Building IT, Technology and Innovation Park in Karachi – A strong avenue for Economic Development in Pakistan

The IT industry of Pakistan has a potential to become major economic contributor to the country. Pakistan has only 125 CMM and ISO certified companies which guarantees on-time delivery and efficiency.

Pakistan can help establish its name as a leader in quality software and IT Services in the world. Karachi being the ‘New York of Pakistan’ is highly favorable place to establish an IT park. The metropolitan area of Karachi has a population of more than 15 million, dozens of HEC-recognized IT departments and universities and great concentration of IT firms. Karachi is an International travel and financial hub. It is famous for its sea port and is the heart beat of economy of the country.

Trained professionals of IT over 100,000 and an increased number of educational institutes are adding a great number trained resources to the vibrant job market of IT ensuring that a talented pool of resources with exceptional skills is always available to this industry. But due to the lack of sufficient facilities and opportunities, most of the talent pool is unable to contribute to the development of the country.

IT Technology parks provide the organizations a hassle free setup on friendly policies and low cost. State of the art facilities and office spaces are provided by the IT parks with the aim of expanding IT enterprises and providing a one stop solution for setups.

After 1970, many developing countries have established technology parks at regional and national levels for regional and economic development by providing infrastructure to tech-businesses for creating new opportunities of employment. The main aims for establishment of technology parks include knowledge flow and encouraging cooperation between industries and universities to create innovation firms, high-tech jobs and attracting the enterprises and foreign investment in the country.

Pakistan’s current software export is approximately 1 billion Dollars compared to Indian Software export of 111 Billion Dollars. With limited number of IT Parks where the Fast Internet, 24 hours availability of electricity, secured premises is available, we have stunted IT Sector growth in Pakistan.

There are only 8 IT Parks in Lahore including Arfa Technology Park and only 5 located in Islamabad with none located in Karachi. Private enterprises have done a make shift kind of facilities where building owners ensure 24/7 hour electricity, security and uninterrupted fast internet but there is no such facility provided by the government.

Pakistan is in a decisive stage. Decisions that are taken now will have a strong impact on the future of Pakistan. The need of the hour is to invest in making Pakistan a service based economy. IT industry is an example of service industry that can significantly boost the economy of Pakistan as demonstrated by other developing countries like Philippines, India and Singapore. IT industry unlike other industries does not require heavy machineries. Over 100,000 people are officially employed in IT industry of Pakistan and many more are employed informally. Unfortunately, IT industry in Pakistan is not given the same industry status as textile and this in some way impacted the development of this industry in the country. Pakistan has only a share of 0.9 percent of the global IT sector that is approximately 303.8 billion dollars. If significant steps are taken by the Government then it can have great effect on the GDP and foreign investment.

In spite of the challenges faced by the country including political instability, energy crisis and lack of promotion, IT sector of Pakistan has gained global recognition. There have been success stories in the various domains of IT like mobile applications, healthcare, finance and telecom. As Per reports by PSEB (Pakistan Software Export Board), the share of Pakistan in the global sales is 2.8 billion dollars, out of which 1.6 billion dollars accounts for country’s IT enabled services and software exports.

The main focus of Pakistan has been mainly higher end products of software, whereas other developing countries like Philippines and India have focused on more basic IT enabled services like services outsourcing and software.

Electronics Commission of India led the development work of India’s IT sector. Electronics commission’s work was supported by UNDP (United Nations Development Programme) and a master plan was developed for regional centers of computing. The key focus of the work was on knowledge development and intellectual capital. Today India shares 39.2 % of the global IT industry. The industry is continuing to develop almost and 230,000 jobs are generated every year. Almost 2.8 million direct employments and 8.9 indirect employments are being provided by the IT industry of India. Telecom and IT ministry of Pakistan can leverage large international organizations support to build similar regional IT Parks.

Another developing country where IT services development and promotion has played a great role in the development of the economy of the country is Philippines. Since 2006, the BPO (Business Process Outsourcing) industry of Philippines is developed 46% annually and is overtaking the progress in IT sector in India.

The IT sector in Pakistan has great potential. However, there is significant need for development of IT parks and promotion in order to strengthen the economy of the country and to compete with other developing countries. Issues like lack of world class research & development, absence of state of the art infrastructure and payment gateways etc. have created difficulties in the development of this industry. With a clear vision, strategy and direction, the IT industry can grow in the country resulting in more employment opportunities and alleviating poverty from the country. Development in the IT sector of the country will attract foreign investments in the country which will also have an impact on other industries as well.

The establishment of technology parks is crucial for the economic development of the country. Software technology parks can be helpful in the creation of new businesses and attract foreign investments. Results show that half of the firms located in already established technology parks are startups. The IT parks already established in Pakistan are small in area as compared to other Asian counterparts such as India, China and Korea etc. This Study shows that to create new businesses, new jobs and to increase the GDP of the country, Government needs to establish more IT parks as well as promote research and development in the country.

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