It Industry in Pakistan

EXECUTIVE SUMMARY

PIM undertook the preparation of this report with the conviction that Information Technology truly holds the potential to act as an enabler of economic revival and growth especially for countries like Pakistan.

We are also painfully aware that Pakistan has lagged dangerously behind other regional countries in exploiting Information Technology as a catalyst for economic revival. However we feel that the explosive growth of the Internet and the coming tidal wave of E-Commerce still provide immense possibilities for Pakistan to exploit their potential and use them for accelerating its economic revival.

We are also painfully conscious of the fact that the hyper speed of change in the Information Technology domain means that the IT year is equivalent to one month in conventional terms. This fact dictates that any meaningful action or decisions for the IT industry in Pakistan has to be implemented immediately. Pakistan and countries like Pakistan who are hoping to exploit the inherent potential of Information Technology must act immediately and decisively to restructure their domestic Information Technology industries to become effective role players within the global IT scenario. The luxury of long-winded debate and discussions and the formations of commissions, which will submit reports in months, will be counter productive to the spirit of any Information Technology initiatives.

From these workshops a powerful feeling has emerged that any meaningful IT initiative in Pakistan will necessarily have to be a partnership between the government and its agencies on one hand and the private sector on the other hand. Bold, unconventional and strategically correct decisions are needed. Effective top managers with the right mix of vision and managerial competence are needed. A huge amount of financing is needed in domestic resources and foreign exchange. Above all the will to prevail will be needed, from the government of Pakistan, to chart the right course for our Information technology initiative and then stay the course in spite of the innumerable hurdles which are sure to bedevil the path to success.

From PIM's perspective this report provides an insider's view of the IT industry and the problems it faces. Most importantly it also provides the insider's view to some of the major problems facing the industry and their solutions. It is hoped that this report will help the IT decision makers in tackling the problems of the IT industry.

The major problems of the IT industry in Pakistan as identified by these two workshops are:

* Massive Brain Drain

* Serious shortages of high power programmers and IT professionals in needed latest technologies

* Inability of Pakistani firms to tap and penetrate lucrative foreign markets

* Communication infrastructure bottlenecks caused by PTCL's inability to provide the IT industry needed band-width and communication capabilities of international standard at competitive prices

* Lack of entrepreneurial skills and managerial know-how of IT professionals

* Lack of actual and practical government policies and support for industry

* IT industry has serious problems in securing financing and credit

* Unwillingness of local business managers to pay appropriate prices for locally developed software

* Lack of incubation and startup companies

* Low computerization of the government and its departments

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THE NEED FOR THE REPORT

PIM developed its strategic plan (2000 - 2005) in January 2000. This Strategic plan was discussed and approved in the 30th meeting of PIM's Board of Governors held on 24th February in Karachi.

In its strategic Plan PIM has predicted the explosive and exponential growth of the IT industry in Pakistan and had underscored the fact that IT could be the enabler for stimulating Pakistan's economy from its present slump.

Chairman PIM Board of Governors, Mr. Abu Shamim Ariff, was particularly interested in the predictions and conclusions of PIM regarding the future state of Pakistani industry and floated the idea that PIM should prepare a generalized report on the IT industry in Pakistan and it should be presented to the IT decision makers in Pakistan. He also emphasized that PIM would do well to concentrate more on the software segment of the IT industry. PIM Board of Governors enthusiastically endorsed the idea.

PIM Board of Governors directed PIM to work towards the preparation of this report and to have it ready by the end of April 2000. However Chairman PIM Board of Governors later on extended the deadline to end May 2000.

PIM's report on the IT Industry in Pakistan was completed in the first week of June 2000.

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A NOTE ON THE METHODOLOGY USED

After intensive internal debate regarding the approach to follow for the preparation of this report PIM decide to follow the basic methodology which it had followed for strategic plan; the distillation of industry practitioners knowledge and wisdom. For this purpose it was decided to hold two workshops, one in Karachi and the other in Lahore, and invite IT industry leaders and professionals to participate in a controlled discussion of their industry.

PIM decided to use the basic concepts of Strategic Planning and Force Field Analysis for guiding the discussions during the workshops. It was also decided to present the findings of the two workshops as they were without any recommendations from PIM.

The response received to the announcements of the two workshops was overwhelming and PIM was swamped by requests for invitations. The Karachi workshop was held on the 22nd of April 2000 in the PC and was attended by 49 participants and the Lahore workshop was held on the 6th of May 2000 was attended by 35 participants.

Most of the participants were chief executives or senior executives from Pakistan's IT industry. Of the total participants 90% were from the private sector.

The discussions were held in a very free and frank manner and it is highly commendable that all participants