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Sartaj Aziz: Emerging as a Global Player in IT

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    Sartaj Aziz: Emerging as a Global Player in IT

    Emerging global player in Information Technology
    -------------------------------------
    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...

    #2
    A bit long, but a nice article, nevertheless. Although it glosses over some other points, the author, probably wanted to deliver just the goody goody a.k.a enablers, and stayed away from the disablers.

    No doubt the IT is on the upswing in Pakistan and years to come will probably see a rapid growth in this sector, we are several years behind India in this field. In proportion to our respective populations, Indians have a greater base of educated folks who turn to IT.

    I will now take some comments from Mr Sartaj Aziz and offer my comments:

    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.
    No doubt, these universities are good, but here is the catch. Not many ppl know that GIK is having a really hard time retaining a decent faculty bcz of its location. Some critical faculty as well as administration of FAST have left, but it is still a flag-bearer. LUMS is probably the best. Another aspect to keep in mind, is the mushroom growth of IT institutes in every nook and cranny, who, sometimes, don't impart quality education. As their fee is high so it is also creating another divide in our middle class youngsters.


    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.
    Insha Allah. But as of now, it seems very very optimistic.

    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.
    I don't know where is Mr Aziz getting his figures from. As we all know, right now Lahore is the hub of software exports, with the largest software houses (geared towards exports) are based on Lahore. I was discussing this with a CEO of a major IT house, only recently, and he told me that including his company, there are only 5 software houses who have crossed $3m per year revenue target. CresSoft is the biggest as well as NetSOL. I wouldn't imagine the exports at this time to be greater than $20m.

    Companies like Microsoft and Oracle have established training centres and certification programmes in major cities like Lahore, Karachi and Islamabad.
    Don't forget that a major stumbling block is the copyright issue. All the foreign companies insist that govt should adopt more strict copyright laws. Presently 100s of latest software is available in a single CD costing Rs 50! If copyright laws are properly implemented, as being lobbied by major companies like MS and Oracle, just the Windows will cost Rs 5k and Office will cost even higher. This will be a severe impediment towards development. But unless assurities are provided by Pak govt to implement copyright laws, major investment by foreign companies will remain low.

    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.
    No doubt this is all true. But as we speak, the major bottleneck in internet explosion in Pakistan is Pakistan Telecommunication Authority itself. It is inefficient and till 2002 has a monopoly over data upload. There broadband is narrow and is unable to support the great growth of which we are talking about.

    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.
    This made me smile. Do you believe it? A fresh IT BCS/MCS gets a starting salary of about Rs 15k, and this goes up to like Rs 50k in about 5 years time. A very experienced (abt 10 yrs) experience IT professional can expect to go up to Rs 100K with a car. This is a rare commodity in Pak bcz many of them leave for USA and Germany much before this time.

    Strong government support is available and incubation programmes are expanding in Pakistan and abroad.
    How true! Where the govts themselves don't know how long they will last, how can the policies be conistent. Where the customes duty is levied on computer equipment one year, withdrawn the next and again levied the next, how can you plan ahead? Lets hope, for our country's sake that the present policies continue for the forseeable future.

    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.
    This is quite true. With one snag. Pakistan needs to take many steps yet, to bring up its infratructure. A simple example here. At this moment the Pakistani law does not allow a credit card transaction over the internet. It has been pointed out to the Ministry and the State Bank to modify the laws, otherwise E-Commerce will coninue to lag behind in our country. Todate - no luck!

    We must always remain hopeful, and yes, the overseas Pakistanis will definitely have to play a larger role if Pakistan has to get its rightful place in the new IT world.

    The writer is a citizen of this country.



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    Don't Blame me...
    C'est La Vie

    Comment


      #3
      Mohabbat, I think u should change ur nick to Nafrat. It will suit u much better.

      Cant u see the talk of the matter over here is prosperity. Why do you have to drag in politics every time and every where. Or is it that u cannot stand another potential IT power on the scene.

      Comment


        #4
        Originally posted by mohabbat:

        Isnt this exactly opposite what Musharraf said that Indians and Pakistani are genetically and culturally different.

        Indeed it is different, maybe because our leaders dont need a herd mentality and can express their "personal" beliefs even if they are in contrast with others

        This is indeed blasphemy that Sartaj Aziz thinks that Pakistanis and Hindus have the same genetic code,

        dont all humans really have the same genetic code i.e. more similarities than differences otherwise try telling a pathan he has the exact same genetic code as a kerala babu

        when the great CEO has ruled that we are genetically different! Aziz should be put away for this crime against the nationhood of Pakistan.

        *yawn* mohabbat you get so preditable...that is when you dont cut and paste...dont you have any indian boards to go play on

        [/B][/QUOTE]

        The greatest trick the devil ever pulled was convincing the world he did not exist. And like that... he is gone.

        Comment


          #5
          Is this discussion going somewhere?

          The original post was to discuss the IT potential of Pakistan, until some 'friendly' neigbours decided to pitch in with their own brand of 'intellect'.

          For those who are not interested in this topic and, instead want to discuss the (1) genetic code and (2) Indo-Pak relations, please go post in 'World Affairs' or better still open your own Discussion Board web site, where you can rant all you want (and read it yourselves).

          Pir sahib: You should seriously consider implementing the technology for opening threads with invited guests only or better still restricted entry into forums!

          Take it easy, fellas.

          Ciao!

          Comment


            #6
            These Indian posts....it just reflects their own mentality. That's it.

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            Who says nothing is impossible? I've been doing nothing all my life!

            Comment

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