Emerging global player in Information Technology
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Sartaj Aziz
The IT revolution in Pakistan started in 1995 and was in full gear by the end of 1997. The pace of change has further accelerated in the past one year. Some of the supporting factors were: the PC boom, because of availability and sharply falling prices, the internet, Government's strong support to escalate Pakistan's entry into the IT revolution by digitalisation and upgrading of telephone networks and infrastructure, setting up of a software export board, allocating and starting a Software Technology Park in Islamabad, increased efforts by the IT universities to enhance the computer sciences programmes and a strong global trend towards outsourcing from western countries to cheaper sources in the developing countries.
Perhaps the most significant factor of all was the recognition by the private sector IT entrepreneurs in Pakistan and Pakistani expatriates living abroad that "IT human resources" were dwindling in the developed nations like the US and that future demand would become explosive. In 1997, the US was a million IT specialists short and Europe and Japan also required a million plus IT specialists. Everyone was rushing to Bangalore to get help--the IT boom in South Asia had commenced.
Pakistan shares the same "genetic code" as the Indians and both countries have highly talented and hard working people. It is a pity that Pakistan's efforts to train IT professionals started at least 10 years too late, but now it is getting into full swing. Pakistan, responding to global imperatives, has adopted a comprehensive IT policy based on three main pillars: Knowledge-based economy, IT-based means of production and IT modes of trade. These in turn require universal communications, universal access to knowledge and transparent governance.
Pakistan has approximately 75,000 active IT information workers--systems analysts, programmes, managers, data transcripting and entry personnel. Potentially, the output of these 75,000 workers at the rate of US$20,000 annually per worker would translate into one and a half billion dollar a year "output workforce" in the Pakistan economy. Pakistan has a potential workforce of 5 million educated workers and this would translate into a 100 billion dollar potential market, according to a model constructed by Michael Dertouzos of MIT.
IT exports of approximately 50 million dollars in the year 2000 are targeted to grow 8-fold, to $400 million within 3 years, by 2003. This would include $150 million in medium tech exports (at an average billing rate of $20 an hour) and $250 million in the low tech category, assuming an average billion rate of $10 an hour.
The proportion of medium tech exports will grow in future. There are 500 registered software companies developing IT products and services for the domestic and export market. To facilitate software exports, State Bank of Pakistan has instructed banks to accept the contracts as collateral from software exporters to qualify them for the Export Refinance Scheme. Many international venture capital companies have already started their operations in Pakistan in cooperation with Pakistani banks and funding companies.
Legislation to provide protection and enhance confidence of users, providers and electronic traders is being developed and should be in force before the end of the year 2000. It will include the Digital Signatures Act, Intellectual Property and Copyright Act and the Consumer Protection Act. Pakistan has about a million PC users and the number is growing by at least 30% a year. There are about 150,000 Internet users. Internet services are available in all major cities and the government is rapidly increasing the number of cities and towns with access to the net.
In 1999, a total of 27,000 IT professionals were added to the pool of professional manpower in Pakistan. This included 6,000 graduates in computer sciences, 3,500 Masters in Computer Sciences, 2,500 Masters in Business Administration and 15,000 other short term trainees with diplomas or certificates. This supply is growing rapidly each year. Sixteen universities offer high standard Computer Science and IT related programmes. Some of the IT universities like GIK, LUMMS and FAST are rated in the top 50 IT universities in Asia.
Under the National IT Policy and Action plan, the government is setting up four new IT "specific" universities. Output of graduates from the existing universities will almost double by 2003. Numerous joint ventures with foreign universities and votech institutes have set up sister organisations to train students in Pakistan. Companies like Microsoft and Oracle have established training centres and certification programmes in major cities like Lahore, Karachi and Islamabad.
The government has recently announced some very attractive incentives in their IT policy. Foreign companies can set up shops in Pakistan very easily and software exports are tax exempt, internet access is expanding and ISPs are being supported with wide bandwidth, high speed TI digital lines are functioning, fiber optic links to all parts of the world, broad band is in the offing by the end of 2000 and satellite link prices are being brought down rapidly.
Another major contributor to the IT revolution are the Pakistanis working and living abroad in the US and Europe. Like the Indians, there are significant Pakistani players and companies in the IT field in the US. It is estimated that about half a million Pakistani Information workers are in the US alone. Most of them have chosen the Silicon Valley (California) and the Silicon Alley (New York) as their base.
Two such Pakistanis, an ex-Chairman and co-founder of AST computers, and an ex-ECO of AMD, have set up venture capital companies in the US to assist in the development of the IT industry in Pakistan. They are also involved in high tech joint venture with Pakistan IT companies that are producing cutting edge products for the Internet market. Elixir Technologies, a California-based IT company, for example has pioneered high speed electronic publishing software cooperation with Xerox and IBM.
The average salary of an IT specialist in Pakistan is about $1,500 per month which is about half the average Indian salaries and one fourth of US costs. Extremely hard working and bright IT workers are available in increasing numbers. Telephone rates and cost of high-speed links is comparable to that of other Asian countries and lower than in India. These are coming down rapidly.
Company setup costs--employee benefits and insurance--is far cheaper than any developed country. Office space costs less than 25% of the US prices. Air links and land links from major Pakistani cities are fast and convenient to all the continents. Courier services like DHL and Fed Express, have been operating successfully for years. Internet, phone and fax services are now available in all major cities.
All major IT players like Microsoft and IMM have offices in Pakistan. Software houses installing world-renowned methodologies like CMM (developed at the Camegie Mellon University and used in the NASA space shuttle programme) and process controls to assure world class quality software and IT products.
Strong government support is available and incubation programmes are expanding in Pakistan and abroad.
Why should foreign companies out source IT services to Pakistan?
• Human resources: The single biggest factor in this explosive global growth economy is the "human resources" not the dot comms as Michael Dertouzes has emphasised. As the demand rises, the supply is shrinking in the developed nations. Pakistan has a growing pool of highly skilled labour available.
• Economy: In developed countries, the cost of IT professionals and services is rising astronomically and will not be coming down--out sourcing is an alternative with the least "transaction cost". For the next five years Pakistan IT salaries will not become as high as in India because we have started late and Pakistan has a national goal of "we will compete with the best for less" in this fiercely competitive global market.
• Product Development: As the Internet applications and the globalisation of business escalate, companies have to bring to their customers (b2c) and to their business partners (b2b) new products and services at the "speed of light" (coined by Andrew Groves, ex-CEO of intel and Bill Gates). The whole business is in jeopardy if companies do not follow this trend. Out sourcing becomes the "first" option, not another.
• Quality: Companies need new products and services for their business not only rapidly but functioning and wanting the highest quality. Pakistani software houses, mostly backed up by their parent US and European companies, are installing process management methodologies like CMM to adhere to strict world standards. Most of the companies use products like Lotus Notes for "group-work", tracking and servicing their customers worldwide.
Companies like Xerox and IBM who demand great quality products and services are being helped by Pakistani software houses to develop and install their products in major customer sites like the Australian Tax Department, AT&T and other 500 customers worldwide.
Pakistani companies also help major customers re-engineer their "legacy" applications to new environments. One such example is the recent landmark project for the Singapore Internal Revenue Administration (IRAS) accomplished by Elixir Technologies and Fuji Xerox Singapore in a strong collaborative effort. 250 "mission critical" applications were converted from a mainframe to a Windows NT platform in a record nine months.
• Infrastructure: Pakistan has all major cities on a digital telecommunication network high-speed TI lines, satellite links are available at affordable prices. Office space is abundant with full services.
• Friendly environment: Pakistan is a friendly, hospitable and hard working
nation. It is easy to find talented people and mould them to the modern day working environment and they respond graciously to quality "human engineering". Pakistan is
also a beautiful country with some of the highest mountains and exotic valleys in the world.
In conclusion, it is important to emphasise that in Pakistan, the government is acting as the facilitator and enabler to encourage the private sector to spearhead and sustain the IT revolution in Pakistan.
The writer is former Finance and Foreign Minister of Pakistan
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Allah knows best...
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Sartaj Aziz
The IT revolution in Pakistan started in 1995 and was in full gear by the end of 1997. The pace of change has further accelerated in the past one year. Some of the supporting factors were: the PC boom, because of availability and sharply falling prices, the internet, Government's strong support to escalate Pakistan's entry into the IT revolution by digitalisation and upgrading of telephone networks and infrastructure, setting up of a software export board, allocating and starting a Software Technology Park in Islamabad, increased efforts by the IT universities to enhance the computer sciences programmes and a strong global trend towards outsourcing from western countries to cheaper sources in the developing countries.
Perhaps the most significant factor of all was the recognition by the private sector IT entrepreneurs in Pakistan and Pakistani expatriates living abroad that "IT human resources" were dwindling in the developed nations like the US and that future demand would become explosive. In 1997, the US was a million IT specialists short and Europe and Japan also required a million plus IT specialists. Everyone was rushing to Bangalore to get help--the IT boom in South Asia had commenced.
Pakistan shares the same "genetic code" as the Indians and both countries have highly talented and hard working people. It is a pity that Pakistan's efforts to train IT professionals started at least 10 years too late, but now it is getting into full swing. Pakistan, responding to global imperatives, has adopted a comprehensive IT policy based on three main pillars: Knowledge-based economy, IT-based means of production and IT modes of trade. These in turn require universal communications, universal access to knowledge and transparent governance.
Pakistan has approximately 75,000 active IT information workers--systems analysts, programmes, managers, data transcripting and entry personnel. Potentially, the output of these 75,000 workers at the rate of US$20,000 annually per worker would translate into one and a half billion dollar a year "output workforce" in the Pakistan economy. Pakistan has a potential workforce of 5 million educated workers and this would translate into a 100 billion dollar potential market, according to a model constructed by Michael Dertouzos of MIT.
IT exports of approximately 50 million dollars in the year 2000 are targeted to grow 8-fold, to $400 million within 3 years, by 2003. This would include $150 million in medium tech exports (at an average billing rate of $20 an hour) and $250 million in the low tech category, assuming an average billion rate of $10 an hour.
The proportion of medium tech exports will grow in future. There are 500 registered software companies developing IT products and services for the domestic and export market. To facilitate software exports, State Bank of Pakistan has instructed banks to accept the contracts as collateral from software exporters to qualify them for the Export Refinance Scheme. Many international venture capital companies have already started their operations in Pakistan in cooperation with Pakistani banks and funding companies.
Legislation to provide protection and enhance confidence of users, providers and electronic traders is being developed and should be in force before the end of the year 2000. It will include the Digital Signatures Act, Intellectual Property and Copyright Act and the Consumer Protection Act. Pakistan has about a million PC users and the number is growing by at least 30% a year. There are about 150,000 Internet users. Internet services are available in all major cities and the government is rapidly increasing the number of cities and towns with access to the net.
In 1999, a total of 27,000 IT professionals were added to the pool of professional manpower in Pakistan. This included 6,000 graduates in computer sciences, 3,500 Masters in Computer Sciences, 2,500 Masters in Business Administration and 15,000 other short term trainees with diplomas or certificates. This supply is growing rapidly each year. Sixteen universities offer high standard Computer Science and IT related programmes. Some of the IT universities like GIK, LUMMS and FAST are rated in the top 50 IT universities in Asia.
Under the National IT Policy and Action plan, the government is setting up four new IT "specific" universities. Output of graduates from the existing universities will almost double by 2003. Numerous joint ventures with foreign universities and votech institutes have set up sister organisations to train students in Pakistan. Companies like Microsoft and Oracle have established training centres and certification programmes in major cities like Lahore, Karachi and Islamabad.
The government has recently announced some very attractive incentives in their IT policy. Foreign companies can set up shops in Pakistan very easily and software exports are tax exempt, internet access is expanding and ISPs are being supported with wide bandwidth, high speed TI digital lines are functioning, fiber optic links to all parts of the world, broad band is in the offing by the end of 2000 and satellite link prices are being brought down rapidly.
Another major contributor to the IT revolution are the Pakistanis working and living abroad in the US and Europe. Like the Indians, there are significant Pakistani players and companies in the IT field in the US. It is estimated that about half a million Pakistani Information workers are in the US alone. Most of them have chosen the Silicon Valley (California) and the Silicon Alley (New York) as their base.
Two such Pakistanis, an ex-Chairman and co-founder of AST computers, and an ex-ECO of AMD, have set up venture capital companies in the US to assist in the development of the IT industry in Pakistan. They are also involved in high tech joint venture with Pakistan IT companies that are producing cutting edge products for the Internet market. Elixir Technologies, a California-based IT company, for example has pioneered high speed electronic publishing software cooperation with Xerox and IBM.
The average salary of an IT specialist in Pakistan is about $1,500 per month which is about half the average Indian salaries and one fourth of US costs. Extremely hard working and bright IT workers are available in increasing numbers. Telephone rates and cost of high-speed links is comparable to that of other Asian countries and lower than in India. These are coming down rapidly.
Company setup costs--employee benefits and insurance--is far cheaper than any developed country. Office space costs less than 25% of the US prices. Air links and land links from major Pakistani cities are fast and convenient to all the continents. Courier services like DHL and Fed Express, have been operating successfully for years. Internet, phone and fax services are now available in all major cities.
All major IT players like Microsoft and IMM have offices in Pakistan. Software houses installing world-renowned methodologies like CMM (developed at the Camegie Mellon University and used in the NASA space shuttle programme) and process controls to assure world class quality software and IT products.
Strong government support is available and incubation programmes are expanding in Pakistan and abroad.
Why should foreign companies out source IT services to Pakistan?
• Human resources: The single biggest factor in this explosive global growth economy is the "human resources" not the dot comms as Michael Dertouzes has emphasised. As the demand rises, the supply is shrinking in the developed nations. Pakistan has a growing pool of highly skilled labour available.
• Economy: In developed countries, the cost of IT professionals and services is rising astronomically and will not be coming down--out sourcing is an alternative with the least "transaction cost". For the next five years Pakistan IT salaries will not become as high as in India because we have started late and Pakistan has a national goal of "we will compete with the best for less" in this fiercely competitive global market.
• Product Development: As the Internet applications and the globalisation of business escalate, companies have to bring to their customers (b2c) and to their business partners (b2b) new products and services at the "speed of light" (coined by Andrew Groves, ex-CEO of intel and Bill Gates). The whole business is in jeopardy if companies do not follow this trend. Out sourcing becomes the "first" option, not another.
• Quality: Companies need new products and services for their business not only rapidly but functioning and wanting the highest quality. Pakistani software houses, mostly backed up by their parent US and European companies, are installing process management methodologies like CMM to adhere to strict world standards. Most of the companies use products like Lotus Notes for "group-work", tracking and servicing their customers worldwide.
Companies like Xerox and IBM who demand great quality products and services are being helped by Pakistani software houses to develop and install their products in major customer sites like the Australian Tax Department, AT&T and other 500 customers worldwide.
Pakistani companies also help major customers re-engineer their "legacy" applications to new environments. One such example is the recent landmark project for the Singapore Internal Revenue Administration (IRAS) accomplished by Elixir Technologies and Fuji Xerox Singapore in a strong collaborative effort. 250 "mission critical" applications were converted from a mainframe to a Windows NT platform in a record nine months.
• Infrastructure: Pakistan has all major cities on a digital telecommunication network high-speed TI lines, satellite links are available at affordable prices. Office space is abundant with full services.
• Friendly environment: Pakistan is a friendly, hospitable and hard working
nation. It is easy to find talented people and mould them to the modern day working environment and they respond graciously to quality "human engineering". Pakistan is
also a beautiful country with some of the highest mountains and exotic valleys in the world.
In conclusion, it is important to emphasise that in Pakistan, the government is acting as the facilitator and enabler to encourage the private sector to spearhead and sustain the IT revolution in Pakistan.
The writer is former Finance and Foreign Minister of Pakistan
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Allah knows best...
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