By Mohsin Shahid
Pakistan’s recognition as the ‘Tech Destination of the Year’ at GITEX Global in Dubai highlights the country’s potential to become a major tech hub in the age of information. This accolade not only puts Pakistan on the map for tech innovation but also opens doors for foreign investors to explore one of the most untapped markets. With a rapidly growing youth population and a vibrant entrepreneurial ecosystem, Pakistan stands on the cusp of a tech revolution, poised to make significant contributions to its economy.
Pakistan’s tech industry has experienced exponential growth over the past decade. According to the Pakistan Software Export Board (PSEB), the country’s IT exports crossed $2.6 billion in FY2022, and the industry is expected to grow by 5.4% annually. The sector has seen significant contributions from software development, IT-enabled services, and e-commerce. The government’s commitment to providing tax exemptions, special technology zones, and incubation centers has further boosted the sector’s appeal. This includes incentives to the industry including zero income tax on IT and ITeS exports till June 2025.
According to the Information Technology Board of Investment of Pakistan, the country is home to more than 2,000 IT companies and over 300,000 IT professionals, with significant strength in software development, artificial intelligence (AI), blockchain, and fintech. Startups have also blossomed in the ecosystem, with a record $350 million raised in funding in 2021, showing an appetite for innovation and entrepreneurship. However, in the financial year 2023, startups have experienced a major decline of 77% in terms of funding. Despite this, major global tech firms such as Google, Microsoft, and Huawei have shown interest in tapping into this growing market, further validating Pakistan’s potential as a global tech hub.
Tech industry in Pakistan
Tech industry is seen as the only hope to accommodate the youth bulge in Pakistan. Pakistan’s youth bulge presents a unique opportunity with over 60% of its population under the age of 30, Pakistan boasts one of the largest youth demographics globally. If nurtured and equipped with the right skills, this youthful workforce could become the backbone of the tech industry. According to the World Bank, Pakistan’s labor force is expected to grow by 4.1% annually, which means that millions of young Pakistanis will enter the job market every year.
Pakistan’s burgeoning tech sector has already started addressing this opportunity. Initiatives such as the “DigiSkills” program launched by the government aim to provide digital literacy and skills training to one million people. Additionally, the National Incubation Centers (NICs) and Special Technology Zones (STZs) are attracting tech talent and startups, nurturing innovation at the grassroots level. The tech industry’s contribution to Pakistan’s GDP, currently around 1%, has the potential to skyrocket in the coming years. Analysts predict that Pakistan’s IT exports could cross $5 billion by 2025, with some estimates suggesting that the country could capture up to $10 billion annually in the near future.
To capitalize on this potential, Pakistan must continue improving internet access, enhancing cybersecurity protocols, and incentivizing innovation. Expanding broadband penetration, which currently sits at approximately 47%, will be key to tapping into rural areas and providing equitable opportunities for the youth. If the tech sector grows as forecasted, it could become one of the top contributors to the national GDP, accelerating economic growth and job creation. However, it all depends on intensive investments in research and development programs in the annual budget allocations by the government of Pakistan.
Special Technology Zones
Pakistan’s rise as a tech destination is also a call to foreign investors seeking high-growth opportunities. With a population of over 240 million and increasing internet penetration, the country offers a massive consumer base for tech products and services. Special Technology Zones (STZs) provide attractive incentives, including tax holidays and duty-free imports of equipment, making Pakistan a prime destination for investors. The country’s strategic location, acting as a gateway between South Asia, Central Asia, and the Middle East, further enhances its attractiveness for companies looking to expand their operations regionally.
Pakistan’s recognition at GITEX Global is a testament to its immense potential in the global tech industry. With a growing youth population, rising tech exports, and government initiatives supporting innovation, Pakistan is well on its way to becoming a leading tech hub in the region. The future of the tech industry in Pakistan looks promising, offering significant opportunities for both domestic growth and foreign investment. If the current momentum is maintained, the tech sector could be a game-changer for Pakistan’s economic future.
