Pakistan unveils ambitious plan to become a tech powerhouse

Islamabad: Pakistan has unveiled the blueprint to build a knowledge-driven tech economy by investing in and empowering the youth of the country.

The world’s 5th largest country of 233-million people with more than 50 per cent Gen-Z population, traditionally known for its agrarian economy, recently passed milestone legislation that aims to create jobs in the tech sector, capitalise on youth dividends and enable technology-driven economic growth.

Gulf News exclusively spoke to Amer Ahmed Hashmi, the Chairman of Special Technology Zones Authority (STZA), Pakistan’s top organisation established in 2021 to oversee the country’s ambitious plans to develop a high-tech economy for rapid eco-nomic growth.

“STZA offers the institutional and legislative support to Pakistan’s technology sector that the industry was lacking to unlock its full potential. This is the first time we have a government institution within the Prime Minister’s office with one mission: To transform Pakistan into a tech-driven entrepreneurial nation spearheading the economic growth” says Hashmi. Prime Minister Imran Khan understood the urgent need for a tech-based knowledge economy and took full ownership and has championed the strategic initiative – STZA.

For the last 40 years, the country’s export economy has remained limited to specific in-dustries that have struggled to grow Pakistan’s exports significantly, requiring a new economic mix for GDP growth.

Tech has been the key missing piece of the export puz-zle that STZA is bringing to the system, points out Hashmi. Pakistan made significant progress in the digital space as information technology (IT) exports crossed the $2 billion mark for the first time this year.

Though encouraging, the numbers are significantly lower than Pakistan’s immediate neighbour India which boasts a $190 billion IT industry (exports and domestic).

Amer Hashmi joined STZA in February 2021 bringing over 25 years of global experience in business, technology, and academia in Pakistan, and other countries such as the US, UK, Russia, China, Vietnam, Malaysia, and Canada. Most importantly, he brings passion, positivity, and a go-getter attitude to the organisation that has many young men and women in leadership positions.

Hashmi strongly believes that young people are the “most valuable asset of Pakistan” and hence it is essential to invest in human capital.

Pakistan’s tech authority chairman who witnessed the tech boom working in the heart of Silicon Valley in the mid-1990s said that the organisation was structured based on best practices after studying the tech zone models in 55 countries in Europe, the US, and Asia.

Outlining the strategy to make Pakistan a technology powerhouse, Hashmi shared with Gulf News that the organization will set up 14 world-class tech zones across the country by June 2022.

“These zones will create thousands of jobs for youth, attract foreign investors and global companies, boost tech and IT exports, generate high-skilled work-force, and develop Pakistan’s IT industry and entrepreneurship ecosystem.” Job creation, human capital development, technology transfer, increasing IT exports, and in-centivize import substitution, foreign direct investment is some of the broad-based goals of STZA.

Core elements of Tech Zones

The core elements of the zones centred on the startups are Venture Capital (VC) firms, top global tech companies, Pakistani firms, Universities and research and development (R&D) teams, small and medium enterprises (SMEs). The focus of the tech zone focus would be based on the specialities of the region.

For instance, a tech zone in Faisala-bad might focus on agricultural technologies that can boost farming productivity, build indigenous tech-driven solutions to achieve self-reliance. The tech zones will be built on government land near universities and business hubs to create knowledge clusters. The authority will incorporate the “triple helix innovation model” integrating industry, government, and academia. The zones will offer office space, electrical power, Internet, and other facilities to startups and zone enterprises, at subsidized prices.

Incentives and 10-year tax exemptions

But why would foreign investors come to Pakistan? Hashmi looked rather delighted when asked this question. “The investors are usually repelled by the cost and complex-ity of the system. So, we are cutting red tape, simplifying procedures, offering one-window facilitation to make it easier and friendlier for foreign investors to enter Pakistan” — a young country with tech-savvy population and one of Asia’s fastest-growing economies.

STZA is offering several tax concessions and incentives for local and foreign firms under zone enterprise and developer categories specifically 10-year tax and customs duty exemptions. “The response from foreign companies has been over-whelming so far,” he said without sharing details of investors coming to Pakistan.

STZA at Dubai Expo 2020

Hashmi and his team are visiting the Dubai Expo 2020 this weekend to meet top global tech investors. Sharing some glimpses from the tour, Hashmi said: “The vibrant Pakistan pavilion demonstrates the new drive from the government to invite global businesses, investors, tech startups, universities, young students, to come to Pakistan.” Pakistan’s tech authority chairman says the Expo 2020 is a fantastic opportunity for Pakistan and the Gulf companies to exchange ideas and seize new opportunities. The visit is aimed at strengthening Pakistan’s technological collaboration with the MENA region.

Focus on high-skilled workforce

Pakistan now has the world’s third-largest number of freelancers in IT and IT-enabled services and 42 per cent of them are software developers. Hashmi says that country must “move beyond low-hanging fruits of only billing labour hours.

Pakistan must create new high-tech industries such as cyber security solutions, systems integration, da-ta centre, strategic IT outsourcing, and cloud services. The idea behind STZA is to cre-ate diversified zones with some focusing on high-end technology such as machine learning, blockchain, and artificial intelligence.”

Talking about some of the difficulties, Hashmi says the biggest challenge has been to overcome the mindset barriers that limit the potential of people. Another critical ques-tion is: Can Pakistan build a high-quality tech workforce at a globally competitive price?

“The global job market is changing and Pakistan needs to make an agile workforce in technology to move with the global demand and requirement of local industry,” says Hashmi. Pakistan’s government is making all efforts to level up the skill set with high-powered training courses for young professionals. “The government support and re-forms will allow companies to seize the global digital economy opportunities and trans-form country’s IT sector.”

2021 has been a phenomenal year for Pakistani startups that raised $278 million this year, about four times more than they did last year, according to Invest2Innovate (i2i) data. E-commerce and fintech were among the most well-funded sectors.