Prime Minister Shehbaz Sharif recently set a target of achieving $25 billion in IT exports over the next five years, an ambitious goal aimed at positioning Pakistan’s IT (Information Technology) and Artificial Intelligence (AI) sector as global competitors. While Pakistan’s IT sector has shown notable growth in recent years, realising such a high target, if at all achievable, will require overcoming significant challenges in infrastructure, workforce development, policy stability, and strategic planning.
Prime Minister Shehbaz Sharif recently set a target of achieving $25 billion in IT exports over the next five years, an ambitious goal aimed at positioning Pakistan’s IT (Information Technology) and Artificial Intelligence (AI) sector as global competitors. While Pakistan’s IT sector has shown notable growth in recent years, realising such a high target, if at all achievable, will require overcoming significant challenges in infrastructure, workforce development, policy stability, and strategic planning.
Over the past decade, Pakistan’s IT sector has steadily expanded, fueled by a combination of local talent, cost competitiveness, and a burgeoning freelance industry. In 2024, the sector’s IT exports reached $3.2 billion compared to $2.6 billion in 2023, indicating an encouraging trend of growth and international demand. IT exports recorded an impressive $310 million in April 2024 alone. Pakistan’s IT industry spans various segments, including software development, IT-enabled Services (ITeS), and Business Process Outsourcing (BPO), which collectively contribute to job creation and foreign exchange. Today, Pakistan’s IT workforce consists of over 300,000 professionals, and the country ranks among the top four global freelance markets, underscoring the skill and competitiveness of its tech professionals.
Several Pakistani companies have made significant strides on the international stage. NetSol Technologies, NCR Pakistan, and Systems (Pvt) Ltd, for example, have won contracts with multinational clients, enhancing the reputation of Pakistan’s IT services. The country’s software houses have excelled in areas like mobile application development, Enterprise Resource Planning (ERP) systems, and e-commerce solutions, delivering quality services at competitive rates. These companies have also achieved global certifications, such as CMMI (Capability Maturity Model Integration), which enhances credibility and fosters trust among international clients.
In recent years, the government has introduced several initiatives aimed at boosting the IT sector, including tax incentives, IT export packages, and the establishment of Special Technology Zones (STZs) across the country. These zones are intended to provide high-tech infrastructure, ease of business, and tax incentives to local and foreign investors. However, despite these initiatives, the IT industry’s growth potential is still hindered by significant infrastructure challenges. Internet connectivity, particularly in rural areas, remains inadequate. According to the Pakistan Telecommunication Authority (PTA), broadband penetration stands at about 46 per cent, limiting outreach and scalability for tech firms. Additionally, electricity shortages and high internet costs create operational challenges for businesses.
Building a competitive IT sector requires reliable and affordable high-speed internet, data centres, and uninterrupted power. With the rapid growth of digital work, especially during the Covid-19 pandemic, the need for resilient internet infrastructure has become more apparent. Investment in fiber-optic networks and expanded 4G and 5G coverage is essential for supporting large-scale IT operations and attracting foreign direct investment (FDI) in the tech sector.
Artificial intelligence (AI) is reshaping industries globally, and Pakistan is slowly positioning itself to tap into this trend. AI has wide applications across sectors like finance, healthcare, agriculture, and logistics, which makes it a promising area for IT export growth. The National Center of Artificial Intelligence (NCAI), established in 2018, works with the universities and private organizations to support AI research and development (R&D). Similarly, the Ministry of Information Technology and Telecommunications has been proactive in incorporating AI into national digital strategies, which include developing AI-based health and education platforms and promoting digital transformation within government services.
AI and other advanced technologies such as Blockchain, Big Data analytics, and Machine Learning represent high-value exports that can drive revenue growth. However, developing these areas will require greater investment in education and workforce training. Pakistan’s current tech education system, although improving, lacks sufficient focus on emerging technologies. Many tech graduates are not equipped with practical skills in AI, Cloud Computing, or Blockchain, which limits the sector’s ability to offer high-value services. Updating curricula, establishing AI and data science programs, and creating internship opportunities are vital steps to bridge this skill gap and build a workforce ready for the global AI market.
Pakistan’s freelance sector has been a backbone of IT exports, particularly in the global freelancing market. In 2019, Pakistan ranked fourth worldwide for freelance earnings, contributing significantly to the on-demand economy with platforms like Upwork, the online job platform, and Fiverr, leading marketplace for digital services, connecting Pakistani freelancers to clients the world over. This sector has provided flexible and lucrative opportunities for many young Pakistanis, allowing them to contribute to the economy without relocating. Freelancers in Pakistan primarily offer services in web development, content creation, graphic design, and digital marketing, generating substantial revenue and promoting the country’s image as a source of affordable and high-quality digital services.
While Pakistan has made notable progress in IT and digital exports, several structural issues hamper faster growth. Infrastructure remains a core challenge, with unreliable electricity and limited internet connectivity affecting productivity. Moreover, many tech startups and companies face obstacles due to cumbersome regulatory frameworks. Though the government has introduced tax incentives and Special Technology Zones (STZs), inconsistent policies and a lack of a dedicated regulatory framework for IT exports continue to deter foreign investors. Establishing a separate Ministry of IT and AI could centralise policy support, streamline processes, and enable targeted measures to accelerate sectoral growth.
A further impediment is the lack of stringent data privacy laws aligned with international standards like GDPR (General Data Protection Regulation). As data privacy becomes increasingly important in sectors handling sensitive information, such as finance and healthcare, aligning with global standards is essential to foster trust among international clients. This regulatory alignment would also help attract foreign clients who are wary of data security and privacy issues.
The recent wave of brain drain poses a serious threat to Pakistan’s IT sector. Many skilled professionals, particularly in IT, are leaving Pakistan for countries offering better career growth, stable economies, and competitive salaries. The UAE, Canada, and several European countries have become attractive destinations for Pakistani IT experts, providing favorable work environments, advanced technological ecosystems, and significant financial incentives. This exodus of talent, driven by limited opportunities for growth, economic instability, deteriorating law and order, and concerns over job security, could weaken Pakistan’s IT sector’s ability to meet global demand.
To achieve the ambitious IT export target, the government must take measures to retain skilled talent. This involves creating more local opportunities, providing competitive salaries, and offering career advancement paths in emerging tech fields. Developing an ecosystem that fosters innovation and supports tech startups can also create incentives for professionals to stay and contribute to the domestic IT industry. The caretaker government had established in January 2024 a Pakistan Startup Fund aiming at access to financial support for startups, but without achieving the desired results due to the current government not owning the fund and making its due publicity.
The $25 billion target, though encouraging, appears ambitious given Pakistan’s current export figures and structural limitations. Achieving this manifold increase requires more than incremental growth -- it calls for exponential advancements across several areas, including digital infrastructure, education, regulatory reform, and FDI attraction. Countries with high IT exports have invested extensively in tech education, established strong legal frameworks, and fostered public-private partnerships, areas where Pakistan needs to make substantial progress. Ironically the government has not yet approved the draft of the National Freelancing Facilitation Policy for implementation; the draft was prepared in May 2021, and preparation of a National Artificial Intelligence Policy has remained on the cards since then.
Increasing exports to $25 billion will require Pakistan to transition from low-cost freelance services to high-value IT exports, such as AI, complex software solutions, and Big Data analytics. Developing these specialised services will need time, capital, and substantial investment in skill development, which are currently limited. The government’s ambitious target, if accompanied by strong policy measures, could inspire growth, but without addressing the core structural weaknesses, achieving such a high export level within three years remains challenging.
While Pakistan’s IT sector is positioned for growth, the government must address infrastructure challenges, build a capable workforce, and establish a stable regulatory framework on priority to support long-term growth for which political will is absent at present. With effective measures to counter brain drain and attract foreign investments, Pakistan can unlock the full potential of its IT industry and move closer to its export goals. However, achieving the target will demand an unprecedented level of commitment, planning, and resources across public and private sectors.
Building a competitive IT sector requires reliable and affordable high-speed internet, data centres, and uninterrupted power. With the rapid growth of digital work, especially during the Covid-19 pandemic, the need for resilient internet infrastructure has become more apparent
The writer is a retired chairman of the State Engineering Corporation and former member (PT) of the Pakistan Nuclear Regulatory Authority.
