The report forecast “ample room” in the exports sector
In a report, the World Bank has said that about 42.4% of freelancers in Pakistan are associated with software development — higher than Bangladesh, Nepal, and Sri Lanka.
Pakistan has a total of 4,641 IT firms and 4,066 call centers, the report stated.
With more than 300,000 professionals, the industry is spread across three cities: Karachi, Lahore and Islamabad.
The study, which covered 300 IT firms, by the National Information and Communication Technologies R&D Fund under the Ministry of Information Technology and Telecommunication, showed 14% of the firms had 50 or more employees, 17% had 25–50 employees, and the rest had fewer than 25 employees.
This sector focuses on domestically-owned firms with limited foreign operations. Moreover, 13% of the firms surveyed were of foreign origin, while there was only one such firm among top 10 exporters.
Pakistan’s ICT services exports have grown by a compound average growth rate of 10.8% per year, increasing from $433 million in the fiscal year 2009-10 to more than $1 billion in 2018-19 — when more than half (52%) of Pakistan’s telecommunications, computer, and information services exports went to the United States, followed by 8.8% to the United Arab Emirates and 7% to the United Kingdom, the report said.
The share of computer-related services within these ICT services exports surged from 44% to 73% between 2009-10 and 2018-19, with an average annual growth of 17.3%.
The study further stated that within computer-related services, exports were concentrated in low to medium value-added software services, including enterprise planning, application development and integration. There was limited activity in product development.
Further, low value-added services such as call centers led the BPO segment, accounting for 90% 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.
The report forecast “growth” in this sub-sector of the country’s exports.
Experts believe that nearly $1.5 billion worth of exports were not reported — $1 billion by small- and medium-scale enterprises (SMEs) and $500 million 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. The report also noted that about 42.4% of freelancers in Pakistan are associated with software development, making up about 10.5% of global freelancers — much higher than in Bangladesh, Nepal, and Sri Lanka but lower than those in India.