In FY23, Software Business Dominates Pakistan’s IT Exports Contributing Over 50%

 Pakistan’s thriving IT industry has emerged as a significant player in the global market, with the software business contributing a substantial 52 percent to the country’s IT exports during the financial year 2022-23 (FY23).

According to data recently released by the State Bank of Pakistan (SBP), the combined exports of software consultancy and computer software amounted to $1.36 billion out of the total exports of $2.61 billion recorded in FY23.

The software industry takes center stage in Pakistan’s IT exports, owing to the relatively underdeveloped state of its hardware industry. Furthermore, the official statistics include export proceeds of $743 million in FY23 for Other Computer Services. According to current industry estimates, an additional $1.5 billion in IT exports (including software and software consultancy) were estimated to have occurred through the grey market in 2019, which could grow to $2.5 billion by FY22, according to the central bank’s recent report.

Small software exporters’ hegemony and the requirement for diversification

It’s interesting to note that the majority of the nation’s IT exports come from tiny software companies, with the majority of them doing less than $0.1 million in exports yearly. According to the research, the IT exports are less diverse than other exports, with the US alone accounting for more than half of all exports, and contributing the lion’s share of that portion.

Given these details, Noman Said, a well-known software exporter and CEO of SI Global Solutions, underlined the necessity for the government to develop long-term policies that support IT exporters by providing foreign currency accounts, incentives, and tax holidays. He predicted that these steps would mainly help software exports. Pakistan should look into both conventional and non-traditional markets, such as European nations, GCC states, African states, and the Asia-Pacific area, in order to realize the full export potential of the software business. Diversifying services while conducting thorough market research and generating new ideas is the secret to success. He also suggested that in order to do this, the government and IT firms work together to plan conferences and exhibits that would allow them to successfully access these markets.

IT Skills Development and ICT Education Promotion

Cooperation is necessary between all parties, especially educational institutions, for the IT industry to prosper. Throughout order to ensure a consistent supply of new talent for the business, Noman Said emphasized the need to forge stronger partnerships to support ICT education throughout the nation. In this respect, giving short courses and boot camps for recent graduates who want to learn ICT a high priority might be revolutionary. Additionally, it should be promoted that non-IT professionals pick up IT knowledge and work as freelancers on simple IT tasks.

Service Exports and the IT Sector

With a 35 percent stake and the second-highest export performance after the textile sector, IT is now the largest contributor to the service sector exports.

The CEO of the Pakistan Freelancers Association (PAFLA), Tufail Ahmed Khan, emphasized the vital role that independent contractors have played in boosting the total export of the IT industry. These independent contractors nevertheless send significant amounts of money home, despite the many difficulties they face.

Khan asked the government to work with the business sector to encourage college students and young professionals to embrace self-employment and provide their expert skills in both technical and non-technical sectors on platforms for freelancing. Pakistan would be able to draw in much-needed foreign currency in this way.

Aiming to position Pakistan as a preferred outsourcing hub

With some IT behemoths in industrialized nations outsourcing their projects, a rise in remote employment has been seen. In order to establish Pakistan as the preferred outsourcing center for multinational corporations, Khan underlined the necessity for IT graduates to aggressively pursue such contracts and provide high-quality work.

Conclusion   

In the world of IT exports, Pakistan’s software industry has become a significant player. The nation may encourage the development of its software industry and achieve further substantial advancements in the international IT market with the correct legislation, assistance, and partnerships.

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