Pakistan needs to invest heavily in education, reinforced with research and development, to meet the demand of the IT sector for skilled employable IT graduates and thus give a boost to the exports of information technology enabled services (ITES) and IT related products. At present, around 20,000 IT graduates and engineers are passing out from the Pakistani IT educational institutions annually, but only 20 percent of these are employable in this sector; this is a major hurdle in the way of the government's goal of enhancing annual IT related exports to $5-6 billion in the next few years.
"If roughly calculated, for every $1 billion IT related exports, we need 50,000 new inductions in the IT companies, but our educational institutions do not have the capacity to produce such number of skillful manpower; in fact we are producing the same number for the last 20-25 years," said Naseer A Akhtar, Founder President and CEO InfoTech and former President of Pakistan Software Houses Association (PASHA), while talking to Business Recorder here on Wednesday.
"In order to impart quality education to the IT students, we need to polish our own abilities, especially when the world is a lead in new technologies: artificial intelligence, robotics and machine learning. "In addition to sufficient supply of professionals, we need quality professionals. There is no doubt that our institutions are focusing on innovation and entrepreneurship, which is the need of the hour, but they should also focus on infusing quality knowledge in these graduates so they can make meaningful contribution to the existing industry and also perform well while coming up as startups," he said.
To overcome the limitations exists in the IT sector Naseer stressed the need for developing a culture of research in the Pakistani universities. He urged the IT faculty heads to engage IT students in research orientated studies; however, with regret he pointed out that these universities lack funds for research projects. "Our whole education budget is equal to the budget of one German university," he added. The Infotech head disclosed that to overcome the human resource handicap, through in-house training, the IT industry is developing skilled manpower to their needs and standard. "They pick the best out of the available workforce pool and train them. However, the government seriously needs to review the situation and come up with a programme, based on both higher education and short vocational course, to meet the IT sector's workforce demand," he added.
He also termed the high taxation regime on IT industry as another obstacle in its development, which in his opinion needs to be reviewed. To a question, he said Pakistani IT companies can penetrate the markets in Middle East and Far East countries. He pointed out that the government needs to patronize the Pakistani companies to get work from the international market on the pattern of India. "The Indian government urges foreign companies to interact with their Indian counterparts," he added.
He considered the domestic public sector as a propelling factor that could give a big boost to the IT sector in Pakistan. "In any country, domestic public sector is considered the biggest buyer of IT related services and products, and hence the government should pay attention towards it," he added. Responding to a question, Naseer A Akhtar said the government should announce a cash reward of 7 percent for IT companies on export. "Only companies registered with P@sha (Pakistan Software Houses Association for It and ITES) and the State Bank of Pakistan should be entertained under this scheme. This will ensure that the IT companies report their businesses to the government and also these companies will have extra cash to be used for R&D, training and participation in international conferences," he added.
Supporting his demand, he said that other export sectors, including textile, gloves, leather garments, footwear and surgical, are offered 4-7 percent cash incentive and a similar incentive should given to this sector. He made a number of suggestions that he believed could put the IT sector on the growth path. The government should reinforce industry status to IT/ITES sector and there should be zero rating GST. Moreover, imports (related to the IT industry) should be exempted from minimum tax, GST and custom duty.
Moreover, the government should revisit a draft prepared for setting up Tech Special Economic Zone (SEZ) and change the minimum requirement of possessing 50 acres of land to 5 acres by a company. The government should exempt IT/ITES companies from Withholding Tax on local purchases and the Tech SEZ companies should be given Zero Rating GST on local purchases, including electricity, water and equipment.
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