Pakistan’s IT sector is emerging as a rare bright spot in an otherwise challenging economic environment, with the government and industry stakeholders highlighting rising IT exports as evidence of ongoing digital transformation. According to the State Bank of Pakistan (SBP), IT and IT-enabled services (ITES) exports crossed $3.2 billion in FY2024, reflecting a year-on-year increase of over 20%. This growth makes IT one of the fastest-rising contributors to Pakistan’s foreign exchange earnings, trailing only textiles and remittances. The government aims to increase IT exports to $5 billion by 2026, signaling optimism for sustained growth.
A Young Workforce and Growing Gig Economy Drive Momentum
The sector benefits from Pakistan’s young demographic, over 60% of the population is under 30 years old, with tens of thousands acquiring digital skills and engaging in freelancing and software development. Pakistan consistently ranks among the top five countries on global gig economy platforms despite infrastructure limitations, illustrating a robust grassroots digital economy.
Structural Constraints Temper Optimism
Despite this momentum, challenges remain. Pakistan’s IT exports are heavily concentrated in freelance and small-scale outsourcing activities such as call centers, coding, and design services. Roughly two-thirds of these revenues come from North America, exposing the sector to external shocks like economic downturns and shifting data protection regulations.
Industry insiders caution that without fostering large firms, increasing research and development capacity, and ensuring consistent policy support, Pakistan risks remaining stuck in low-value segments of the global digital economy.
Regional Comparisons
Compared to Pakistan, India’s IT exports now exceed $200 billion with diversified global markets and higher-value service offerings. Bangladesh, with more than $5 billion in exports, balances freelance and structured outsourcing models under strong government support.
Government Initiatives and Policy Challenges
The government has introduced incentives including tax exemptions for exporters and relaxed foreign currency rules, alongside planned technology parks in Karachi, Lahore, and Islamabad to attract multinational firms and startups.
However, inconsistent implementation, frequent tax policy changes, investors’ refund delays, and sudden internet restrictions have hampered confidence. The lack of international payment gateways like PayPal further complicates freelancers’ ability to receive earnings efficiently.
Talent Shortage and Brain Drain
Pakistan’s education system struggles to produce advanced specialists in areas like AI and data analytics. While many young people gain entry-level IT skills through boot camps, universities lag in preparing talent for higher-value sectors. Additionally, brain drain remains a significant concern as skilled professionals migrate abroad for better opportunities, limiting domestic capacity for innovation and entrepreneurship.
The Upside Potential
A robust IT export base can provide much-needed dollar revenue, helping reduce Pakistan’s chronic current account deficits. The sector generates high-paying jobs and supports broader economic activity in housing, retail, fintech, and digital marketing.
Textile exporters also see IT as a complementary sector, with digital platforms improving supply chain efficiency and expanding e-commerce reach.
Lessons from Regional Peers
Bangladesh and India offer instructive examples of successful IT sector growth by combining structured support, policy stability, and investments in innovation. Vietnam’s emergence as a tech hub benefits from political stability and skills development, attracting global companies like Samsung and Intel.
The Road Ahead
For Pakistan to move beyond a gig-based model toward scalable, innovation-led IT enterprises will require long-term policy stability, infrastructure investments, and strengthened collaboration between government, academia, and industry.
The global shift toward remote work during the COVID-19 pandemic boosted freelance opportunities worldwide, providing Pakistan with a timely entry point. However, intensifying data security demands amid U.S.-China rivalry pose risks for countries lacking robust digital laws.
Crypto.pk will continue monitoring developments in Pakistan’s IT and tech sector, exploring how digital transformation supports broader crypto and fintech innovations.
