infrastructure, strengthening STEM education, investing in AI and semiconductor research, improving cybersecurity, and encouraging collaboration between industry and academia. Setting up joint Pakistan-China innovation centers, research programmes, technology incubators, and incentives for high-tech investment would help speed up technology transfer and turn ideas into real products. These steps would allow Pakistan to benefit from China’s technological progress while building its own long-term innovation capacity.

The strong performance of Pakistan’s ICT sector shows that technology is no longer a minor part of the economy — it is now a strategic asset that drives exports, productivity, and economic resilience. If properly integrated into CPEC 2.0, technology cooperation with China could reshape Pakistan’s economic future, helping it move from an infrastructure-driven economy to an innovation-driven digital economy that can compete in today’s knowledge-based global market.

Copyright Business Recorder, 2026