Seminar on Resetting and Rebooting Pakistan's IT Sector

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Post Seminar Report Supervised by Brig Masroor Ahmad (Retd), SI (M) Director Defence Studies Branch Institute for Strategic Studies, Research and Analysis (ISSRA)

Compiled and Edited by Ms. Marium Akhtar Mr. Hussain Rizvi

Publication by 2nd SEPTEMBER - 7th OCTOBER 2020 Defence Studies Branch, Institute for Strategic Studies, Research and Analysis (ISSRA) National Defence University (NDU), Islamabad-Pakistan E-mail: [email protected] © 2020 NDU, Islamabad.

Post Seminar Report Supervised by Brig Masroor Ahmad (Retd), SI (M) Director Defence Studies Branch Institute for Strategic Studies, Research and Analysis (ISSRA)

Compiled and Edited by Ms. Marium Akhtar Mr. Hussain Rizvi

The global ICT sector has completely transformed the dynamics of the world's economy and played a central role in enabling economic prosperity across the global landscape. With a population of over 60 million in the 15-29 age bracket, Pakistan has more than 300,000 English speaking ICT professionals with expertise in both current and emerging technologies. This pool of experts is continuously growing; with 20,000 ICT graduates and engineers entering the sector every year. According to Oxford Internet Institute (OII), Pakistan is ranked as the fourth most popular country in the world for freelance development, after India, Bangladesh and US. Likewise, Pakistan is also consistently ranked among the top destinations for IT outsourcing because of the exponential growth of the ICT sector. However, there is still great potential to further expand existing $3 billion ICT export market. There are not only issues relating to the availability of latest ICT but also many barriers persist in the implementation of ICT in Pakistan's multiple sectors. Further, this is not an issue relating to Pakistan but more and less many developing countries are facing barriers in Implementation of ICT Infrastructure. In Pakistan's context, the readiness of our society to use ICT, the actual usage by all stakeholders and the impact that ICT to create enabling business friendly and governance friendly environment should be the core point in focus.

I believe that together, private and public sector of Pakistan can work in synergy for revamping and rebooting our ICT sector in a holistic manner and steer it onto the path of progress and infinite attainment in each sector of our country.

I congratulate DG ISSRA, Major General Asif Ali, HI (M), Director Defence Studies Branch, Brigadier Masroor Ahmed (Retd) and his team for a timely effort as the findings and recommendations acquired from series of events including the Lieutenant General Muhammad Saeed, Hilal-e-Imtiaz (Military) initial seminar and subsequent brainstorming sessions would surely enable the President policy making and implementation circles to formulate, improve and ensure smooth National Defence University execution of the strategies proposed in this comprehensive report for rebooting and resetting of the ICT Sector of Pakistan.

01 02 Foreword

01 02 Preface

The unfolding of ICT revolution has created a quantum gap between the international technological advancement pace and our national standing in this domain. ICT is a key driver of an increasingly knowledge based global economy. Technology has transformational power. It is a great leveler of opportunity within and across economies. Recognizing this potential, several economies in Asia – Pacific have invested heavily in infrastructural and human resource development in ICT. Pakistan has a budding ICT industry and needs special focus as it has immense potential for economic boost for the country. The countries, which are reaping the benefits of ICT today, started thinking about it decades ago. The leading countries had put in place plans and resources in 80s. Hence, there is dire need to evaluate existing situation of Pakistan's ICT Development Industry, discover ICT trends, iIdentify gaps, undertake gap analysis and probe ways to significantly boost Pakistan's ICT Sector. The role of emerging technologies in relationship with public policy, business corporations and education for advancing economic prosperity in Pakistan cannot be ignored. The flux in the global economy highlights the need for constant reappraisal of policy and implementations along with exploration of new markets and services for the uplift of this sector. A conducive policy environment and a concerted strategy is the need of time.

This month long deliberative exercise investigated the barriers, challenges and the way forward in Resetting and Rebooting Pakistan's ICT Sector. The need of the time is to promote a vision for AI led knowledge-economy, innovation and inclusion that will definitely steer the country towards advancement and better productivity in all fields of life.

Major General Asif Ali, Hilal-e-Imtiaz (Military)

Director General Institute for Strategic Studies, Research and Analysis (ISSRA)

03 04 Preface

Major General Asif Ali, Hilal-e-Imtiaz (Military)

Director General Institute for Strategic Studies, Research and Analysis (ISSRA)

03 04 Seminar / Brainstorming Sessions Resetting and Rebooting Pakistan's ICT Sector Seminar / Brainstorming Sessions Resetting and Rebooting Pakistan's ICT Sector Background

NDU was tasked by GHQ to carry out an intellectual exercise and come up with a way forward to Reset and Reboot Pakistan's ICT Sector. In order to accumulate policy recommendations for IT industry's growth and progress, it was decided that the subject will be further explored in collaboration with all stakeholders, experts, technical specialists, academicians and practitioners from ICT public/private industry of the country to take this exercise to an objective and logical conclusion.

During the discussion, equal opportunities were provided to all the participants to proffer practical suggestions relating to overcoming the challenges faced to their respective sectors in order to crystalize the thought process and finalize the recommendations. The final paper is elaborated in succeeding paragraphs. Program of the Final Seminar of 7th October 20 is attached as Annex A.

Sequence

The report comprising the accentuation of the overall seminar and brainstorming sessions is divided Methodology Adopted into following parts: -

Executive Summary NDU decided to hold an initial seminar on 'Resetting and Rebooting Pakistan's ICT Sector' on 2nd Part - I ICT Landscape Comparison with other Countries September 2020 for setting the stage and then further brainstorm the whole ICT Sector under three different Sub Sectors via focused roundtables in September to October 2020. Lastly, a final seminar was Part - II Key Priority Interventions (Issues of National Significance) planned to be conducted in 1st week of October 2020 where all decision makers were planned to be invited and The findings and recommendations collected through these brainstorming sessions to be proffered in Part - III National ICT HR and Infrastructure Landscape front of them. Part - IV Promotion & Development of ICT Industry

NDU conducted the workshops by dividing the whole ICT Sector under three different Sub Sectors, Part - V Use of Emerging ICT Tools in Socioeconomic Sectors namely ““HR and Connectivity Development in ICT”, “ICT Market Development and Software Export” and “Use of ICT in Socioeconomic Sectors” on 9th, 16th and 23rd September 2020, respectively. Part - VI Recommendations Requiring Immediate Actions

07 08 Background

Sequence

The report comprising the accentuation of the overall seminar and brainstorming sessions is divided Methodology Adopted into following parts: -

07 08 Executive Summary

This executive summary highlights key recommendations made during the course of elaborative intellectual exercise conducted by National Defence University in collaboration with all relevant stakeholders, experts, regulators, industry specialists and academia from ICT sector.

Vision

This exercise aimed to generate familiarity about ICT sector, understand its landscape and dissect major interventions required to reset and reboot Pakistan's ICT Sector, while extending the benefits of this effort to the global ICT ecosystem and the wider knowledge economy of Pakistan. The recommendations provided in this document take into consideration the rapidly evolving ICT environment and stress that policy interventions will require continuous assessment against set objectives.

Objectives

This exercise underpins the exponential role of the disruptive ICT sector in enabling income generation, employment promotion, export potential, effective governance and innovation. The main objectives of this exercise are summarized below: -

Ÿ Evaluate the Existing Situation of Pakistan's ICT industry.

Ÿ Discover Emerging IT Trends.

Ÿ Identify Gaps, Undertake Gap Analysis to and Probe Ways to Significantly Boost Pakistan's ICT industry.

Ÿ Generate Impactful Debate for Advancing Excellence and Growth in ICT Sector.

09 10 Executive Summary

Vision

Objectives

Ÿ Evaluate the Existing Situation of Pakistan's ICT industry.

Ÿ Discover Emerging IT Trends.

Ÿ Identify Gaps, Undertake Gap Analysis to and Probe Ways to Significantly Boost Pakistan's ICT industry.

Ÿ Generate Impactful Debate for Advancing Excellence and Growth in ICT Sector.

09 10 Ÿ Promote a Vision for AI-led Knowledge-Economy, Innovation and Inclusion.

Ÿ Identify Possible Policy Interventions and Facilitatory Mechanisms.

Ÿ Elicit Suggestions for Improving ICT Infrastructure to improve the Sector's Economic Contributionto the GDP.

Key Priority Interventions

Following Issues of National Significance were deliberated extensively as part of this exercise: a. National IT Policy: National IT Policies from 2000 to 2018 were discussed at length during this exercise. Government's declared vision 'to become a strategic enabler for an accelerated digitization ecosystem to expand the knowledge-based economy and spur economic growth' served as the underlying objective of the whole exercise. Government has undertaken a productive exercise in identifying key areas of concern, and spelled out a policy document to share its vision (Digital Pakistan). However, during the course of this exercise at NDU, we identified a few challenges and gaps in policy framework like correlating Cyberspace Sovereignty, Infrastructure and use of AI. There is also a lack of clarity in policy ownership, its implementation and governance. Some of the policy recommendations addressing these challenges will be covered in subsequent paragraphs. b. National AI Strategy: As a key outcome of this exercise, an impetus has been placed to actively promote a vision for a robust National Artificial Intelligence Strategy to shape an inclusive, prosperous and thriving future. According to PwC, Artificial Intelligence could contribute up to $15.7 trillion to the global economy by 2030. Meanwhile, realizing the disruptive potential of emerging technologies, more than 22 countries have already formulated a National AI strategy in the past three years. Formulating a National AI Strategy & Framework can accelerate our journey towards becoming a leading Digital Nation. c. National Cyberspace Sovereignty: National Cyberspace sovereignty means that the state exercises control over all aspects of the Internet within a country's boundaries; including political, economic, cultural and technological activities. This report details the challenges in the cyberspace and ways to overcome those challenges.

11 12 Ÿ Promote a Vision for AI-led Knowledge-Economy, Innovation and Inclusion.

Ÿ Identify Possible Policy Interventions and Facilitatory Mechanisms.

Ÿ Elicit Suggestions for Improving ICT Infrastructure to improve the Sector's Economic Contributionto the GDP.

Key Priority Interventions

11 12 Key Recommendations b. Infrastructure Development After undertaking a detailed landscape study of Pakistan and its peer countries in the region, this exercise identified key challenges / recommendations / expected impact to inform policy formulation. a. Human Resource Development Challenges Recommendations Expected Impact

1. Improving affordability 1. Increase in internet Challenges Recommendations Expected Impact 1. Broadband – penetration will help Availability and Cost & quality of internet 1. Employability – 1. Theoretical and 1. Significantly penetration adoption & promotion Lack of specialised applied knowledge improving revenue of ICT skills of Emerging Tech e.g. per ICT resource 2. Formulating a 2. Simplifying RoW will 2. RoW – Complexities AI, Big Data, IoT help in harmonizing in deploying Fiber National RoW policy 2. FDI influx for Fiber Deployment tariff & policy controls 2. Quality – Outdated 2. Incentivizing 3. Energy Wheeling Curriculum and Lack Industry-Academia 3. Highly Trained HR 3. Implement Energy will bring in private 3. Power– Costly and of Trained Teachers Liaison sector investment unstable supply of Wheeling Policy for 4. Cutting-edge R&D and facilitate local electricity offsetting expensive 3. Increase R&D energy costs data centres 3. R&D – Lack of investment in establishment Investment emerging fields Key Takeaway Key Takeaway Developing skilled human resource is key to ICT Infrastructure is the spine of sector that unlocking Pakistan’s ICT potential requires special attention

13 14 Key Recommendations b. Infrastructure Development After undertaking a detailed landscape study of Pakistan and its peer countries in the region, this exercise identified key challenges / recommendations / expected impact to inform policy formulation. a. Human Resource Development Challenges Recommendations Expected Impact

13 14 a. Development of ICT Industry ii. E-Commerce, E-Justice, Fintech

Challenges Recommendations Expected Impact

1. STZs will bring in 1. STZ’s to promote 1. Infrastructure – ICT EoDB, private sector Conducive Physical investments, 2. Declare cities as ICT Environment Hubs/Digital Cities encouraging industry- academia collab. 3. Digitalization of 2. Digital Ecosystem – governance, 2. Digitalization will Data Oriented Mindset automation of Public result in better Sector transparency, 3. Investment – Access accountability and 4. Removing barriers to to Capital for innovators entry for VCs and corruption-resistance & entrepreneurs Angel Investors 3. VC regimes will bring in FDI, make towards 5. Incentivize 4. Timeliness – Adopting investment in 5G Pak-based Unicorns next generation tech possible Key Takeaway Overcoming key challenges is imperative for meaningful growth rate of ICT Industry d. Emerging ICT Tools in Socio Economic Lens iii. Proptech I. E-Agri, E-Health, E-Energy

15 16 a. Development of ICT Industry ii. E-Commerce, E-Justice, Fintech

Challenges Recommendations Expected Impact

15 16 ICT LANDSCAPE PART COMPARISON WITH OTHER COUNTRIES I ICT LANDSCAPE PART COMPARISON WITH OTHER COUNTRIES I ICT Landscape Comparison estimated to produce 20,000. On the other side, in ITO and BPO, which have a cumulative share (Details attached as Annex E) Philippines BPO of 65% in total offshore services; very few firms with other Countries exports over $30bn annually and employs over are active in vertical and knowledge process 1.2mn. Pakistan's exports from BPO accounts outsourcing. The Global share of Pakistan´s IT industry is vation trends and performance of approximately for 26% out of total national IT exports. (Details estimated at US$3 billion, including global sales 130 economies. Most of the top science and attached as Annex F) The actual size of Pakistan's ICT industry is revenue of US$1.6 billion. According to MoITT, technology clusters are in the USA, China, unknown, exports are often booked as an estimated strength of 300,000 skilled Germany, Brazil, India, Iran, and the Russian Pakistan has been ranked 76th out of 100 remittances, constitutes approximately 1% of English-speaking IT professionals workforce Federation, and Turkey also makes the top 100 countries on the Inclusive Internet Index 2020 GDP. By contrast, India which started off in 1998 exists in the economy, of which 110,000-125,000 list, whereas, Pakistan's rank is 107. In terms of released by the Economist Intelligence Unit and stood at 1% share in GDP now stands at 8% are engaged in freelancing. There are almost top Global Outsourcing Destinations which (EIU), falling into the last quartile of the global of GDP contributed by its ICT industry in 2020. 6000-8000 IT companies in Pakistan, according depends upon factors such as Financial index overall. The Inclusive Internet Index India's IT industry generates $191 billion in to estimates of Pakistan Software Houses Attractiveness, Skilled Personnel and Ava- benchmarks countries on the Internet's revenues and generated 4.4 million jobs in FY Association for IT & ITES (P@SHA). On paper, ilability, Business Environment and Digital availability, affordability, relevance and the 2020. According to estimations, Pakistan's nine STPs offering around 700,000 square feet Resonance, Egypt is at 14th rank while Pakistan readiness of people to use it. According to the digital financial market potential is worth $36 of IT-enabled office space exist. Seven has gone down by 12 places since 2015 and Internet Penetration of Asian Peer Group billion. It has the potential to improve GDP by multinational companies have ´Development currently rests at 37th position (Details attached Countries Survey by the World Bank, Pakistan 7%, creating 4 million jobs and $250 billion worth Centers´ in Pakistan. Regarding the Digital as Annex B, C). Egypt's Tech Parks/Zones have has the lowest Internet penetration among of deposits into circulation. Landscape of Pakistan, there are more than 169 created over 196,000 jobs and its ICT sector developing countries as compared to India, Pakistan's Potential million mobile subscribers, more than 80 million exports increased from 1.87 billion USD in 2015 Bangladesh, Vietnam, Nepal, Laos, and Indonesia. Internet Speed Index also shows internet users, 20% of total population having to 3.26 billion USD in 2017. (Details attached as According to a report published by State Bank of Pakistan at the lowest position as compared to bank accounts and only 1% have credit cards in Annex D). IT Growth is directly linked to Talent Pakistan (SBP), Pakistan's ICT is one of the other regional and Asian countries. (Details the country. Pool; Egypt achieved this, in part, by developing three sectors with the potential to boost the attached as Annex G) Pakistan's e-commerce Special Technology Zones. Egypt produces country's overall exports by manifolds as part of Global Innovation Index analyzes global inno- percentage of retail is very low (<0.5%) as 50,000 IT graduates per year; Pakistan is the global trade system called as Global Value compared to India (2.2%), USA (9%) and China Chain (GVC). Services provided under the ICT (23.1%). (Details attached as Annex H) are one of the most promising areas for Domestic Revenues & Exports are co-related Pakistan's future exports. The sector, which was with each other e.g. for every $3bn Indian IT almost non-existent in the early 2000s, grew Exports, India has a domestic demand of $1bn extensively during the last decade. This is IT business. (Details attached as Annex I) Therefore, it is pertinent to encourage domestic ICT spend, fulfilled by local ICT Companies. Empowering the domestic industry supports capacity building, enhances exports capacity, import substitution, employment creation, skill development, builds profile/brand and increases product development & local innovation. (Detailed attached as Annex J).

In comparison to mature markets like India; Philippines, Sri Lanka, Vietnam, Egypt, Mexico etc., Pakistan's share in global offshore services exports is minimal, at 0.1%. Most of the activities of Pakistan's offshore services firms are concentrated around low value-added services

19 20 ICT Landscape Comparison estimated to produce 20,000. On the other side, in ITO and BPO, which have a cumulative share (Details attached as Annex E) Philippines BPO of 65% in total offshore services; very few firms with other Countries exports over $30bn annually and employs over are active in vertical and knowledge process 1.2mn. Pakistan's exports from BPO accounts outsourcing. The Global share of Pakistan´s IT industry is vation trends and performance of approximately for 26% out of total national IT exports. (Details estimated at US$3 billion, including global sales 130 economies. Most of the top science and attached as Annex F) The actual size of Pakistan's ICT industry is revenue of US$1.6 billion. According to MoITT, technology clusters are in the USA, China, unknown, exports are often booked as an estimated strength of 300,000 skilled Germany, Brazil, India, Iran, and the Russian Pakistan has been ranked 76th out of 100 remittances, constitutes approximately 1% of English-speaking IT professionals workforce Federation, and Turkey also makes the top 100 countries on the Inclusive Internet Index 2020 GDP. By contrast, India which started off in 1998 exists in the economy, of which 110,000-125,000 list, whereas, Pakistan's rank is 107. In terms of released by the Economist Intelligence Unit and stood at 1% share in GDP now stands at 8% are engaged in freelancing. There are almost top Global Outsourcing Destinations which (EIU), falling into the last quartile of the global of GDP contributed by its ICT industry in 2020. 6000-8000 IT companies in Pakistan, according depends upon factors such as Financial index overall. The Inclusive Internet Index India's IT industry generates $191 billion in to estimates of Pakistan Software Houses Attractiveness, Skilled Personnel and Ava- benchmarks countries on the Internet's revenues and generated 4.4 million jobs in FY Association for IT & ITES (P@SHA). On paper, ilability, Business Environment and Digital availability, affordability, relevance and the 2020. According to estimations, Pakistan's nine STPs offering around 700,000 square feet Resonance, Egypt is at 14th rank while Pakistan readiness of people to use it. According to the digital financial market potential is worth $36 of IT-enabled office space exist. Seven has gone down by 12 places since 2015 and Internet Penetration of Asian Peer Group billion. It has the potential to improve GDP by multinational companies have ´Development currently rests at 37th position (Details attached Countries Survey by the World Bank, Pakistan 7%, creating 4 million jobs and $250 billion worth Centers´ in Pakistan. Regarding the Digital as Annex B, C). Egypt's Tech Parks/Zones have has the lowest Internet penetration among of deposits into circulation. Landscape of Pakistan, there are more than 169 created over 196,000 jobs and its ICT sector developing countries as compared to India, Pakistan's Potential million mobile subscribers, more than 80 million exports increased from 1.87 billion USD in 2015 Bangladesh, Vietnam, Nepal, Laos, and Indonesia. Internet Speed Index also shows internet users, 20% of total population having to 3.26 billion USD in 2017. (Details attached as According to a report published by State Bank of Pakistan at the lowest position as compared to bank accounts and only 1% have credit cards in Annex D). IT Growth is directly linked to Talent Pakistan (SBP), Pakistan's ICT is one of the other regional and Asian countries. (Details the country. Pool; Egypt achieved this, in part, by developing three sectors with the potential to boost the attached as Annex G) Pakistan's e-commerce Special Technology Zones. Egypt produces country's overall exports by manifolds as part of Global Innovation Index analyzes global inno- percentage of retail is very low (<0.5%) as 50,000 IT graduates per year; Pakistan is the global trade system called as Global Value compared to India (2.2%), USA (9%) and China Chain (GVC). Services provided under the ICT (23.1%). (Details attached as Annex H) are one of the most promising areas for Domestic Revenues & Exports are co-related Pakistan's future exports. The sector, which was with each other e.g. for every $3bn Indian IT almost non-existent in the early 2000s, grew Exports, India has a domestic demand of $1bn extensively during the last decade. This is IT business. (Details attached as Annex I) Therefore, it is pertinent to encourage domestic ICT spend, fulfilled by local ICT Companies. Empowering the domestic industry supports capacity building, enhances exports capacity, import substitution, employment creation, skill development, builds profile/brand and increases product development & local innovation. (Detailed attached as Annex J).

19 20 evident from the double-digit growth in exports of month of ongoing financial year 2020-21. This ranked at the number four for a freelance report encompasses concrete sector wise segments such as the software consultancy shows growth of 40.90% when compared to development in the world. Traditional investors recommendations, which if adopted in true letter services, call centers and other software and $114.960 million earned through provision of from other Pakistani sectors like textile, fertilizers and spirit can be a roadmap for policy computer services during 2006 to 2019. services during the corresponding period of last are also taking special interest in the startup development, amendments and efficient fiscal year 2019-20. However, the country's ecosystem. In the traditional IT outsourcing, implementation mechanism in the future. Digital growth in Pakistan is going through a freelancers also earn another $1.2 billion in other South Asian nations are becoming rapid evolution. IT/ITeS Sector is one of the exports, an amount not recorded by the central increasingly expensive and these countries are fastest growing sectors of Pakistan contributing bank as they are not registered. Moreover, finding it hard to compete in technology areas about 1% of GDP of Pakistan at about 3 billion another $600 million in exports are from those like artificial intelligence, internet of things, cyber USD. This has doubled in the past four years and companies that do not bring their revenues to security, automation, etc. Relevant stakeholders is expected to grow another 100% in the next two Pakistan. In accordance with Pakistan Vision must work together for the progress and export to four years to $7 billion. This growth rate can be 2025 and the Digital Policy of Pakistan 2018, the promotion of the IT sector. In this regard, this significantly improved by meticulous policy ICT industry size is targeted to reach $20 billion interventions. According to SBP estimates, IT by 2025. exports were recorded to be the highest at $1.067 billion in the fiscal year 2017-18 There exist a promising conditions for the compared to $939 million registered in the advancement and growth of the ICT/IT sector in previous fiscal year. Internet penetration the present environment, as most importantly, increased from 2% to over 30% in the past 4 the security situation of Pakistan has improved. years. Pakistan earned US $161.980 million by Startups like Careem, Afiniti, Daraz, providing different information technology (IT) zameen.com, rozee.pk and their successes are services in various countries during the first bringing investment into Pakistan. Pakistan was

21 22 evident from the double-digit growth in exports of month of ongoing financial year 2020-21. This ranked at the number four for a freelance report encompasses concrete sector wise segments such as the software consultancy shows growth of 40.90% when compared to development in the world. Traditional investors recommendations, which if adopted in true letter services, call centers and other software and $114.960 million earned through provision of from other Pakistani sectors like textile, fertilizers and spirit can be a roadmap for policy computer services during 2006 to 2019. services during the corresponding period of last are also taking special interest in the startup development, amendments and efficient fiscal year 2019-20. However, the country's ecosystem. In the traditional IT outsourcing, implementation mechanism in the future. Digital growth in Pakistan is going through a freelancers also earn another $1.2 billion in other South Asian nations are becoming rapid evolution. IT/ITeS Sector is one of the exports, an amount not recorded by the central increasingly expensive and these countries are fastest growing sectors of Pakistan contributing bank as they are not registered. Moreover, finding it hard to compete in technology areas about 1% of GDP of Pakistan at about 3 billion another $600 million in exports are from those like artificial intelligence, internet of things, cyber USD. This has doubled in the past four years and companies that do not bring their revenues to security, automation, etc. Relevant stakeholders is expected to grow another 100% in the next two Pakistan. In accordance with Pakistan Vision must work together for the progress and export to four years to $7 billion. This growth rate can be 2025 and the Digital Policy of Pakistan 2018, the promotion of the IT sector. In this regard, this significantly improved by meticulous policy ICT industry size is targeted to reach $20 billion interventions. According to SBP estimates, IT by 2025. exports were recorded to be the highest at $1.067 billion in the fiscal year 2017-18 There exist a promising conditions for the compared to $939 million registered in the advancement and growth of the ICT/IT sector in previous fiscal year. Internet penetration the present environment, as most importantly, increased from 2% to over 30% in the past 4 the security situation of Pakistan has improved. years. Pakistan earned US $161.980 million by Startups like Careem, Afiniti, Daraz, providing different information technology (IT) zameen.com, rozee.pk and their successes are services in various countries during the first bringing investment into Pakistan. Pakistan was

21 22 PART ISSUES OF NATIONAL SIGNIFICANCE II PART ISSUES OF NATIONAL SIGNIFICANCE II Issues of National Significance humanity. The eco-system of Artificial Intelligence is considered the most strategic and disruptive technology of the 21st century. Andrew Ng, Co- General Government's declared vision 'to become a Founder Coursera and formerly Chief Scientist at strategic enabler for an accelerated digitization Baidu and Google Brain, compares 'the We now live in an age where ICT has become ecosystem to expand the knowledge-based transformational impact of AI to that of electricity the key driver for progression of any nation. economy and spur economic growth' served as 100 years back'. Artificial Intelligence could Investment, development and fostering of the the underlying objective of the whole exercise. contribute up to $15.7 trillion to the global econ- ICT sector is proportionally linked to Inno- However, there are challenges such as discrep- omy by 2030, according to PWC. AI will eliminate vational, developmental, GDP and HDI indica- ancies in policy ownership, its implementation 1.8 million jobs but create 2.3 million by 2020, tors of progressing economies. This relationship and governance. In light of the IT Policies review, according to Gartner. According to researchers of holds true not only for the developed western a few gaps were identified in the policy frame- University of Oxford, on average, 35% of jobs are economies but also for the developing regional work that will be covered ahead. at risk of automation over the next two decades. economies of South Asia. In Pakistani geo- Hence there's a compelling need to make a political context, in addition to the policy, proce- Background proactive human resource strategy keeping in dural, regulatory and industry-related issues, impact how much of the social and economic view the global emerging trends. In context of Ÿ Due to the economic and social significance, there are some vital strategic issues of national development potential of ICT can be capital- these trends, more than 22 nations around the ICT is increasingly the focus globally of significance with long term implications and ized on. world have already formulated a National AI national security connotations. national policy to chart directions for ICT Strategy. Within our region, both UAE and India development and develop a place for the Ÿ With or without an effective IT or ICT policy; have already announced respective National AI 1. National IT Policy local industry in the global production technology and services will evolve on a Strategies. It is imperative for Pakistan to actively system. national and global level. A focused and work towards launching a long-term National AI National IT Policies from 2000 to 2018 were overarching policy will create an enabling Strategy and Initiative. Different aspects of discussed at length during this exercise. The Ÿ ICT, or lack of, impacts all aspects of public environment, allow harmonizing ICT direction Artificial Intelligence Policy include: academic Government has undertaken a productive sector, private sector and communities. The across sectors, and ensure local industries are research, imparting skill and education, talent exercise in identifying key areas of concern and barriers to cost, access and capacity, along a part of and can take advantage of main- development, standards and regulations, data spelled out a policy document to share its vision. with technical and policy infrastructure will stream global developments and new technol- and digital governance, etc. ogies to remain or become globally competitive. Background

National Policy Consideration Ÿ Today, we as human species stand at the cusp of transitioning in era of the Augmented Ÿ There is a lack of focus on laying down age from the Information age. Economic coherent strategies on AI, Cyberspace & Prosperity, Social Empowerment and Quality Infrastructure Sovereignty. of Life are all interconnected and increasingly Ÿ There are discrepancies in Policy Ownership enabled via the disruptive ecosystem of AI. and Governance. Key driver in embracing disruptive technologies without getting disrupted lies in the A concrete roadmap for implementation needs to culture of Innovation. According to WIPO, be charted out, with strategies defined in continua- Pakistan ranked 107 out of 131 on the scale tion of policy specification. of Global Innovation Index in 2020. There is a dire need to promote culture of impactful 2. National AI Strategy innovation and brainstorm a roadmap in embracing Artificial Intelligence for Public Disruptive technologies are redefining the relationship between governance, prosperity and Policy and Private Industries. There are

25 26 Issues of National Significance humanity. The eco-system of Artificial Intelligence is considered the most strategic and disruptive technology of the 21st century. Andrew Ng, Co- General Government's declared vision 'to become a Founder Coursera and formerly Chief Scientist at strategic enabler for an accelerated digitization Baidu and Google Brain, compares 'the We now live in an age where ICT has become ecosystem to expand the knowledge-based transformational impact of AI to that of electricity the key driver for progression of any nation. economy and spur economic growth' served as 100 years back'. Artificial Intelligence could Investment, development and fostering of the the underlying objective of the whole exercise. contribute up to $15.7 trillion to the global econ- ICT sector is proportionally linked to Inno- However, there are challenges such as discrep- omy by 2030, according to PWC. AI will eliminate vational, developmental, GDP and HDI indica- ancies in policy ownership, its implementation 1.8 million jobs but create 2.3 million by 2020, tors of progressing economies. This relationship and governance. In light of the IT Policies review, according to Gartner. According to researchers of holds true not only for the developed western a few gaps were identified in the policy frame- University of Oxford, on average, 35% of jobs are economies but also for the developing regional work that will be covered ahead. at risk of automation over the next two decades. economies of South Asia. In Pakistani geo- Hence there's a compelling need to make a political context, in addition to the policy, proce- Background proactive human resource strategy keeping in dural, regulatory and industry-related issues, impact how much of the social and economic view the global emerging trends. In context of Ÿ Due to the economic and social significance, there are some vital strategic issues of national development potential of ICT can be capital- these trends, more than 22 nations around the ICT is increasingly the focus globally of significance with long term implications and ized on. world have already formulated a National AI national security connotations. national policy to chart directions for ICT Strategy. Within our region, both UAE and India development and develop a place for the Ÿ With or without an effective IT or ICT policy; have already announced respective National AI 1. National IT Policy local industry in the global production technology and services will evolve on a Strategies. It is imperative for Pakistan to actively system. national and global level. A focused and work towards launching a long-term National AI National IT Policies from 2000 to 2018 were overarching policy will create an enabling Strategy and Initiative. Different aspects of discussed at length during this exercise. The Ÿ ICT, or lack of, impacts all aspects of public environment, allow harmonizing ICT direction Artificial Intelligence Policy include: academic Government has undertaken a productive sector, private sector and communities. The across sectors, and ensure local industries are research, imparting skill and education, talent exercise in identifying key areas of concern and barriers to cost, access and capacity, along a part of and can take advantage of main- development, standards and regulations, data spelled out a policy document to share its vision. with technical and policy infrastructure will stream global developments and new technol- and digital governance, etc. ogies to remain or become globally competitive. Background

25 26 National Policy Consideration National Policy Consideration

Ÿ Articulate Pakistan's robust National AI Ÿ At a policy level, we need to consider Strategy. Pakistan's position with respect to cyberspace sovereignty. Our policy position Ÿ Actively promote a vision for AI-led knowl- has to be informed by our specific geopolitical edge economy, innovation and inclusion. constraints, which include a complex mixture maintaining the political system's integrity, Ÿ Advance academic and applied knowledge assuring national security and sovereignty, of disruptive technologies for a vision of facilitating economic development and digitally thriving Pakistan. balancing the regional pressures arising out Ÿ Utilize Emerging Technologies such as of various global powers' geopolitical Artificial Intelligence, Big Data, Blockchain projections in and around South Asia. and IoT in full spectrum of governance, Issues arising out of cyberspace deeply internal and external security. impact the fragile balance of our national harmony, for example influence operations some countries as a way of managing cyber multiple high volume, high impact use cases Ÿ Build a sustainable supply of quality human carried out by hostile elements aiming for threats and mass demonstrations. for AI adoption; from traffic congestion to resources trained on the Emerging Tech- ideological subversion and subjugation, cancer detection. nologies. Ÿ China continues to push its narrative that controversial content (blasphemy videos) published through foreign-origin and foreign- Ÿ With AI ecosystem at the forefront of our 3. National Cyberspace Sovereignty countries need to exert sovereignty over based service providers and sectarian rift everyday lives, data-driven governance the internet within their borders and that it created through social media platforms, etc. services are now possible for all the organs of In the content of Internet governance, cyber- is the responsibility of all nations to space sovereignty describes governments' executive, legislative and judicial branches. develop, use and govern the internet respon- Ÿ States can regulate cyberspace issues desire to exercise control over the Internet This will not only increase efficiency of sibly. Russia also favors a cyber-sovereign falling within their jurisdiction by applica- within their own borders, including political, services, but counter corruption with inherent point of view with respect to its cyberspace tion of domestic laws. However, application economic, cultural and technological activities; transparency and accountability. How public governance. of such laws is practically difficult when that is, to extend the concept of sovereignty to policy and businesses engage with embrac- content providers are not incorporated include all aspects of the Internet. Cyberspace Ÿ Western nations have long advocated for ing and adopting AI practices will determine within the country's jurisdiction or the used to be merely a medium of exchanging an internet that is both global and open, in the future of Digital Pakistan. content is not hosted in datacenters that information and communication. However, the which the state elements exert minimal are situated within the country's jurisdic- Ÿ While Emerging and disruptive digital value of data residing in cyber-space, the control over the traffic passing through its tion i.e. from the state's point of view, technologies continue to converge, the significance of information being exchanged and borders. With strong economic foundations, the content and service providers are rapidly evolving landscape of AI and its threats from cyberspace effecting physical and low unemployment, state welfare and settled operating locally but are based over- impact for economic transformation is economic securities of nations has prompted a political ideologies, populations of developed seas. The only solutions to this conun- inadequately understood. How we choose to number of developed and developing countries nations are less prone to the warfare of drum (other than outright blocking the utilize AI across public policy and gover- to rethink the control and sovereignty dimen- narratives, and thus the threat of effective c o n t e n t / s e r v i c e p r o v i d e r f r o m t h e nance, industries and educational institutes sions of cyberspace. influence operations by adversaries are state's jurisdiction) are to either require and throughout society will impact how reduced. Conversely, it is in the interest of the content/service provider to localize Pakistan progresses as a Nation. It is, Background developing economies to enforce cyber their data centers, or require them to therefore, pertinent to understand and Ÿ Key global powers have different views – sovereignty. conform to the state's control / filter- engage substantially with Artificial Inte- projected and enforced – about cyber ing/compliance. Both of these options lligence to shape an inclusive, prosperous sovereignty. China has championed the Ÿ For Pakistan, it is difficult to apply domes- require incentive and facilitation for the and a thriving future for Pakistan. A National idea of cyber sovereignty, and while the tic laws to assert cyber sovereignty content/service provider e.g. having a AI Strategy can aid in promoting a culture of U.S. and its allies have long opposed this because most of the popular services and market that is sufficiently lucrative to impactful innovation and improve Pakistan's concept, it has become more attractive to content are not hosted in our jurisdiction. make financial sense to adopt either of innovation competitiveness.

27 28 National Policy Consideration National Policy Consideration

27 28 inbound/outbound data traffic of Pakistan policy of storage and processing of cus- measurements. In absence of data, the may travel through other countries and may tomer information and other sensitive researchers gap-fit the data or default to no be susceptible to interception attempts. information on infrastructure hosted points. The result of which is that Pakistan internationally. Data is the most valuable performs poorly across such indicators. Ÿ Foreign country entities, though friendly, commodity in the information age, and have been allowed to lay their own fiber optic preservation of sovereignty and integrity of Ÿ More significantly, in absence of data network cables that run across Pakistan. It is data should be a national policy objective. means that effective evidence-based expected that such cables will remain solely Pakistan has the size and scale to make local decision making cannot be done within the owned by foreign entities and remain storage and processing of data a viable Government to improve the sector-wise proprietary with respect to data that is economic option. It should be encouraged (or performance and KPIs. communicated over these fiber optic links. rather mandated) to store and process all sensitive information (relating to critical National Policy Consideration Ÿ There is a lack of standardization and policy sectors like banking, telecommunication, enactment to ensure the sovereignty of Ÿ The government must actively pursue the healthcare, education, manufacturing, information and customer data, and to goal of improving Pakistan's standing services, etc.) within the geographical and ensure that sensitive information and across all indicators annually. Not only jurisdictional boundaries of Pakistan. the options. personal data of Pakistan stays within the these indicators are important for the soft geographical and jurisdictional boundaries of image of the country, but are also used as a Ÿ Falling short of outright censorship of foreign- 5. National Developmental Indicators Pakistan. critical decision-making factor by foreign based content and service providers – which As is evident throughout this report, the investors before investing in a country. is an unsustainable solution in the long term – National Policy Consideration metrics and data on the various facets of IT Pakistan must develop ICT sector to an industry and ecosystem – from a wide variety Ÿ A number of indicators are based on data extent that it becomes a technically feasible Ÿ We need to consider the threat of utilizing of references and sources – paint a poor that cannot be provided by a single ministry and financially lucrative market for all major international IP traffic cables in which there picture. The state of affairs doesn't improve or department. In fact, most indicators are content/service providers to host localized are either ownership stakes of hostile country even when we widen our lens and review other measured based on data that falls in the content. A primary pre-requisite for this entities or such entities have been awarded sectors/pillars in terms of developmental remit of a number of ministries. The govern- scenario to realize is establishment of large- contracts for operational management of the indicators. ment must ensure that data of national scale Tier 4 datacenters across Pakistan. submarine cables. We need to consider what indicators is being monitored, measured and long terms alternatives we can develop for Background 4.Communication Infrastructure gaining independence from such arrange- recorded with provenance by all relevant Sovereignty ments that have the potential to impact Ÿ Various international bodies publish sector- ministries and departments. Local ICT national security. In addition, the preferred wise annual reports covering cross- industry can be utilized for development of Network and data sovereignty are the efforts of a method of deploying international links is spectrum performance of countries across tools and provision of services to fulfill this state to create boundaries on a network and through submarine optic fiber system. Any a large number of indicators. Generally, requirement. sensitive data and then exert a form of control international fiber optic links that traverses such measurements are partitioned into (law enforcement, ownership, etc.) over such Ÿ Each developmental indicator that is through other territories is susceptible to pillars (e.g. Markets, Human Capital, etc.), boundaries. Communication Infrastructure interception and should be considered with each of which have a certain number of important to the development of Pakistan's Sovereignty can thus be defined as exerting caution. indicators (e.g. Skills, Health, Market Size, growth in general and that of ICT sector in control over the communication infrastructure as etc.). particular should be assigned to a Ministry, well as sensitive data of the said network e.g. Ÿ At a policy level, we need to reconsider which will then be held accountable for fiber optic cables, copper lines, wireless links, allowing foreign entities to lay, and operate Ÿ In addition to the on-ground realities and Pakistan's performance on that indicator. international cloud, etc. their own fiber optic cable infrastructure in true state of these indicators with respect to Pakistan in order to minimize the threat Pakistan, one of the major factors that Ÿ Ministry of Information Technology and Background space with respect to communication influence our standing in these indicators is Telecommunication should be made in- infrastructure sovereignty. the lack of factual and recent data that is charge of driving the government's machin- Ÿ There are plans to bring terrestrial interna- available to undertake the indicators' ery towards the ultimate goal of improving tional cables to Pakistan where the Ÿ Currently, there is a lack of clarity on the

29 30 inbound/outbound data traffic of Pakistan policy of storage and processing of cus- measurements. In absence of data, the may travel through other countries and may tomer information and other sensitive researchers gap-fit the data or default to no be susceptible to interception attempts. information on infrastructure hosted points. The result of which is that Pakistan internationally. Data is the most valuable performs poorly across such indicators. Ÿ Foreign country entities, though friendly, commodity in the information age, and have been allowed to lay their own fiber optic preservation of sovereignty and integrity of Ÿ More significantly, in absence of data network cables that run across Pakistan. It is data should be a national policy objective. means that effective evidence-based expected that such cables will remain solely Pakistan has the size and scale to make local decision making cannot be done within the owned by foreign entities and remain storage and processing of data a viable Government to improve the sector-wise proprietary with respect to data that is economic option. It should be encouraged (or performance and KPIs. communicated over these fiber optic links. rather mandated) to store and process all sensitive information (relating to critical National Policy Consideration Ÿ There is a lack of standardization and policy sectors like banking, telecommunication, enactment to ensure the sovereignty of Ÿ The government must actively pursue the healthcare, education, manufacturing, information and customer data, and to goal of improving Pakistan's standing services, etc.) within the geographical and ensure that sensitive information and across all indicators annually. Not only jurisdictional boundaries of Pakistan. the options. personal data of Pakistan stays within the these indicators are important for the soft geographical and jurisdictional boundaries of image of the country, but are also used as a Ÿ Falling short of outright censorship of foreign- 5. National Developmental Indicators Pakistan. critical decision-making factor by foreign based content and service providers – which As is evident throughout this report, the investors before investing in a country. is an unsustainable solution in the long term – National Policy Consideration metrics and data on the various facets of IT Pakistan must develop ICT sector to an industry and ecosystem – from a wide variety Ÿ A number of indicators are based on data extent that it becomes a technically feasible Ÿ We need to consider the threat of utilizing of references and sources – paint a poor that cannot be provided by a single ministry and financially lucrative market for all major international IP traffic cables in which there picture. The state of affairs doesn't improve or department. In fact, most indicators are content/service providers to host localized are either ownership stakes of hostile country even when we widen our lens and review other measured based on data that falls in the content. A primary pre-requisite for this entities or such entities have been awarded sectors/pillars in terms of developmental remit of a number of ministries. The govern- scenario to realize is establishment of large- contracts for operational management of the indicators. ment must ensure that data of national scale Tier 4 datacenters across Pakistan. submarine cables. We need to consider what indicators is being monitored, measured and long terms alternatives we can develop for Background 4.Communication Infrastructure gaining independence from such arrange- recorded with provenance by all relevant Sovereignty ments that have the potential to impact Ÿ Various international bodies publish sector- ministries and departments. Local ICT national security. In addition, the preferred wise annual reports covering cross- industry can be utilized for development of Network and data sovereignty are the efforts of a method of deploying international links is spectrum performance of countries across tools and provision of services to fulfill this state to create boundaries on a network and through submarine optic fiber system. Any a large number of indicators. Generally, requirement. sensitive data and then exert a form of control international fiber optic links that traverses such measurements are partitioned into (law enforcement, ownership, etc.) over such Ÿ Each developmental indicator that is through other territories is susceptible to pillars (e.g. Markets, Human Capital, etc.), boundaries. Communication Infrastructure interception and should be considered with each of which have a certain number of important to the development of Pakistan's Sovereignty can thus be defined as exerting caution. indicators (e.g. Skills, Health, Market Size, growth in general and that of ICT sector in control over the communication infrastructure as etc.). particular should be assigned to a Ministry, well as sensitive data of the said network e.g. Ÿ At a policy level, we need to reconsider which will then be held accountable for fiber optic cables, copper lines, wireless links, allowing foreign entities to lay, and operate Ÿ In addition to the on-ground realities and Pakistan's performance on that indicator. international cloud, etc. their own fiber optic cable infrastructure in true state of these indicators with respect to Pakistan in order to minimize the threat Pakistan, one of the major factors that Ÿ Ministry of Information Technology and Background space with respect to communication influence our standing in these indicators is Telecommunication should be made in- infrastructure sovereignty. the lack of factual and recent data that is charge of driving the government's machin- Ÿ There are plans to bring terrestrial interna- available to undertake the indicators' ery towards the ultimate goal of improving tional cables to Pakistan where the Ÿ Currently, there is a lack of clarity on the

29 30 Pakistan's performance on the indicators as and decision making is done without data or on mapped but also constantly monitored to Ÿ Making utilization of geospatial data manda- much as possible. the basis of invalid data e.g. brand-new roads record and update the ever-changing tory and ubiquitous in all aspects of gover- are dug up and remade while remote areas landscape. Failure to do so has led us down nance is critical towards reducing corruption, remain cut off, river banks disappear and the path of gross misallocation of resources increasing transparency and introducing resulting in a country that is squandering its efficiency in the workings of government. 6. National Spatial Data Repository and habitats are destroyed while environmental potential in many sectors. Unfortunately, Pakistan does not have a Utilization agencies pour money into conservation. Agricultural land is converted into housing vibrant and competitive geospatial industry, Ÿ There have been many attempts in the past In the world of governance there are two parallel schemes while the country faces food insecurity, with the majority control and experience in to mitigate this problem and make available the geospatial sector lying with one state realities, i.e. what exists in the real world and etc: - what is on file. Regimes that minimize the better data in government to improve entity. difference between these two realities are Significance of Geospatial Data decision making. Solutions planned and Ÿ Allow private sector to work freely in the efficient, successful and effective. Those that implemented in silos are as vulnerable to Ÿ acquisition, production and utilization of cannot, end up being inefficient, inept and not in At its heart, a government is a matter of abuse as the paper systems they replace. geospatial imagery without threat of compro- control of the complete state of affairs, which geography, and governance is an optimiza- The only way to effectively mitigate the mising national security. Our regional allows space for corruption and manipulation. tion problem. Cities, provinces, and districts distortion in information is to make adversaries have raced ahead through the Eventually data corruption causes not only all have borders and within these borders are Geospatial data ubiquitous in all facets of the effective combination of the private sector financial damage but also greatly enhances layers upon layers of infrastructure, government. Not only does Pakistan need to expertise and government funding to develop human suffering and even loss of life. resources and population clusters. Not only monitor our landmass but also permanently a wide array of indigenous geospatial Generational damage is caused when planning do these layers need to be accurately store this data for future accountability. technologies, all led by private enterprise. In Ÿ Governments around the world have found contrast, we have to rely on foreign services that Geospatial Data is a critical tool in and companies for our most basic geospatial resource management, regional planning, data and service needs. and economic development. When inte- Ÿ In order to bridge this divide, Pakistan needs grated with demographic, economic, social to formulate a Geospatial policy. In the short and cyber data; Geospatial data becomes run we will need to incorporate existing the invaluable core of effective decision technologies in government decision making making. The applications for Geospatial and make their use mandatory in all aspects Technologies stretch across almost every of government. In the long run Pakistan aspect of public administration. needs to grow an independent and robust Ÿ Governments across the globe rely on geospatial industry whereby we have strong geospatial technology to improve operations local players that can provide us the tools to and services to citizens, track and evaluate be self-reliant in all kinds of geospatial activities to meet mandates and support technologies. Failure to do so will be a threat initiatives and perform analyses that lead to to our national security, indigenous capability better decision making e.g. in e-Governance, and cyber sovereignty. infrastructure monitoring, urban and regional 7. Role of the National Telecom Career in the planning, agriculture, irrigation, climate Nation's Digital Agenda change monitoring, revenue collection and assurance, economic planning, defense, Economy is the backbone upon which every disaster management, energy security and society prospers. During the industrial age, law enforcement, etc. production and consumption of physical goods and services were the key drivers of economic National Policy Consideration

31 32 Pakistan's performance on the indicators as and decision making is done without data or on mapped but also constantly monitored to Ÿ Making utilization of geospatial data manda- much as possible. the basis of invalid data e.g. brand-new roads record and update the ever-changing tory and ubiquitous in all aspects of gover- are dug up and remade while remote areas landscape. Failure to do so has led us down nance is critical towards reducing corruption, remain cut off, river banks disappear and the path of gross misallocation of resources increasing transparency and introducing resulting in a country that is squandering its efficiency in the workings of government. 6. National Spatial Data Repository and habitats are destroyed while environmental potential in many sectors. Unfortunately, Pakistan does not have a Utilization agencies pour money into conservation. Agricultural land is converted into housing vibrant and competitive geospatial industry, Ÿ There have been many attempts in the past In the world of governance there are two parallel schemes while the country faces food insecurity, with the majority control and experience in to mitigate this problem and make available the geospatial sector lying with one state realities, i.e. what exists in the real world and etc: - what is on file. Regimes that minimize the better data in government to improve entity. difference between these two realities are Significance of Geospatial Data decision making. Solutions planned and Ÿ Allow private sector to work freely in the efficient, successful and effective. Those that implemented in silos are as vulnerable to Ÿ acquisition, production and utilization of cannot, end up being inefficient, inept and not in At its heart, a government is a matter of abuse as the paper systems they replace. geospatial imagery without threat of compro- control of the complete state of affairs, which geography, and governance is an optimiza- The only way to effectively mitigate the mising national security. Our regional allows space for corruption and manipulation. tion problem. Cities, provinces, and districts distortion in information is to make adversaries have raced ahead through the Eventually data corruption causes not only all have borders and within these borders are Geospatial data ubiquitous in all facets of the effective combination of the private sector financial damage but also greatly enhances layers upon layers of infrastructure, government. Not only does Pakistan need to expertise and government funding to develop human suffering and even loss of life. resources and population clusters. Not only monitor our landmass but also permanently a wide array of indigenous geospatial Generational damage is caused when planning do these layers need to be accurately store this data for future accountability. technologies, all led by private enterprise. In Ÿ Governments around the world have found contrast, we have to rely on foreign services that Geospatial Data is a critical tool in and companies for our most basic geospatial resource management, regional planning, data and service needs. and economic development. When inte- Ÿ In order to bridge this divide, Pakistan needs grated with demographic, economic, social to formulate a Geospatial policy. In the short and cyber data; Geospatial data becomes run we will need to incorporate existing the invaluable core of effective decision technologies in government decision making making. The applications for Geospatial and make their use mandatory in all aspects Technologies stretch across almost every of government. In the long run Pakistan aspect of public administration. needs to grow an independent and robust Ÿ Governments across the globe rely on geospatial industry whereby we have strong geospatial technology to improve operations local players that can provide us the tools to and services to citizens, track and evaluate be self-reliant in all kinds of geospatial activities to meet mandates and support technologies. Failure to do so will be a threat initiatives and perform analyses that lead to to our national security, indigenous capability better decision making e.g. in e-Governance, and cyber sovereignty. infrastructure monitoring, urban and regional 7. Role of the National Telecom Career in the planning, agriculture, irrigation, climate Nation's Digital Agenda change monitoring, revenue collection and assurance, economic planning, defense, Economy is the backbone upon which every disaster management, energy security and society prospers. During the industrial age, law enforcement, etc. production and consumption of physical goods and services were the key drivers of economic National Policy Consideration

31 32 refusal rights in certain sectors. The purpose of Pakistan Customs, etc. Portal in this light is a case in point, further similar such arrangements is not only sovereignty initiatives are required to improve the quality of Ÿ related, but also for ensuring the protection of As the national carrier of Pakistan, numerous life for citizens of Pakistan, while integrating the state assets (copper wires, fiber links, switches, PTCL exchanges across, Pakistan built emerging tools such as AI, Machine Learning, exchanges, etc.) and the information they carry, between 1970 and 2000, were constructed IoT in a holistic policy framework. There is a dire which are of critical significance in both peace as strategic communications hub and were need to shift from a responsive to proactive and war times. Any future conflict between designed to withstand hostile actions (like anticipation of governance related matters. adversaries will have significant component of grid failure). Technology has enabled governments around cyber warfare, therefore the security and the world to serve their citizenry and improve National Policy Consideration resilience of national ICT infrastructure is provision of services. Pakistan's Citizen Portal in entrusted to the national carrier PTCL. Ÿ As the majority shareholder, the Government this light is a case in point, further similar must strategize to realize the potential of initiatives are required to improve the quality of Background PTCL's commercial growth. life for citizens of Pakistan, while integrating the emerging tools such as AI, Machine Learning, Ÿ Pakistan's national telecom career PTCL is Ÿ The government should take ownership of IoT in a holistic policy framework. owned 62% by the state, 26% by Etisalat the planning of PTCL while allowing the (UAE) and 12% by the general public. minority shareholders to manage PTCL's Background activity. However, as the world is transitioning Ÿ PTCL currently has 4 international digital consumer-side product and services from industrial age to information age (4th Ÿ Anticipatory Governance (AG) offers a communication links via submarine cables, portfolio. industrial revolution), trading of physical goods systematic way to manage the challenges connecting Pakistan to Europe, USA, Middle and services is being increasingly supplanted by Ÿ PTCL personnel in strategic positions should that are complex in nature and helps in East and Far East Asia. electronic commerce, where the trade is being be vetted through the security clearance strategic decision-making, strategic management and, crucial policy coherence. conducted via bits and bytes. Strategic Lines of Ÿ PTCL has the largest fiber optic infrastructure process by relevant agencies, in order to Communications (SLOC), which were the safeguard the nation's digital assets and across Pakistan, and connects the country to Ÿ The idea that policymaking, and its subse- lifeline of any traditional national economy, are cyberspace sovereignty. India, Afghanistan, Iran and China (through quently developed solutions and models, now being replaced with Strategic Lines of digital partnership with SCO) over these links. Ÿ should be data-driven is called foresight. Communication (SLOdC). SLOdC are typically The spare capacity and space at the Ÿ Command and Control specification PTCL undertaken to include national and cross-border PTCL also operates the nation's largest Ÿ Foresight research is increasingly becoming exchanges can be utilized for building fiber connectivity, undersea cables for voice and satellite ground/earth stations (Islamabad ever more ingrained in the mind of indigenous Tier-3 and Tier-4 level data, datacenters, and an operational frame- and Multan), comprising of large aperture policymakers around the world. Many work that brings it all together. Ownership, dishes. datacenters. This will not only save on advancement and protections of the SLOdC are infrastructure costs but provide colocation as important as SLOC for any nation, and the Ÿ PTCL is the dominant communication facilities with existing fiber optic networks. In national carrier plays the primary role in this provider to banks, telecom operators, order to contain unnecessary strain on the regard. manufacturing companies, federal and budget, all government and semi- provincial governments, and the armed government departments should be encour- Designating and maintaining a national telecom forces (apart from their own connectivity aged to use the existing building facilities of carrier is a common mechanism across a infrastructure). PTCL rather than committing scarce financial number of developed and developing countries resources on constructing new buildings. for ensuring telecommunications and informa- Ÿ PTCL is the largest Cloud services provider in tion sovereignty. National carriers are entrusted Pakistan, providing cloud computing ser- 8. Anticipatory Governance and Foresight with a strategic role within the national informa- vices to both the public and private sector. There is a dire need to shift from a responsive to tion and communications technology (ICT) Ÿ PTCL provides secure communication and proactive anticipation of governance related fabric. As activities and investments of a national interconnection facilities to various national matters. Technology has enabled governments carrier are sometimes driven by strategic level strategic organizations including Civil around the world to serve their citizenry and national objectives rather than pure commer- Aviation Authority, State Bank of Pakistan, improve provision of services. Pakistan's Citizen cials, they are often the primary choice or have

33 34 refusal rights in certain sectors. The purpose of Pakistan Customs, etc. Portal in this light is a case in point, further similar such arrangements is not only sovereignty initiatives are required to improve the quality of Ÿ related, but also for ensuring the protection of As the national carrier of Pakistan, numerous life for citizens of Pakistan, while integrating the state assets (copper wires, fiber links, switches, PTCL exchanges across, Pakistan built emerging tools such as AI, Machine Learning, exchanges, etc.) and the information they carry, between 1970 and 2000, were constructed IoT in a holistic policy framework. There is a dire which are of critical significance in both peace as strategic communications hub and were need to shift from a responsive to proactive and war times. Any future conflict between designed to withstand hostile actions (like anticipation of governance related matters. adversaries will have significant component of grid failure). Technology has enabled governments around cyber warfare, therefore the security and the world to serve their citizenry and improve National Policy Consideration resilience of national ICT infrastructure is provision of services. Pakistan's Citizen Portal in entrusted to the national carrier PTCL. Ÿ As the majority shareholder, the Government this light is a case in point, further similar must strategize to realize the potential of initiatives are required to improve the quality of Background PTCL's commercial growth. life for citizens of Pakistan, while integrating the emerging tools such as AI, Machine Learning, Ÿ Pakistan's national telecom career PTCL is Ÿ The government should take ownership of IoT in a holistic policy framework. owned 62% by the state, 26% by Etisalat the planning of PTCL while allowing the (UAE) and 12% by the general public. minority shareholders to manage PTCL's Background activity. However, as the world is transitioning Ÿ PTCL currently has 4 international digital consumer-side product and services from industrial age to information age (4th Ÿ Anticipatory Governance (AG) offers a communication links via submarine cables, portfolio. industrial revolution), trading of physical goods systematic way to manage the challenges connecting Pakistan to Europe, USA, Middle and services is being increasingly supplanted by Ÿ PTCL personnel in strategic positions should that are complex in nature and helps in East and Far East Asia. electronic commerce, where the trade is being be vetted through the security clearance strategic decision-making, strategic management and, crucial policy coherence. conducted via bits and bytes. Strategic Lines of Ÿ PTCL has the largest fiber optic infrastructure process by relevant agencies, in order to Communications (SLOC), which were the safeguard the nation's digital assets and across Pakistan, and connects the country to Ÿ The idea that policymaking, and its subse- lifeline of any traditional national economy, are cyberspace sovereignty. India, Afghanistan, Iran and China (through quently developed solutions and models, now being replaced with Strategic Lines of digital partnership with SCO) over these links. Ÿ should be data-driven is called foresight. Communication (SLOdC). SLOdC are typically The spare capacity and space at the Ÿ Command and Control specification PTCL undertaken to include national and cross-border PTCL also operates the nation's largest Ÿ Foresight research is increasingly becoming exchanges can be utilized for building fiber connectivity, undersea cables for voice and satellite ground/earth stations (Islamabad ever more ingrained in the mind of indigenous Tier-3 and Tier-4 level data, datacenters, and an operational frame- and Multan), comprising of large aperture policymakers around the world. Many work that brings it all together. Ownership, dishes. datacenters. This will not only save on advancement and protections of the SLOdC are infrastructure costs but provide colocation as important as SLOC for any nation, and the Ÿ PTCL is the dominant communication facilities with existing fiber optic networks. In national carrier plays the primary role in this provider to banks, telecom operators, order to contain unnecessary strain on the regard. manufacturing companies, federal and budget, all government and semi- provincial governments, and the armed government departments should be encour- Designating and maintaining a national telecom forces (apart from their own connectivity aged to use the existing building facilities of carrier is a common mechanism across a infrastructure). PTCL rather than committing scarce financial number of developed and developing countries resources on constructing new buildings. for ensuring telecommunications and informa- Ÿ PTCL is the largest Cloud services provider in tion sovereignty. National carriers are entrusted Pakistan, providing cloud computing ser- 8. Anticipatory Governance and Foresight with a strategic role within the national informa- vices to both the public and private sector. There is a dire need to shift from a responsive to tion and communications technology (ICT) Ÿ PTCL provides secure communication and proactive anticipation of governance related fabric. As activities and investments of a national interconnection facilities to various national matters. Technology has enabled governments carrier are sometimes driven by strategic level strategic organizations including Civil around the world to serve their citizenry and national objectives rather than pure commer- Aviation Authority, State Bank of Pakistan, improve provision of services. Pakistan's Citizen cials, they are often the primary choice or have

33 34 governments have dedicated foresight open data platform to utilize as tools in provides a platform where stakeholders can Intelligence tools to discover patterns and teams in conventional planning divisions or undertaking anticipatory government develop informed opinions and share correlations, provides insights and even in strategy units at prime minister or practices. AG platform enhances the future insights about long-term developments, and causations, and aids in decision making president offices, which prepare researched thinking by gathering knowledge of experts in thus aids decision makers to focus thinking towards assessing alternate futures; a reports on emerging trends and give policy a systematic way, based on factual, multidi- towards areas that need attention and comprehensive recipe for effective decision recommendations. mensional and indicators related data. undertake the evidence-based decision making and impactful outcomes. making. Ÿ Government of Pakistan should work Ÿ Anticipatory Governance and utilization of Ÿ The Government should mandate strategic towards enablement of its constituent Ÿ the foresight technique are now an integrated Government of Pakistan should pilot the think tanks and relevant planning minis- ministries, departments and bodies to function in various governments across the adoption of indigenous tools developed tries / departments to pilot the application make informed decisions, starting with for the application and utilization of globe including Australia, Canada, China, of AG / foresight techniques in focal development and implementation of foresight / AG techniques, which pro- Finland, France, Germany, India, Japan, sectors, gathering knowledge of experts policy interventions based on this report. vides access to socially organized Netherlands, Japan, UK and the US. in a systematic way, based on factual, Utilization of foresight methodology will research using methodologies such as multidimensional, indicators related National Policy Consideration aid greatly in this endeavor, as it takes forecasting, Delphi surveys, State of data, and feeding the output back to into account perceptions about how Future Index (SOFI) modeling, Trend Ÿ Government of Pakistan should adopt anti- decision makers for effective policy future events may change business-as- Impact Analysis (TIA) modeling, etc. AG cipatory governance practices and actively development. usual scenarios. It provides data, correla- platform also provides predictive algo- promote digitization, data recording and tions and analyses based on indicators; rithms and machine learning using Artificial

35 36 governments have dedicated foresight open data platform to utilize as tools in provides a platform where stakeholders can Intelligence tools to discover patterns and teams in conventional planning divisions or undertaking anticipatory government develop informed opinions and share correlations, provides insights and even in strategy units at prime minister or practices. AG platform enhances the future insights about long-term developments, and causations, and aids in decision making president offices, which prepare researched thinking by gathering knowledge of experts in thus aids decision makers to focus thinking towards assessing alternate futures; a reports on emerging trends and give policy a systematic way, based on factual, multidi- towards areas that need attention and comprehensive recipe for effective decision recommendations. mensional and indicators related data. undertake the evidence-based decision making and impactful outcomes. making. Ÿ Government of Pakistan should work Ÿ Anticipatory Governance and utilization of Ÿ The Government should mandate strategic towards enablement of its constituent Ÿ the foresight technique are now an integrated Government of Pakistan should pilot the think tanks and relevant planning minis- ministries, departments and bodies to function in various governments across the adoption of indigenous tools developed tries / departments to pilot the application make informed decisions, starting with for the application and utilization of globe including Australia, Canada, China, of AG / foresight techniques in focal development and implementation of foresight / AG techniques, which pro- Finland, France, Germany, India, Japan, sectors, gathering knowledge of experts policy interventions based on this report. vides access to socially organized Netherlands, Japan, UK and the US. in a systematic way, based on factual, Utilization of foresight methodology will research using methodologies such as multidimensional, indicators related National Policy Consideration aid greatly in this endeavor, as it takes forecasting, Delphi surveys, State of data, and feeding the output back to into account perceptions about how Future Index (SOFI) modeling, Trend Ÿ Government of Pakistan should adopt anti- decision makers for effective policy future events may change business-as- Impact Analysis (TIA) modeling, etc. AG cipatory governance practices and actively development. usual scenarios. It provides data, correla- platform also provides predictive algo- promote digitization, data recording and tions and analyses based on indicators; rithms and machine learning using Artificial

35 36 NATIONAL PART ICT HUMAN RESOURCE AND INFRASTRUCTURE LANDSCAPE III NATIONAL PART ICT HUMAN RESOURCE AND INFRASTRUCTURE LANDSCAPE III National ICT Human Resource and Infrastructure Landscape

1. Human Resource Development as the ICT. The challenges to the HR development in the ICT sector have been listed General below: -

Ÿ Lack of Investment in Innovation In Pakistan, Human Resource Development is Focused Research and Development influenced by lack of funds and qualified staff. The government of Pakistan allocates a Ÿ Unregulated Educational/Training relatively small amount of budget for Human Institutes Resource Development activities. According to Ÿ Lack of Industry, Academia and UNDP, Pakistan's ranking on the Human Government Partnership Development Index (HDI) in 2019 was at 152nd Ÿ position out of the total 189 countries, and it Training of Teachers stands 13% below the average HDI of South Ÿ Lack of Knowledge Asia including Bangladesh and India. Low GDP R&D (in comparison, India spends 0.8%) and domination of lower-value chain freelancers growth, high population growth, high level of a. Lack of Investment in Innovation Focused has a meager 166 researchers per million i.e. earners of up to $10/hr. It is imperative to poverty, low per capita income, low literacy rate Research and Development. inhabitants. In addition to this, gross domestic understand the cycle of value-chain involved and unemployment has compounded the expenditure on R&D (GERD) has decreased in producing ICT resources, and a clear problems in this regard. Apart from distracted The lack of financial support and investment has from 0.4 (GERD as a % OF GDP) in 2005 to 0.2 roadmap is required to move up the chain. and perplexed policymaking, poor governance been one of the major reasons for the quagmire (GERD as a % of GDP) in 2015 and remained Furthermore, there are structural consider- has remained a key issue and has had a we currently find ourselves in. As stated by the the same in year 2017. The universities depend ations to also take into account i.e. rapid negative impact on social service delivery. This data provided by UNESCO Institute of Statistics on state funding, primarily for R&D. However, increase in higher education influences has a direct impact on the services sector such (UIS), Pakistan spends only 0.3% of its GDP on government funding has proved inadequate to finances and physical resources. The the rising needs of these institutions. number of students in the universities Universities' income and expenditure analysis outweighs the governments funding indicated excess of expenditure over income in capacity. all public universities and there was a building up of deficit between capital income and capital Ÿ A secondary and higher education system expenditure. centralized around passive learning and clogged by rote memorization, coupled with a Challenges complete absence of the promotion of research and independent inquiry culture, Ÿ Human Resource Landscape in Pakistan is inadequate number of research institutes not equipped at present to satisfy the and diminutive investments in research and demand-side of the higher ICT value chain. development sector are some of the reasons We have 64% population under the age of Pakistan still has to prove its mettle in the 30, yet we lag in requisite skillsets to provide international scientific sphere. As per a steady supply of valuable ICT human statistics, the government has earmarked Rs resources. A closer look at our ICT resource 77.262 billion for Education Affairs and mix in outsourcing work establishes Services in the federal budget for 2019-20

39 40 National ICT Human Resource and Infrastructure Landscape

1. Human Resource Development as the ICT. The challenges to the HR development in the ICT sector have been listed General below: -

39 40 against the revised allocation of Rs 97.155 ICT industry; HEC mandated closer industry- billion for the current fiscal year, showing a university linkages, requiring lecturer / decrease of around 20.5%. The government professor secondment to industry for skill has also reduced the budgetary allocation for refresh / industry relevance training; accred- higher education sector. Pakistan's public ited learning (credit hours) for 3-6 months' expenditure on education as a percentage of placements of students in the private sector; GDP is estimated at 2.4% in fiscal year 2018- Talent hunting and identification, followed by 19, which is the lowest in the region. ICT scholarships program (undergraduate). A sufficient portion of annual budget should Recommendations also be allocated to Higher Education Ÿ The National ICT R&D Fund executed a teacher. In its annual Global Education Scholarships and for Research and comprehensive outreach scholarship Monitoring Report (2017) by United Nations Ÿ There should be a national emphasis on Development (R&D). Encouraging R&D program in 2007. This program called E d u c a t i o n a l , S c i e n t i f i c a n d C u l t u r a l improving the quality of human resource activities through accumulation of knowledge National ICT Scholarship Program (NICTSP) Organization (UNESCO), there were as many being produced in ICT sector. A closer and human capital could help put Pakistan's was executed by National ICT R&D Fund and as 80 students per teacher in private schools in Industry-Academia collaboration is required, technology manufacturing sector on the high targeted talented and deserving students Pakistan. These 'alternative educational and under the supervision of government, to growth path by alleviating the competitive from all provinces/regions of the country training providers' mostly do not have much in produce intellectual capital able to satisfy strength of export-oriented industries in through screening and testing. To find best the way of risk assessment and control. The High Value ICT work. Furthermore, sufficient global markets. students having aptitude and interest United Nations Committee on the Rights of the budgetary allocation for education in the towards IT sector, such programs should be Child also recently echoed similar reservations national GDP will contribute to this effort. Ÿ Schools from an early age should inculcate reinvigorated. stating, “The privatization of education in Incentives and facilities of the highest order and develop independent thinking, analytical Pakistan comes with lack of measures to ensure should be provided to scientists and skills and some basic know-how of IT related Ÿ A National Talent Accelerator Program is the compliance of private schools with minimum researchers, as it can help attract young aspects in the students for which the curricu- proposed for improving digital literacy at all educational standards”. students to a career in research. However, at lum should be periodically updated and the educational levels and moving up the value the same time a rigorous qualitative assess- teachers provided with requisite training. chain for developing technology and intellec- Challenges ment regime should also be put in place to tual capital. It is further proposed improve Ÿ assess the R&D output. Research in Creating a fund for R&D in new technologies existing mix of human capital from ICT sector Ÿ There are a significant number of training and futuristic fields such as biotechnology, for start-ups and entrepreneurs to enable by re-skilling and up-skilling. Also, it is educational institutes that are not registered artificial intelligence, robotics and quantum innovation in cutting edge communications, proposed to incentivize closer industry- in the government system and have no computing could help put us on the forefront 5G, software, digital content, cyber security academia coordination for creating a credible regulator or compliance check on of global leaders of scientific community and and related technologies and applications; sustainable pool of human resource trained them. These schools easily manipulate the promote a transfer / exchange of experts and and commercialization of products and on hi-tech technologies. Companies such as curriculum and teaching strategies. There technology between Pakistan and the services through grants, scholarships, Microsoft, VMware, IBM, Amazon and others are also few cases where schools are leading global scientific institutes. venture capital, etc. can be incentivized to invest in training adopting below-standard curriculum or resources and making multiple Global teaching methods and are solely driven by Ÿ Industry relevant ICT skills development Ÿ Promoting design led ICT equipment Service Support Centers in Pakistan. the monetary benefits of running a business programs for undergraduate students across manufacturing in Pakistan by leveraging in a sector that is suffering from minimum Pakistani universities, run in cooperation with indigenous software/ R&D capabilities. b. Unregulated Educational/Training oversight and regulation by the state. Institutes Ÿ The minimum requirements to open a private Pakistan's private sector suffers from a lack of educational or training institute are very low. consistent and forward-thinking regulations, Private institutions offering primary and which seriously impacts the quality of teachers, secondary education do not require affiliation education, tuition fees and the ratio of pupils to with a board, which means a school can be

41 42 against the revised allocation of Rs 97.155 ICT industry; HEC mandated closer industry- billion for the current fiscal year, showing a university linkages, requiring lecturer / decrease of around 20.5%. The government professor secondment to industry for skill has also reduced the budgetary allocation for refresh / industry relevance training; accred- higher education sector. Pakistan's public ited learning (credit hours) for 3-6 months' expenditure on education as a percentage of placements of students in the private sector; GDP is estimated at 2.4% in fiscal year 2018- Talent hunting and identification, followed by 19, which is the lowest in the region. ICT scholarships program (undergraduate). A sufficient portion of annual budget should Recommendations also be allocated to Higher Education Ÿ The National ICT R&D Fund executed a teacher. In its annual Global Education Scholarships and for Research and comprehensive outreach scholarship Monitoring Report (2017) by United Nations Ÿ There should be a national emphasis on Development (R&D). Encouraging R&D program in 2007. This program called E d u c a t i o n a l , S c i e n t i f i c a n d C u l t u r a l improving the quality of human resource activities through accumulation of knowledge National ICT Scholarship Program (NICTSP) Organization (UNESCO), there were as many being produced in ICT sector. A closer and human capital could help put Pakistan's was executed by National ICT R&D Fund and as 80 students per teacher in private schools in Industry-Academia collaboration is required, technology manufacturing sector on the high targeted talented and deserving students Pakistan. These 'alternative educational and under the supervision of government, to growth path by alleviating the competitive from all provinces/regions of the country training providers' mostly do not have much in produce intellectual capital able to satisfy strength of export-oriented industries in through screening and testing. To find best the way of risk assessment and control. The High Value ICT work. Furthermore, sufficient global markets. students having aptitude and interest United Nations Committee on the Rights of the budgetary allocation for education in the towards IT sector, such programs should be Child also recently echoed similar reservations national GDP will contribute to this effort. Ÿ Schools from an early age should inculcate reinvigorated. stating, “The privatization of education in Incentives and facilities of the highest order and develop independent thinking, analytical Pakistan comes with lack of measures to ensure should be provided to scientists and skills and some basic know-how of IT related Ÿ A National Talent Accelerator Program is the compliance of private schools with minimum researchers, as it can help attract young aspects in the students for which the curricu- proposed for improving digital literacy at all educational standards”. students to a career in research. However, at lum should be periodically updated and the educational levels and moving up the value the same time a rigorous qualitative assess- teachers provided with requisite training. chain for developing technology and intellec- Challenges ment regime should also be put in place to tual capital. It is further proposed improve Ÿ assess the R&D output. Research in Creating a fund for R&D in new technologies existing mix of human capital from ICT sector Ÿ There are a significant number of training and futuristic fields such as biotechnology, for start-ups and entrepreneurs to enable by re-skilling and up-skilling. Also, it is educational institutes that are not registered artificial intelligence, robotics and quantum innovation in cutting edge communications, proposed to incentivize closer industry- in the government system and have no computing could help put us on the forefront 5G, software, digital content, cyber security academia coordination for creating a credible regulator or compliance check on of global leaders of scientific community and and related technologies and applications; sustainable pool of human resource trained them. These schools easily manipulate the promote a transfer / exchange of experts and and commercialization of products and on hi-tech technologies. Companies such as curriculum and teaching strategies. There technology between Pakistan and the services through grants, scholarships, Microsoft, VMware, IBM, Amazon and others are also few cases where schools are leading global scientific institutes. venture capital, etc. can be incentivized to invest in training adopting below-standard curriculum or resources and making multiple Global teaching methods and are solely driven by Ÿ Industry relevant ICT skills development Ÿ Promoting design led ICT equipment Service Support Centers in Pakistan. the monetary benefits of running a business programs for undergraduate students across manufacturing in Pakistan by leveraging in a sector that is suffering from minimum Pakistani universities, run in cooperation with indigenous software/ R&D capabilities. b. Unregulated Educational/Training oversight and regulation by the state. Institutes Ÿ The minimum requirements to open a private Pakistan's private sector suffers from a lack of educational or training institute are very low. consistent and forward-thinking regulations, Private institutions offering primary and which seriously impacts the quality of teachers, secondary education do not require affiliation education, tuition fees and the ratio of pupils to with a board, which means a school can be

41 42 networking, Big Data, security, storage and data effective business incubation centers, management. In Pakistan, relations between encouraging partnerships between industry universities and businesses are far from being and academia and placing career counseling as large as they should be, despite the offices that should work on intellectual and existence of engineering schools and schools professional development of the graduates of business and management, natural during the course of their studies in order to partners of companies; the presence of prepare them today for the challenges of major public research organizations; and also tomorrow. The results of already existing the reciprocal mistrust that has long prevailed incubation centers should get more projec- between academics and the business world, tion so that funds can be attained for the which has led to a slowed ICT growth in the development of new centers. country. Ÿ To reduce the gap between academia, Challenges research and job market, universities are needed to restructure their programs to Ÿ One of the major failings of the Pakistani prepare ICT professionals for today's market higher education system is the discord requirements and the needs of the future. To Ÿ registered without being accountable for A provincial regulatory framework with active between the curriculum and the needs of the achieve this objective, teachers need to be suitable permanent premises, qualified operational guidelines to monitor private industry. Most graduates that make their way trained periodically in order to keep them faculty, a library, and other necessary educational institutes should be formulated. into the Pakistani job market have no clue abreast with latest research and industrial facilities. The standards for the opening of private about what the employers expect of them or demands. Visiting faculty from IT industry institutions should be raised to a certain what are the skills needed to perform in a should be incorporated in IT departments of Recommendations minimum criterion. particular role. The education and skill gap in all universities and should impact the ranking our youth has been widening for years, and / performance assessment of the universities Ÿ The government should update the regula- Ÿ Utilize the training infrastructure available on the job training to make young graduates by HEC. tory system and explore new ways for with telecom Public Sector Organizations for skilled enough to work in a certain job role collaboration amongst public, private, and skill development (PTCL, Government has been costing valuable resources to Ÿ The institutions offering vocational courses civil sectors. Schools, etc.) and facilitate technical employers for long. should be required to integrate ICT education upgradation of Public Sector Organizations. and skills in their teaching-learning process. Ÿ The government should immediately develop Ÿ Our graduates have good foundation credible and efficient regulations and c. Industry-Academia-Government Partnership knowledge but need significant polishing for Ÿ Job oriented courses in ICT should be monitoring mechanisms while adhering to tangible utilization in professional settings. developed and established for students of follow-up sanctions when standards are not There are examples of fruitful collaboration The private sector IT industry estimates that the vocational stream at the higher second- met. between universities, industry partners and only around 5000 to a maximum of 10,000 IT ary level by linking them with the need of ICT start-ups. Many ideas from research in universi- graduates, out of the 25000 graduating enabled industries/establishment in the Ÿ The government should take necessary ties are put to use through collaboration between annually, are actually employable to fulfill the neighborhood. measures to create a homogenous educa- universities and firms. Others reach the market needs of the private sector. tional system all across the country. through licensing or start-up companies. Ÿ The scope of these courses should be broad- Internationally, in the ICT sector, such partner- Recommendations based ICT literacy. It should not be limited to Ÿ A system of checks and balances for the ship is fostering R&D and innovation by bringing ICT based occupations, but should also private sector to oversee the issue of fees, together industry and university partners in Ÿ Universities should focus on creating an inform and enhance productivities in a wide school standards, and teachers' pay grades pursuit of timely themes in applications and entrepreneurial and independent thinking range of other occupations (for example, should be devised. infrastructure, including AI and machine learn- culture among their graduates. This can be accounting, office automation, office commu- ing, hardware acceleration, operating systems, attained through the establishment of nication, data handling and data processing,

43 44 networking, Big Data, security, storage and data effective business incubation centers, management. In Pakistan, relations between encouraging partnerships between industry universities and businesses are far from being and academia and placing career counseling as large as they should be, despite the offices that should work on intellectual and existence of engineering schools and schools professional development of the graduates of business and management, natural during the course of their studies in order to partners of companies; the presence of prepare them today for the challenges of major public research organizations; and also tomorrow. The results of already existing the reciprocal mistrust that has long prevailed incubation centers should get more projec- between academics and the business world, tion so that funds can be attained for the which has led to a slowed ICT growth in the development of new centers. country. Ÿ To reduce the gap between academia, Challenges research and job market, universities are needed to restructure their programs to Ÿ One of the major failings of the Pakistani prepare ICT professionals for today's market higher education system is the discord requirements and the needs of the future. To Ÿ registered without being accountable for A provincial regulatory framework with active between the curriculum and the needs of the achieve this objective, teachers need to be suitable permanent premises, qualified operational guidelines to monitor private industry. Most graduates that make their way trained periodically in order to keep them faculty, a library, and other necessary educational institutes should be formulated. into the Pakistani job market have no clue abreast with latest research and industrial facilities. The standards for the opening of private about what the employers expect of them or demands. Visiting faculty from IT industry institutions should be raised to a certain what are the skills needed to perform in a should be incorporated in IT departments of Recommendations minimum criterion. particular role. The education and skill gap in all universities and should impact the ranking our youth has been widening for years, and / performance assessment of the universities Ÿ The government should update the regula- Ÿ Utilize the training infrastructure available on the job training to make young graduates by HEC. tory system and explore new ways for with telecom Public Sector Organizations for skilled enough to work in a certain job role collaboration amongst public, private, and skill development (PTCL, Government has been costing valuable resources to Ÿ The institutions offering vocational courses civil sectors. Schools, etc.) and facilitate technical employers for long. should be required to integrate ICT education upgradation of Public Sector Organizations. and skills in their teaching-learning process. Ÿ The government should immediately develop Ÿ Our graduates have good foundation credible and efficient regulations and c. Industry-Academia-Government Partnership knowledge but need significant polishing for Ÿ Job oriented courses in ICT should be monitoring mechanisms while adhering to tangible utilization in professional settings. developed and established for students of follow-up sanctions when standards are not There are examples of fruitful collaboration The private sector IT industry estimates that the vocational stream at the higher second- met. between universities, industry partners and only around 5000 to a maximum of 10,000 IT ary level by linking them with the need of ICT start-ups. Many ideas from research in universi- graduates, out of the 25000 graduating enabled industries/establishment in the Ÿ The government should take necessary ties are put to use through collaboration between annually, are actually employable to fulfill the neighborhood. measures to create a homogenous educa- universities and firms. Others reach the market needs of the private sector. tional system all across the country. through licensing or start-up companies. Ÿ The scope of these courses should be broad- Internationally, in the ICT sector, such partner- Recommendations based ICT literacy. It should not be limited to Ÿ A system of checks and balances for the ship is fostering R&D and innovation by bringing ICT based occupations, but should also private sector to oversee the issue of fees, together industry and university partners in Ÿ Universities should focus on creating an inform and enhance productivities in a wide school standards, and teachers' pay grades pursuit of timely themes in applications and entrepreneurial and independent thinking range of other occupations (for example, should be devised. infrastructure, including AI and machine learn- culture among their graduates. This can be accounting, office automation, office commu- ing, hardware acceleration, operating systems, attained through the establishment of nication, data handling and data processing,

43 44 scale. There are significant variations in the various teacher training institutes in the quality of education provided from one child to country, these are either not very well the next. This is the pervasive issue of a lack of resourced or being poorly run due to lack of equity literacy. Among the most pressing fund and trained human resource such as shortcomings of Pakistani universities is a trainers and administrators. There are no shortage of senior teaching staff. While assis- proper training standards in the available tant, associate and full professors must formally training institutes around the country. Most of have a PhD, entry-level lecturers in most the training institutes have been closed down academic disciplines (except engineering, due to lack of funds. The courses being run in information technology, computer science, the teacher education intuitions are outdated medical sciences, law, and studio arts and and very traditional which do not enhance the design) can teach at university level with just a ICT skills, motivation and quality of teachers. Master's degree (18 years of total education). Since HEIs rely heavily on non-tenured lectur- Recommendations desktop publishing, graphics and designing, internship and industry placements (e-g 3-6 ers, the percentage of teaching staff with PhDs is music and video, etc.). This should also months) mandatory for the acquisition of final consequently low. According to HEC statistics, Ÿ The problem of quality teaching can be include courses on cyber security. degree, instead of the currently in vogue 1-2 only 21% of full-time faculty at Pakistani univer- catered by initiating a stop gap arrangement. months token internships. This would entail a varying cohort of teachers Ÿ The courses should be modular, and stu- sities held a PhD in 2015. Some universities did dents should be provided a wide range of Ÿ Leading universities should create a not have any professors who held doctoral being imported from educational utopias, to choices, catering to a variety of job options, roadmap for developing skilled manpower qualifications. not only work on the quality of teaching and hardware and software platforms, tools and with theoretical and applied knowledge in education but also to provide invaluable Challenges resources. Students should not be limited to emerging technologies and their eventual policy inputs. These teachers and professors a fixed set of courses to qualify for a degree; utilization in the ICT industry, such as 5G, must be systematically placed at different Ÿ There is lack of training opportunities for flexible options should be provided by degree Artificial Intelligence, Big Data, Robotics, levels of the education setup including teachers in Pakistan. Although, there are awarding institutes so that students can Internet of Things and Cloud Computing. primary, secondary, graduate and post- choose a professional and knowledge pathway suited to their particular interests. Ÿ Adopt the dual-use technology model, where defence sector may fund academia and work Ÿ The courses should be frequently revised in collaboration with the industry for R&D and updated in order to maintain relevancy to leading to cutting-edge technology usable changing requirements of the job market and both for civilian purposes and military emerging trends in technology. applications. This is especially relevant to bridge the technological gap between our Ÿ Collaboration with foreign universities is armed forces and that of hostile nations'. required, focusing on adoption of research Furthermore, US followed a Triple Helix and entrepreneurship culture prevailing in Model to promote its ICT structure, i.e. foreign universities. collaboration amongst private, government and defence sector. Ÿ Online courses from the world's leading universities and online certifications should d. Training of Teachers also be included in the curriculum. Pakistan's education system suffers from Ÿ Universities should make longer-duration inequality in educational outcomes on a massive

45 46 scale. There are significant variations in the various teacher training institutes in the quality of education provided from one child to country, these are either not very well the next. This is the pervasive issue of a lack of resourced or being poorly run due to lack of equity literacy. Among the most pressing fund and trained human resource such as shortcomings of Pakistani universities is a trainers and administrators. There are no shortage of senior teaching staff. While assis- proper training standards in the available tant, associate and full professors must formally training institutes around the country. Most of have a PhD, entry-level lecturers in most the training institutes have been closed down academic disciplines (except engineering, due to lack of funds. The courses being run in information technology, computer science, the teacher education intuitions are outdated medical sciences, law, and studio arts and and very traditional which do not enhance the design) can teach at university level with just a ICT skills, motivation and quality of teachers. Master's degree (18 years of total education). Since HEIs rely heavily on non-tenured lectur- Recommendations desktop publishing, graphics and designing, internship and industry placements (e-g 3-6 ers, the percentage of teaching staff with PhDs is music and video, etc.). This should also months) mandatory for the acquisition of final consequently low. According to HEC statistics, Ÿ The problem of quality teaching can be include courses on cyber security. degree, instead of the currently in vogue 1-2 only 21% of full-time faculty at Pakistani univer- catered by initiating a stop gap arrangement. months token internships. This would entail a varying cohort of teachers Ÿ The courses should be modular, and stu- sities held a PhD in 2015. Some universities did dents should be provided a wide range of Ÿ Leading universities should create a not have any professors who held doctoral being imported from educational utopias, to choices, catering to a variety of job options, roadmap for developing skilled manpower qualifications. not only work on the quality of teaching and hardware and software platforms, tools and with theoretical and applied knowledge in education but also to provide invaluable Challenges resources. Students should not be limited to emerging technologies and their eventual policy inputs. These teachers and professors a fixed set of courses to qualify for a degree; utilization in the ICT industry, such as 5G, must be systematically placed at different Ÿ There is lack of training opportunities for flexible options should be provided by degree Artificial Intelligence, Big Data, Robotics, levels of the education setup including teachers in Pakistan. Although, there are awarding institutes so that students can Internet of Things and Cloud Computing. primary, secondary, graduate and post- choose a professional and knowledge pathway suited to their particular interests. Ÿ Adopt the dual-use technology model, where defence sector may fund academia and work Ÿ The courses should be frequently revised in collaboration with the industry for R&D and updated in order to maintain relevancy to leading to cutting-edge technology usable changing requirements of the job market and both for civilian purposes and military emerging trends in technology. applications. This is especially relevant to bridge the technological gap between our Ÿ Collaboration with foreign universities is armed forces and that of hostile nations'. required, focusing on adoption of research Furthermore, US followed a Triple Helix and entrepreneurship culture prevailing in Model to promote its ICT structure, i.e. foreign universities. collaboration amongst private, government and defence sector. Ÿ Online courses from the world's leading universities and online certifications should d. Training of Teachers also be included in the curriculum. Pakistan's education system suffers from Ÿ Universities should make longer-duration inequality in educational outcomes on a massive

45 46 graduate education levels. Internet-enabled phones. A major cause of this and reaping benefits a. Availability of Broadband in Pakistan dichotomy (high mobile phone penetration but Ÿ To modernize the research and development low Internet awareness) - other than a low 2. Infrastructure Development PTA (Pakistan Telecommunication Authority) practices in Pakistani educational institutes overall literacy rate - is that there is limited maintains data of broadband penetration in and raise the qualifications profile of univer- localized content available on the internet General Pakistan across all mobile and wired service sity faculty, the government should support providers. The latest numbers indicate that we (content in our local languages), which makes it We live in an age where digital citizenship doctoral programs with scholarship pro- have about 87 million Broadband subscribers. difficult for our non-English speaking population shapes our history and place in this world. It is grams of considerable scale, considering Although 75% of our population (150+ million) to consume the pervasively available foreign inexcusable that digital literacy remains an Pakistan's fiscal constraints. HEC is already has access to basic voice telephony, broadband content. underutilized phenomenon within the country. giving International Doctoral Scholarships on penetration is much lower. We have 41% Mobile Improving the human condition through technol- annual basis; however, the skills and Broadband Internet penetration which puts us at Recommendations ogy should be viewed as an advancement of knowledge of these PHD scholars on 75th when ranked globally. Only 1.7% of our rights, not as a way to keep people uninformed to returning to Pakistan are not utilized properly. Broadband subscriptions are connected via It is a universal fact, that education is considered avoid democratic oversight. The Internet is an Therefore, we need to re-evaluate the Wired/Fixed Broadband. Pakistan's rank for as the most powerful instrument, eradicating essential resource for today's world and there is system for optimal utilization of their skills. wired broadband penetration is 150. “The poverty, gear-up socio-economic development simply no identity formulation without it. and creating awareness in the society. It unlocks Inclusive Internet Index: Measuring Success Ÿ Digitization requires not only access but digital Teachers can also benefit from industrial 2020” ranks Pakistan as 76th on a global index the door to awareness and helps individuals literacy and skills allow us to effectively use the placements sponsored jointly by the industry of 100 countries. Our challenges with respect to make informed choices. It gives people access Internet. The gaps in connectivity unsurprisingly (e.g. with tax credits related incentives) and broadband penetration in Pakistan are with to knowledge for improving lives but also for are between rural to urban settlements and the teacher's employers (public or private Availability where our internet penetration sector). This will impart practical and industry shaping a more informed, knowledge society. women. Therefore, in order to understand the stands at 32.4%. Only countries like relevant skills to the teaching faculty as well. Teaching systems should now aim to increase problems with the development of the ICT Afghanistan, North Korea, East Timor & ICT use in primary and secondary education. sector, the following issues have been identified: Turkmenistan have lower penetration than e. Lack of Knowledge Measures need to be taken to promote creation Ÿ Availability of broadband Pakistan. and consumption of localized digital content, Ÿ Challenge with focused efforts on native font's develop- Right of Ways Fiber Coverage in Pakistan ment, mandatory local/regional language Ÿ High Taxes Although there is huge adoption of mobile publications (e.g. websites, magazines) of all Ÿ Cost of Bandwidth High speed and good quality digital services, phones in Pakistan, a vast percentage of the public sector entities and policies to encourage that are now essential for internet enabled population still does not own or have access to digital publishing / marketing houses to create Ÿ Rising Gender Gap businesses, require massive amounts of localized content and media. Ÿ Availability of Uninterrupted and internet bandwidth, particularly in backhaul and Affordable Power backbone networks. This is only possible Expected Impact of HR Development

Developing skilled human resource is key to unlocking Pakistan's ICT potential. The impacts include: -

Ÿ Significantly improving revenue per ICT resource

Ÿ Influx of foreign direct investments

Ÿ Availability of highly trained human resource

Ÿ Pakistan engaging in cutting-edge R&D

47 48 graduate education levels. Internet-enabled phones. A major cause of this and reaping benefits a. Availability of Broadband in Pakistan dichotomy (high mobile phone penetration but Ÿ To modernize the research and development low Internet awareness) - other than a low 2. Infrastructure Development PTA (Pakistan Telecommunication Authority) practices in Pakistani educational institutes overall literacy rate - is that there is limited maintains data of broadband penetration in and raise the qualifications profile of univer- localized content available on the internet General Pakistan across all mobile and wired service sity faculty, the government should support providers. The latest numbers indicate that we (content in our local languages), which makes it We live in an age where digital citizenship doctoral programs with scholarship pro- have about 87 million Broadband subscribers. difficult for our non-English speaking population shapes our history and place in this world. It is grams of considerable scale, considering Although 75% of our population (150+ million) to consume the pervasively available foreign inexcusable that digital literacy remains an Pakistan's fiscal constraints. HEC is already has access to basic voice telephony, broadband content. underutilized phenomenon within the country. giving International Doctoral Scholarships on penetration is much lower. We have 41% Mobile Improving the human condition through technol- annual basis; however, the skills and Broadband Internet penetration which puts us at Recommendations ogy should be viewed as an advancement of knowledge of these PHD scholars on 75th when ranked globally. Only 1.7% of our rights, not as a way to keep people uninformed to returning to Pakistan are not utilized properly. Broadband subscriptions are connected via It is a universal fact, that education is considered avoid democratic oversight. The Internet is an Therefore, we need to re-evaluate the Wired/Fixed Broadband. Pakistan's rank for as the most powerful instrument, eradicating essential resource for today's world and there is system for optimal utilization of their skills. wired broadband penetration is 150. “The poverty, gear-up socio-economic development simply no identity formulation without it. and creating awareness in the society. It unlocks Inclusive Internet Index: Measuring Success Ÿ Digitization requires not only access but digital Teachers can also benefit from industrial 2020” ranks Pakistan as 76th on a global index the door to awareness and helps individuals literacy and skills allow us to effectively use the placements sponsored jointly by the industry of 100 countries. Our challenges with respect to make informed choices. It gives people access Internet. The gaps in connectivity unsurprisingly (e.g. with tax credits related incentives) and broadband penetration in Pakistan are with to knowledge for improving lives but also for are between rural to urban settlements and the teacher's employers (public or private Availability where our internet penetration sector). This will impart practical and industry shaping a more informed, knowledge society. women. Therefore, in order to understand the stands at 32.4%. Only countries like relevant skills to the teaching faculty as well. Teaching systems should now aim to increase problems with the development of the ICT Afghanistan, North Korea, East Timor & ICT use in primary and secondary education. sector, the following issues have been identified: Turkmenistan have lower penetration than e. Lack of Knowledge Measures need to be taken to promote creation Ÿ Availability of broadband Pakistan. and consumption of localized digital content, Ÿ Challenge with focused efforts on native font's develop- Right of Ways Fiber Coverage in Pakistan ment, mandatory local/regional language Ÿ High Taxes Although there is huge adoption of mobile publications (e.g. websites, magazines) of all Ÿ Cost of Bandwidth High speed and good quality digital services, phones in Pakistan, a vast percentage of the public sector entities and policies to encourage that are now essential for internet enabled population still does not own or have access to digital publishing / marketing houses to create Ÿ Rising Gender Gap businesses, require massive amounts of localized content and media. Ÿ Availability of Uninterrupted and internet bandwidth, particularly in backhaul and Affordable Power backbone networks. This is only possible Expected Impact of HR Development

Developing skilled human resource is key to unlocking Pakistan's ICT potential. The impacts include: -

Ÿ Significantly improving revenue per ICT resource

Ÿ Influx of foreign direct investments

Ÿ Availability of highly trained human resource

Ÿ Pakistan engaging in cutting-edge R&D

47 48 capacity. Fi hotspots in the UCs.

Ÿ One of the best-known models, called Ÿ This challenge of wide ranging and far “Stokab”, originated in Sweden, a country reaching fiber optic network deployment that ranks first in the Network Readiness across Pakistan is something that cannot be Index. Stokab, the cities own underground met by the ICT industry alone. Close cooper- passive fiber networks.Fiber optic capacity is ation between Federal and Provincial leased to the ISPs, who compete with each Governments and the industry will be other in service provision. The Stokab model required to address significant issues that and its variations are used in several are obstacles in this sector. Federal subsi- European countries. Several Stockholm- dies, telecom tax breaks and policy initiatives based tech companies, such as Skype, will also be needed to make broadband Spotify and Transmode, have gone on to projects attractive, feasible and sustainable. become big players in their industries. For through optic fiber links. Ÿ The relatively infinite capacity of optic fiber our smaller cities and rural towns, we could Ÿ The increasing number of external fiber cables means that they are what economists follow a similar approach to the Swedish connections will help minimize disruptions in Challenges refer to as non-rival asset i.e. the use of the Stokab. The ownership of the passive fiber Internet connectivity and help deal with its capacity by one operator in no way affects or networks in these cities could lie with the city impact on Pakistan's businesses, industry Ÿ There is a lack of wired broadband infrastruc- impedes the use of it by another. On any (or provincial) government. The city or and security. ture in Pakistan. Wired Broadband Service modern fiber infrastructure there is enough provincial governments could hire technical providers offering high bandwidth solutions room for all players using all the capacity they assistance of PTA-licensed telecom infra- Ÿ The government should target to ensure based on Telephone (DSL) and Cable media can use for the foreseeable future without structure providers (TIPs) to install and connectivity to all uncovered areas, establish are challenged by the physics of copper encroaching upon each other. However, in manage the fiber optic network on their a national digital grid (e.g. under a new infrastructure, limiting what they can offer to Pakistan, the large data-carrying capacity of behalf. National Fiber Authority) providing universal consumers. Fiber medium is a pre-requisite fiber optic cables never gets fully utilized, as broadband connectivity at 50Mbps to every for business-grade Gigabit GPON solutions most Internet Service Providers compete by Ÿ If the Stokab model is adopted, private sector citizen by 2025. offering Voice, Data and High Definition video laying their own fiber optic networks. ISPs will not have to invest in fiber optic content. Resultantly, wasted redundant investment networks installation and will consequentially Ÿ Promoting collaboration models involving worth billions lies buried in cities. In addition, be able to provide lower cost services, which state, local bodies and private sector is Ÿ The existing fiber optic network through there is the problem of inaccessibility to in turn will decrease the financial access necessary for provision of shared duct which Pakistan connects to the world has certain geographical areas due to which new barrier to internet services for a significant infrastructure in municipalities, rural areas been developed by a consortium that has cables cannot be laid. portion of our population. Low barrier to entry and national highways. Indian companies either as partners or in the ISP sector will allow small new entrants shareholders. This has to be viewed as a real Recommendations into the market and the sector will have to Ÿ Building a fiber-to-the-tower program to and present security concern with respect to compete on price and quality of service. enable optic fiber connectivity of at least 60% surveillance of our communications. Ÿ The developed economies treat the passive Furthermore, cities and citizens will be saved of telecom towers thereby, accelerating optic fiber networks as a utility (like water and from repeated road diggings for lying of fiber migration to 4G/5G. Ÿ There is no public sector spending on digital gas pipelines, electric power, etc.). optic cables. infrastructure in Pakistan other than by the Governments or their national carriers Ÿ Extending incentives and exemptions for the state-owned National Telecommunication commission the passive fiber option infra- Ÿ Subsidized optic fiber connectivity to all construction of telecom towers and optic fiber Corporation (NTC) for government's own structure, and then lease the fiber capacity to unserved Union Councils (UCs), in a phased connectivity. needs (which are miniscule compared to the the private sector ISPs (Internet Service manner, connecting inter-alia towers of needs of a developing economy gearing Providers), which then provide digital access mobile broadband, rural schools, local Ÿ Encourage and facilitate sharing of active towards ICT led export drive). to the end-users using the fiber optic network government offices, health-care centers, Wi- infrastructure by enhancing the scope of

49 50 capacity. Fi hotspots in the UCs.

49 50 Infrastructure Providers (IP) and promoting Department), therefore different rules apply. Recommendations backbones. and incentivizing deployment of common sharable, passive as well as the active Ÿ RoW charges are high but offer nothing in Ÿ For the Telecom sector to flourish, the heavy Challenges infrastructure. return except for permission to work i.e. taxation levied on the sector needs to be intended as a pure rent-seeking enterprise. eased. A number of countries globally have Ÿ Bandwidth Tariffs are un-regulated. They b. Right of Ways Other than official RoW charges, there are started 5G trials, with commercial deploy- should be regulated by PTA. PTCL's IPLC also unofficial charges, payable to public as ments starting from 2019. A favorable tax (International Private Leased Circuit) tariffs Right of Way (RoW) is "the legal right, estab- well as private stakeholders. Otherwise, treatment to incentivize investments in 5G are not competitive when compared with lished by usage or grant, to pass along a specific anyone (including wayside shop-owners) infrastructure equipment and associated regional countries. route through grounds or property belonging to could stop the work midway. services can be offered conditionally to another", or "a path or thoroughfare subject to technology transfer. Ÿ Multiples of higher capacities of IPLC are such a right". The ICT industry faces a multitude Recommendations inconsistent with international standards. of problems with respect to acquiring right of way Ÿ Encouraging investment in broadband for deploying fiber optic infrastructure. Ÿ A national tariff control policy on Right of Way infrastructure through fiscal incentives, Ÿ Tariffs for higher capacities i.e. DS-3 & STM-1 is a necessity for quicker development of ICT including accelerated depreciation and tax are much higher when compared with Challenges infrastructure, and thus services in the incentives; and incentivizing fixed line regional countries. country. A number of countries in our region broadband. Ÿ Pakistan lacks effective tariff and policy already have a National Right of Way policy. Ÿ Charges of IP and IPLC are exorbitant as controls on Right of Ways for laying fiber We must recognize fiber connections as a d. Cost of Bandwidth compared to Philippines, Argentina and infrastructure. Service Providers have to public utility conduit without which we cannot India. negotiate with each city, jurisdiction, NHA, lay the foundation for a modern ICT infra- Internet Service Providers Association of township that fall in the proposed fiber path. structure. Without such a policy, fiber projects Pakistan (ISPAK), established in 1997, claims Recommendations In addition to the delay and effort involved in will continue to be expensive and take much that the country has an Internet bandwidth the separate negotiations with each of such longer time to complete. capacity of more than 2500 Gbps with an Ÿ Regulatory bodies throughout the world entities, fiber laying projects are severely installed bandwidth capacity of almost 3 terabits issue consultation papers for soliciting impacted by the fact that there are no Ÿ The Government should constitute a consul- per second (Tbps) and loading capacity is at 2 opinion of stakeholders before issuing final established market rates or upper bounds – tancy committee, which shall study the best Tbps from two authorized capacity suppliers; orders. PTA also followed the same practice. allowing these entities to demand any rate international practices and prepare the legal Pakistan Telecommunication Company Limited Industries demand a more transparent and from the service providers for acquiring the framework on RoW. This may include (PTCL) and Transworld with five undersea inclusive consultation process. Every right of way. These authorities/entities could suggesting an independent corporate body cables connecting the country to the world and consultation of regulatory bodies with the be Pakistan Railways, national/provincial to deal with RoW issues in Pakistan, an four companies providing the domestic fiber industries should be made transparent and highways, city development (like CDA), Authority or a Commission fully empowered housing development (like DHAs), munici- and responsible for RoW in accordance with palities, cantonments, tehsils, etc. the laws, rules, and regulations in Pakistan.

Ÿ There are no uniform procedures for acquir- Ÿ Create a Broadband Readiness Index for ing right of way (RoW), even in municipalities cities/Tehsils to attract investments and within the same province or district. If an address RoW challenges. investor has obtained RoW for the entire city, he still needs to get separate RoWs for any c. High Taxes railway or highway crossings that come in the way. Some places are subject to multiple Despite incentives the taxes on the sector are jurisdictions (e.g. a road along a canal is very high, which ultimately increase the overall claimed by the city as well as by the Irrigation cost of the services.

51 52 Infrastructure Providers (IP) and promoting Department), therefore different rules apply. Recommendations backbones. and incentivizing deployment of common sharable, passive as well as the active Ÿ RoW charges are high but offer nothing in Ÿ For the Telecom sector to flourish, the heavy Challenges infrastructure. return except for permission to work i.e. taxation levied on the sector needs to be intended as a pure rent-seeking enterprise. eased. A number of countries globally have Ÿ Bandwidth Tariffs are un-regulated. They b. Right of Ways Other than official RoW charges, there are started 5G trials, with commercial deploy- should be regulated by PTA. PTCL's IPLC also unofficial charges, payable to public as ments starting from 2019. A favorable tax (International Private Leased Circuit) tariffs Right of Way (RoW) is "the legal right, estab- well as private stakeholders. Otherwise, treatment to incentivize investments in 5G are not competitive when compared with lished by usage or grant, to pass along a specific anyone (including wayside shop-owners) infrastructure equipment and associated regional countries. route through grounds or property belonging to could stop the work midway. services can be offered conditionally to another", or "a path or thoroughfare subject to technology transfer. Ÿ Multiples of higher capacities of IPLC are such a right". The ICT industry faces a multitude Recommendations inconsistent with international standards. of problems with respect to acquiring right of way Ÿ Encouraging investment in broadband for deploying fiber optic infrastructure. Ÿ A national tariff control policy on Right of Way infrastructure through fiscal incentives, Ÿ Tariffs for higher capacities i.e. DS-3 & STM-1 is a necessity for quicker development of ICT including accelerated depreciation and tax are much higher when compared with Challenges infrastructure, and thus services in the incentives; and incentivizing fixed line regional countries. country. A number of countries in our region broadband. Ÿ Pakistan lacks effective tariff and policy already have a National Right of Way policy. Ÿ Charges of IP and IPLC are exorbitant as controls on Right of Ways for laying fiber We must recognize fiber connections as a d. Cost of Bandwidth compared to Philippines, Argentina and infrastructure. Service Providers have to public utility conduit without which we cannot India. negotiate with each city, jurisdiction, NHA, lay the foundation for a modern ICT infra- Internet Service Providers Association of township that fall in the proposed fiber path. structure. Without such a policy, fiber projects Pakistan (ISPAK), established in 1997, claims Recommendations In addition to the delay and effort involved in will continue to be expensive and take much that the country has an Internet bandwidth the separate negotiations with each of such longer time to complete. capacity of more than 2500 Gbps with an Ÿ Regulatory bodies throughout the world entities, fiber laying projects are severely installed bandwidth capacity of almost 3 terabits issue consultation papers for soliciting impacted by the fact that there are no Ÿ The Government should constitute a consul- per second (Tbps) and loading capacity is at 2 opinion of stakeholders before issuing final established market rates or upper bounds – tancy committee, which shall study the best Tbps from two authorized capacity suppliers; orders. PTA also followed the same practice. allowing these entities to demand any rate international practices and prepare the legal Pakistan Telecommunication Company Limited Industries demand a more transparent and from the service providers for acquiring the framework on RoW. This may include (PTCL) and Transworld with five undersea inclusive consultation process. Every right of way. These authorities/entities could suggesting an independent corporate body cables connecting the country to the world and consultation of regulatory bodies with the be Pakistan Railways, national/provincial to deal with RoW issues in Pakistan, an four companies providing the domestic fiber industries should be made transparent and highways, city development (like CDA), Authority or a Commission fully empowered housing development (like DHAs), munici- and responsible for RoW in accordance with palities, cantonments, tehsils, etc. the laws, rules, and regulations in Pakistan.

51 52 easily accessible for public consumption. 92.5%, the average interruption duration and frequency values are much higher. The average Ÿ Improve international connectivity and shortfall in the power sector is 4,000 megawatts reduce the cost of international bandwidth by (MW), and nearly two billion cubic feet per day facilitating setting up of International Cable (BCFD) in the natural gas sector. The shortfall in Landing Stations, by rationalizing access the power sector can rise to around 7,000MW or charges, removing regulatory hurdles and by 32% of total demand for electricity. This has benchmarking the cost and quality of severely impacted the country's economy, international bandwidth to global trends. especially sectors like the ICT. e. Rising Gender Gap Challenges

Challenge Ÿ Power outages have caused the losses of billions to the economy. While all sectors A report by Bytes for All states, that only 21% of have been severely hit by the power outage, from the burden to compete for limited and manufacture, production and import of such males and 12% of females in Pakistan are online total industrial output loss is estimated to be expensive office space in urban areas, traffic with an equal disparity among those that use at around 12-37%. equipment for digital communication congestion, expensive utilities, competing for mobile phones. This is almost at par with recent technologies. global figures that suggest that more than 300 Ÿ Disruption in the supply of electricity lessens internet bandwidth from a limited capacity million fewer women access the Internet on a business sustainability, especially in the pool, and related factors that impact long Expected Impact of the Connectivity Dev- mobile device than men, and women are 8% always-online IT and IT enabled Services terms business feasibility. elopment less likely than men to own a mobile phone. This sectors. Ÿ poses a major challenge towards Internet Tariff differential subsidies should be phased ICT Infrastructure is the spine of the IT industry, adoption in general. Ÿ The increased power generation costs, out over the program period (i.e. three years) and an exponential growth of the sector will coupled with the high proportion of line and tariffs should be brought to cost recovery require special attention to the infrastructure. Recommendations losses, have led to very high electricity tariffs. levels. The country should develop indige- The high cost of energy adds to the cost of nous industrial resources. Ÿ Increase in internet penetration will lead to Ÿ Raise awareness, and empower and en- doing business, making it difficult for start- increased adoption and promotion of ICT. Ÿ courage girls and young women to consider ups to manage resources and establish Promoting and incentivizing deployment of solar and green energy for telecom towers. studies and careers in ICT. business to sustain growth. Ÿ Simplifying RoW laws will lead to harmonized tariff and Policy Controls. Ÿ Governments should equip and prioritize Recommendations Ÿ For any meaningful growth in ICT sector, Data Centers act as this sector's 'Center of education in ICT subjects. Energy Wheeling will result in Private Sector Ÿ Gravity'. In prevalent times, cost of energy to The government should define ICT Industrial Investment and Networks of Data Centers. f. Power in the ICT Sector Zones/Special Technology Zones (STZ) and run and manage Data Centers is significantly start-ups should be facilitated to set up their high due to expensive commercial grid rates. People tend to associate energy issues only with businesses in STZs. In these zones, an Policy of Energy Wheeling via Solar Parks the energy used for transport, distribution and uninterrupted supply of energy should be should be actively allowed to offset expen- manufacturing. However, energy consumption ensured and subsidies on power should be sive grid energy via renewables. Doing so will related to ICT Sector is now attracting global provided to the ICT sector. The requirement not only reduce operational expenses and attention. According to the World Bank, in its first for STZs in the ICT sector does not entirely encourage clusters of data centers, but also comprehensive stock-taking of infrastructure relate to that of special industrial zones in the improve national energy mix. services in Asia, that electricity access in manufacturing sector. The primary drivers for Pakistan is in line with regional averages of STZs include alleviating the IT companies Ÿ Rationalizing of taxes and levies on the

53 54 easily accessible for public consumption. 92.5%, the average interruption duration and frequency values are much higher. The average Ÿ Improve international connectivity and shortfall in the power sector is 4,000 megawatts reduce the cost of international bandwidth by (MW), and nearly two billion cubic feet per day facilitating setting up of International Cable (BCFD) in the natural gas sector. The shortfall in Landing Stations, by rationalizing access the power sector can rise to around 7,000MW or charges, removing regulatory hurdles and by 32% of total demand for electricity. This has benchmarking the cost and quality of severely impacted the country's economy, international bandwidth to global trends. especially sectors like the ICT. e. Rising Gender Gap Challenges

53 54 PART PROMOTION AND DEVELOPMENT OF ICT INDUSTRY IV PART PROMOTION AND DEVELOPMENT OF ICT INDUSTRY IV Promotion and Development household name for music lovers in Pakistan, this sector which caters to the international made headlines when it secured $200k in seed market (through software development and of ICT Industry money in 2017. In 2015, Eatoye, a Pakistani business process outsourcing) and is deeply online food delivery service, was acquired by embedded into the global value chain. Rising one of the world's largest food portals (Food exports and domestic success stories show the Panda) and continues to expand across immense potential of this sector. Two fundamen- Pakistan. More recently, Airlift nabbed $12 tal constraints are limiting this potential; (i) low million in Pakistan's largest Series of funding. It overall productivity and restricted supply of is a ride-hailing startup which connects passen- skilled labor in the ICT sector and (ii) lack of a gers with buses on a fixed-rate, operating in supportive IT ecosystem. Pakistan's largest cities. These prominent app- based startups and many more cater to the Challenges domestic market, are part of the local economy Ÿ The tech industry is highly skilled and and form an important element of the tech eco- knowledge intensive. It may be able to system. There is another major component of withstand disruptive energy supply, but it will

General million USD, and has churned over 4,000 tech start-ups since 2010, of which close to 70% are Role of IT and telecommunication is vital in the still operational. The industry has the ability to development and economic growth of Pakistan. provide a fundamental boost to the country's The ICT industry in Pakistan has been growing economy, especially in this time of fiscal for the past 10-12 years in terms of its contribu- restraint. Fresh university graduates and young tion to the economy, however it is severely entrepreneurs are gearing up to realize the next constrained and underperforming with respect billion-dollar idea, and this conception is not far- to the sector's achievable potential and in fetched. A group of young Estonians developed comparison, to regional players. This part will Skype in 2003 which was eventually sold to therefore focus on key areas which include: - Microsoft for US$8.5 billion in an all cash deal. In Ÿ IT Market Development & Support fact, all tech giants across the world today have had humble beginnings. WhatsApp was sold to Ÿ IT and Telecom Manufacturing, Conver- Facebook for $19 billion, almost three times gence, Research and 0evelopment and Pakistan's defense budget. Such is the scope De-regulation and potential of this sector. With latest technology and access to faster internet, the tech Ÿ Software Exports and E-Commerce industry is producing services and products, across sectors that are increasingly more Ÿ Incentivizing IT Investment and Tech- nology Enabled Service Businesses dynamic and revolutionary. The industry's access to seed, private equity and venture a. IT Market Development and Support capital funds is also improving, albeit with regulatory challenges that needs to be Pakistan's technology industry is shaping up. addressed immediately. The country produces 25,000+ IT graduates each year, offers a domestic market of over 200 Patari, an online streaming application and a

57 58 Promotion and Development household name for music lovers in Pakistan, this sector which caters to the international made headlines when it secured $200k in seed market (through software development and of ICT Industry money in 2017. In 2015, Eatoye, a Pakistani business process outsourcing) and is deeply online food delivery service, was acquired by embedded into the global value chain. Rising one of the world's largest food portals (Food exports and domestic success stories show the Panda) and continues to expand across immense potential of this sector. Two fundamen- Pakistan. More recently, Airlift nabbed $12 tal constraints are limiting this potential; (i) low million in Pakistan's largest Series of funding. It overall productivity and restricted supply of is a ride-hailing startup which connects passen- skilled labor in the ICT sector and (ii) lack of a gers with buses on a fixed-rate, operating in supportive IT ecosystem. Pakistan's largest cities. These prominent app- based startups and many more cater to the Challenges domestic market, are part of the local economy Ÿ The tech industry is highly skilled and and form an important element of the tech eco- knowledge intensive. It may be able to system. There is another major component of withstand disruptive energy supply, but it will

57 58 not flourish without an adequate supply of graduates, the career pathways within the IT Ÿ ICT sector has the largest number of job investors. Pakistan has a thriving freelance skilled labor. Official statistics confirm that at sector are numerous and our degrees do not vacancies, although there are many job industry, which generally does not require a least 10,000 IT graduates enter Pakistan's prepare students for those pathways seekers in country but turnover of job in ICT is complete business ecosystem skillset. workforce each year. At the same time, adequately. Product development relies on a highest among other sectors. Globally it is ranked 3rd in terms of number of Pakistan also ranks much better in cost than workforce with more refined skill set, based freelancers engaged in software develop- Ÿ The country also lacks creativity in develop- lower-middle-income countries group. The on knowledge about product design, technol- ment and technology. However, freelancing ing innovative business models, regardless average annual cost of a software engineer in ogy and marketing. Pakistan is not able to is a low hanging fruit with a limited growth of how technically sound a product is. Pakistan is one fifth of the cost in USA and develop a niche in gaming (which is 80% of potential. Developing scalable business models is a Europe. However, of the total graduates, just the revenue of Google and Apple Store) first crucial step towards attracting large Ÿ Lack of local language IT education facilities, under a thousand graduates are products of because its workforce lacks knowledge sums of money or venture capital funds. books and digital material for skill develop- Tier 1 universities and of these around half about game development and design. ment is also a major hindrance in progress of meet the skills requirement for specialized Ÿ Government does not advertise digital the IT sector, as it reduces the talent pool that input needed by the industry. Ÿ Moreover, it needs creative minds that are marketing opportunities through PPRA could possibly enter the sector. able to come up with innovative solutions to website. Government's social media/digital Ÿ The tech industry relies on skills broadly of problems put forward by international clients. advertising is not open to competitive Ÿ Every year Pakistani universities produce a two kinds – technical / specialized skills to Basic software development only requires bidding. significant number of women graduates in IT develop and design IT products and skills to writing codes towards an end-goal already with flying grades, but somehow their develop innovative business models and Ÿ The challenges in supply deter growth of IT defined by the client and therefore, does not capabilities are not fully utilized in the IT marketing strategies. One without the other companies and thus they have to struggle enable/require the workforce to become workforce and their contributions are not will continue to constrain Pakistan's access with numerous problems to achieve targets creative. reflected in IT industry due to social mindsets. to a market for high value products. and win bigger projects. Lack of local projects Ÿ Most companies of Pakistan cannot afford for indigenous IT companies also constricts Ÿ Lack of affordable office space with quality Ÿ The academic path to becoming an IT international sales cost. Medium-sized the market and creates a non-conducive infrastructure hinders the growth of IT professional is not well defined; though there companies do not even have the training for environment for growth. companies and increases the cost of doing are degrees that qualify graduates as IT international tenders. business. Ÿ The academic merit for enrollment into Software Engineering and Computer Ÿ Hostile nations are actively and effectively Science degrees is relatively lower at using propaganda on a large scale to tarnish universities than other engineering disci- Pakistan's image globally. One such example plines; therefore, the intake of IT students at is India's Srivastava Group, running a universities is also of a relatively lower sophisticated network of 265 fake news standard. Due to lower merit, IT education is websites out of 65 countries to disseminate generally not a preferred choice of high propaganda against Pakistan. Pakistan on achieving college graduates. the other hand is neither countering such propaganda, nor exposing it, and also is not Ÿ The soft image of the country has been the carrying out an effective and coordinated most detrimental factor for the BPO and IT positive branding activities of its own. Call Centre businesses with respect to realizing business opportunities. Recommendations

Ÿ Young Pakistani entrepreneurs struggle to Ÿ The role of the government should be to develop their ideas from concept to products facilitate the promotion and growth of IT and services. At the same time, they are sector and not to regulate it. The red tape at unaware of how to operate a business in the Government level stifles the ability of the local market and how to attract foreign private sector to flourish. Thus, the govern-

59 60 not flourish without an adequate supply of graduates, the career pathways within the IT Ÿ ICT sector has the largest number of job investors. Pakistan has a thriving freelance skilled labor. Official statistics confirm that at sector are numerous and our degrees do not vacancies, although there are many job industry, which generally does not require a least 10,000 IT graduates enter Pakistan's prepare students for those pathways seekers in country but turnover of job in ICT is complete business ecosystem skillset. workforce each year. At the same time, adequately. Product development relies on a highest among other sectors. Globally it is ranked 3rd in terms of number of Pakistan also ranks much better in cost than workforce with more refined skill set, based freelancers engaged in software develop- Ÿ The country also lacks creativity in develop- lower-middle-income countries group. The on knowledge about product design, technol- ment and technology. However, freelancing ing innovative business models, regardless average annual cost of a software engineer in ogy and marketing. Pakistan is not able to is a low hanging fruit with a limited growth of how technically sound a product is. Pakistan is one fifth of the cost in USA and develop a niche in gaming (which is 80% of potential. Developing scalable business models is a Europe. However, of the total graduates, just the revenue of Google and Apple Store) first crucial step towards attracting large Ÿ Lack of local language IT education facilities, under a thousand graduates are products of because its workforce lacks knowledge sums of money or venture capital funds. books and digital material for skill develop- Tier 1 universities and of these around half about game development and design. ment is also a major hindrance in progress of meet the skills requirement for specialized Ÿ Government does not advertise digital the IT sector, as it reduces the talent pool that input needed by the industry. Ÿ Moreover, it needs creative minds that are marketing opportunities through PPRA could possibly enter the sector. able to come up with innovative solutions to website. Government's social media/digital Ÿ The tech industry relies on skills broadly of problems put forward by international clients. advertising is not open to competitive Ÿ Every year Pakistani universities produce a two kinds – technical / specialized skills to Basic software development only requires bidding. significant number of women graduates in IT develop and design IT products and skills to writing codes towards an end-goal already with flying grades, but somehow their develop innovative business models and Ÿ The challenges in supply deter growth of IT defined by the client and therefore, does not capabilities are not fully utilized in the IT marketing strategies. One without the other companies and thus they have to struggle enable/require the workforce to become workforce and their contributions are not will continue to constrain Pakistan's access with numerous problems to achieve targets creative. reflected in IT industry due to social mindsets. to a market for high value products. and win bigger projects. Lack of local projects Ÿ Most companies of Pakistan cannot afford for indigenous IT companies also constricts Ÿ Lack of affordable office space with quality Ÿ The academic path to becoming an IT international sales cost. Medium-sized the market and creates a non-conducive infrastructure hinders the growth of IT professional is not well defined; though there companies do not even have the training for environment for growth. companies and increases the cost of doing are degrees that qualify graduates as IT international tenders. business. Ÿ The academic merit for enrollment into Software Engineering and Computer Ÿ Hostile nations are actively and effectively Science degrees is relatively lower at using propaganda on a large scale to tarnish universities than other engineering disci- Pakistan's image globally. One such example plines; therefore, the intake of IT students at is India's Srivastava Group, running a universities is also of a relatively lower sophisticated network of 265 fake news standard. Due to lower merit, IT education is websites out of 65 countries to disseminate generally not a preferred choice of high propaganda against Pakistan. Pakistan on achieving college graduates. the other hand is neither countering such propaganda, nor exposing it, and also is not Ÿ The soft image of the country has been the carrying out an effective and coordinated most detrimental factor for the BPO and IT positive branding activities of its own. Call Centre businesses with respect to realizing business opportunities. Recommendations

59 60 supports, the government must introduce Serious prioritization by the government is users and from digital devices (e.g. IoT business friendly policies and relaxed needed to scale up new technologies. installed in public spaces). taxation. Challenges Ÿ Allow the data collected by digital devices Ÿ Support the creation of text to speech (IoT) to be used by local companies, agen- software for Urdu and regional/local lan- Ÿ Broadband penetration in Pakistan has cies, institutions and non-profits for research guages that can be used to enhance the increased in recent years but still, a large and development, by establishing an open utility of basic mobile phone-based text portion of the population is deprived of data portal/repository. messages as well as for normal computer internet services, especially in remote and Ÿ Restrict transfer of data collected and usage. rural areas of Pakistan. processed in Pakistan for commercial use, to Ÿ Pakistan must develop IT infrastructure, such Ÿ Pakistan has only 13 technology parks and a any third party outside Pakistan. Data as Special Technology Zones, ICT zones and few incubators. Even those that are available required to be disclosed to government of Tech Parks for cluster-based IT ecosystem lack funding and adequate infrastructure. another country shall be disclosed subject to development. Furthermore, there is a dire need to develop prior permission of the Government of forward and reverse linkages of the incuba- Pakistan. b. IT & Telecom Manufacturing, Conv- tors with industry. ergence, Research & Development and De- Ÿ Make it mandatory to disclose data gener- regulation ated in Pakistan, but stored in another ment needs to ease up controls on private Ÿ There is a lack of a digital ecosystem and a data-oriented mindset, leading to dated jurisdiction, as and when required by the sector and allow people to invest in Pakistan ICT plays a strong role not only in increasing practices, inefficiencies and missed capital- Government of Pakistan. and grow. It is the job of the private sector to productivity but also provides better living ization on generation and utilization of data provide funding and commercial access. standard, rapid increase in supply, improved Ÿ Allow sharing of community data with start- across sectors. Focus on liberalizing the regulatory frame- trade, advancement in infrastructure, low ups, especially social and creative enter- works so the people from private sector come wastages of energy resources, minimizing cost, prises for ventures initiated in public interest. Ÿ Research and Development have been low up and fulfill your needs. overcoming vicious circle of poverty, improving priority areas in Pakistan, in both public and Ÿ Ensure availability of Internet access across the quality of life etc. There is a pressure on Ÿ For the IT industry to grow, it is imperative that private sectors. Pakistan through effective implementation of developing countries to adopt appropriate Government in general and the regulating 2015 Telecom Policy. technology which is based upon the need for bodies in particular understand the difference Ÿ Lack of timeliness in adopting next genera- providing employment according to the stage of between industrial mindset and knowledge- tion technology. Ÿ Concerned ministries and departments must development and within the prevailing economic economy mindset. There is a sheer need of a regulate decisions and policies that have a policy framework of the country. Countries like Ÿ paradigm shift in the Government's Aversion to adoption and frequent banning of longer lifespan than the technology change USA, China, Malaysia and Japan have invested approach, which must result in formation of new technologies for fear of security con- curve for better governance. sufficiently in promoting emerging technologies favorable policies for the IT and ITeS sectors. cerns. over the past decade and are the ones that have Ÿ Ministries must initiate the regulation of ICT Ÿ International PR agencies should be hired by developed successfully in this sector. India is Recommendations through natural capacity building for higher the Government for a comprehensive PR also thriving in the technology industry and velocity and gauged IT experts working Ÿ Digitalization of governance and automation campaign to improve the country's soft image successfully established its version of Silicon abroad for enhancing higher HR-led quality of public sector business processes to all over the world in respect to favorable IT Valley in Bangalore and provides special exports. develop a digital ecosystem. investment and outsourcing opportunities. rebates and incentives, tax holidays and other Ÿ Develop IT-led ecosystem in Pakistan The government must focus on both, building facilities to their local industries related to Ÿ Establish Pakistan's sovereign ownership through long term learning lifecycles that has a positive brand for Pakistan; and research- technology. They have been striving hard for the over the data generated in Pakistan. to be more informed and inter-connected. ing, exposing and countering anti-Pakistan last 20 years and invested in this sector of economy through R&D activities. In comparison, Ÿ Create of a legal and technological frame- propaganda being spread by adversaries. Ÿ A recommendation to improve the poor- Pakistan is lagging behind in terms of invest- work to put a statutory bar on cross border quality internet service is by reducing barriers Ÿ To protect the industry and employment it ment and facilitation for the technology industry. flow of data generated in Pakistan by internet

61 62 supports, the government must introduce Serious prioritization by the government is users and from digital devices (e.g. IoT business friendly policies and relaxed needed to scale up new technologies. installed in public spaces). taxation. Challenges Ÿ Allow the data collected by digital devices Ÿ Support the creation of text to speech (IoT) to be used by local companies, agen- software for Urdu and regional/local lan- Ÿ Broadband penetration in Pakistan has cies, institutions and non-profits for research guages that can be used to enhance the increased in recent years but still, a large and development, by establishing an open utility of basic mobile phone-based text portion of the population is deprived of data portal/repository. messages as well as for normal computer internet services, especially in remote and Ÿ Restrict transfer of data collected and usage. rural areas of Pakistan. processed in Pakistan for commercial use, to Ÿ Pakistan must develop IT infrastructure, such Ÿ Pakistan has only 13 technology parks and a any third party outside Pakistan. Data as Special Technology Zones, ICT zones and few incubators. Even those that are available required to be disclosed to government of Tech Parks for cluster-based IT ecosystem lack funding and adequate infrastructure. another country shall be disclosed subject to development. Furthermore, there is a dire need to develop prior permission of the Government of forward and reverse linkages of the incuba- Pakistan. b. IT & Telecom Manufacturing, Conv- tors with industry. ergence, Research & Development and De- Ÿ Make it mandatory to disclose data gener- regulation ated in Pakistan, but stored in another ment needs to ease up controls on private Ÿ There is a lack of a digital ecosystem and a data-oriented mindset, leading to dated jurisdiction, as and when required by the sector and allow people to invest in Pakistan ICT plays a strong role not only in increasing practices, inefficiencies and missed capital- Government of Pakistan. and grow. It is the job of the private sector to productivity but also provides better living ization on generation and utilization of data provide funding and commercial access. standard, rapid increase in supply, improved Ÿ Allow sharing of community data with start- across sectors. Focus on liberalizing the regulatory frame- trade, advancement in infrastructure, low ups, especially social and creative enter- works so the people from private sector come wastages of energy resources, minimizing cost, prises for ventures initiated in public interest. Ÿ Research and Development have been low up and fulfill your needs. overcoming vicious circle of poverty, improving priority areas in Pakistan, in both public and Ÿ Ensure availability of Internet access across the quality of life etc. There is a pressure on Ÿ For the IT industry to grow, it is imperative that private sectors. Pakistan through effective implementation of developing countries to adopt appropriate Government in general and the regulating 2015 Telecom Policy. technology which is based upon the need for bodies in particular understand the difference Ÿ Lack of timeliness in adopting next genera- providing employment according to the stage of between industrial mindset and knowledge- tion technology. Ÿ Concerned ministries and departments must development and within the prevailing economic economy mindset. There is a sheer need of a regulate decisions and policies that have a policy framework of the country. Countries like Ÿ paradigm shift in the Government's Aversion to adoption and frequent banning of longer lifespan than the technology change USA, China, Malaysia and Japan have invested approach, which must result in formation of new technologies for fear of security con- curve for better governance. sufficiently in promoting emerging technologies favorable policies for the IT and ITeS sectors. cerns. over the past decade and are the ones that have Ÿ Ministries must initiate the regulation of ICT Ÿ International PR agencies should be hired by developed successfully in this sector. India is Recommendations through natural capacity building for higher the Government for a comprehensive PR also thriving in the technology industry and velocity and gauged IT experts working Ÿ Digitalization of governance and automation campaign to improve the country's soft image successfully established its version of Silicon abroad for enhancing higher HR-led quality of public sector business processes to all over the world in respect to favorable IT Valley in Bangalore and provides special exports. develop a digital ecosystem. investment and outsourcing opportunities. rebates and incentives, tax holidays and other Ÿ Develop IT-led ecosystem in Pakistan The government must focus on both, building facilities to their local industries related to Ÿ Establish Pakistan's sovereign ownership through long term learning lifecycles that has a positive brand for Pakistan; and research- technology. They have been striving hard for the over the data generated in Pakistan. to be more informed and inter-connected. ing, exposing and countering anti-Pakistan last 20 years and invested in this sector of economy through R&D activities. In comparison, Ÿ Create of a legal and technological frame- propaganda being spread by adversaries. Ÿ A recommendation to improve the poor- Pakistan is lagging behind in terms of invest- work to put a statutory bar on cross border quality internet service is by reducing barriers Ÿ To protect the industry and employment it ment and facilitation for the technology industry. flow of data generated in Pakistan by internet

61 62 to entry for as many ISPs to enter the market c. Software Export limited or no product orientation, as they According to the Pakistan Software Export and let competition drive up the quality and generated revenues only from low value-added Board, there are more than 3000 active IT/ITeS lower prices. It is further recommended to General services (e.g. call centers), according to a study companies, which possess expertise in custom Government to remove taxes on ISPs. of SBP in 2019. software development, enterprise resource The exports of IT and IT-related services planning (ERP), financial solutions, mobile Ÿ increased to $1.090 billion in the financial year Ensure timely adoption of 5G technologies by According to the industry experts, the domi- content, document management, enterprise 2018-19 as compared to $1.065 billion recorded incentivizing investment in this sector, and nance of low value-added services is not computing, and business process outsourcing in the financial year 2017-18, showing a modest avoid relatively delayed rollout as was the favorable for the country on a sustainable basis, (BPO). case with 3G and 4G in Pakistan. growth of 2.44%, according to data released by particularly from foreign exchange generation the State Bank of Pakistan. This is the third point of view. The average receipts from soft- Ÿ Timely capitalization of IoT by expediting consecutive record of the IT industry for attaining ware exports including software consultancy frequency allocation. an all-time high. The country also achieved the were more than double the average receipts highest value of IT remittances during the from other ICT exports. Therefore, it is not Ÿ Adopt the European and American model of financial year 2018-19. The value of IT exports is surprising to see that only 56 firms had exports of free IoT frequency to open up the market for three times higher than the remittances reported $2 million and above on an annual basis, as an IoT based solutions across industries. by the central bank, which means the overall overwhelming majority of firms could not even number crossed $3 billion in the financial year Ÿ End the practice of restricting / banning new fetch US$ 0.1 million receipts during the financial 2019. As for the sector's composition, export technology for fear of security implications, year. The majority of the IT-based exports are to revenues of 35% or nearly $355 million of the and focus on educating themselves on the US market (60%). It is followed by European total 3,228 ICT exporting entities came from relevant security measures and safe / countries with a total of 38% share, and exports computer software, including software consul- controlled adoption. to the Middle Eastern countries stand at number tancy services. Whereas, the rest had either three. Challenges

Although the potential is immense, more needs The Breakup of IT industry Exports of to be done and there is an immediate require- Services and Products ment for local companies to increase their capacity through collaboration and integration to develop core strengths at a national level.

Recommendations

Ÿ Events like ITCN Asia could prove to be a catalyst. There is a dire need for events that can steer intellectual discussions and help bring the entire ecosystem under one roof.

Ÿ Ease of doing business should be the top priority for the Government through policy making and relevant legislation.

Ÿ Sales tax waiver on local software products to promote local products/IP development and innovation.

Ÿ Creation of online complaint/support cell at relevant ministries, departments catering to the needs of the IT industry.

63 64 to entry for as many ISPs to enter the market c. Software Export limited or no product orientation, as they According to the Pakistan Software Export and let competition drive up the quality and generated revenues only from low value-added Board, there are more than 3000 active IT/ITeS lower prices. It is further recommended to General services (e.g. call centers), according to a study companies, which possess expertise in custom Government to remove taxes on ISPs. of SBP in 2019. software development, enterprise resource The exports of IT and IT-related services planning (ERP), financial solutions, mobile Ÿ increased to $1.090 billion in the financial year Ensure timely adoption of 5G technologies by According to the industry experts, the domi- content, document management, enterprise 2018-19 as compared to $1.065 billion recorded incentivizing investment in this sector, and nance of low value-added services is not computing, and business process outsourcing in the financial year 2017-18, showing a modest avoid relatively delayed rollout as was the favorable for the country on a sustainable basis, (BPO). case with 3G and 4G in Pakistan. growth of 2.44%, according to data released by particularly from foreign exchange generation the State Bank of Pakistan. This is the third point of view. The average receipts from soft- Ÿ Timely capitalization of IoT by expediting consecutive record of the IT industry for attaining ware exports including software consultancy frequency allocation. an all-time high. The country also achieved the were more than double the average receipts highest value of IT remittances during the from other ICT exports. Therefore, it is not Ÿ Adopt the European and American model of financial year 2018-19. The value of IT exports is surprising to see that only 56 firms had exports of free IoT frequency to open up the market for three times higher than the remittances reported $2 million and above on an annual basis, as an IoT based solutions across industries. by the central bank, which means the overall overwhelming majority of firms could not even number crossed $3 billion in the financial year Ÿ End the practice of restricting / banning new fetch US$ 0.1 million receipts during the financial 2019. As for the sector's composition, export technology for fear of security implications, year. The majority of the IT-based exports are to revenues of 35% or nearly $355 million of the and focus on educating themselves on the US market (60%). It is followed by European total 3,228 ICT exporting entities came from relevant security measures and safe / countries with a total of 38% share, and exports computer software, including software consul- controlled adoption. to the Middle Eastern countries stand at number tancy services. Whereas, the rest had either three. Challenges

Recommendations

Ÿ Events like ITCN Asia could prove to be a catalyst. There is a dire need for events that can steer intellectual discussions and help bring the entire ecosystem under one roof.

Ÿ Ease of doing business should be the top priority for the Government through policy making and relevant legislation.

Ÿ Sales tax waiver on local software products to promote local products/IP development and innovation.

Ÿ Creation of online complaint/support cell at relevant ministries, departments catering to the needs of the IT industry.

63 64 Ÿ PSEB should launch a program to subsi- but tangible and economic contributions for Commerce startups. There is a dire need for levied both at Federal and Provincial level. dize companies directly for their participa- these incubators will take time to materialize. Pakistani venture capitalists and angel investors Each province has its own revenue authority tion in any events in their pre-approved Pakistan, home to more than 200 million people, to invest in these cross-border E-Commerce that administers sales tax on services and list. For example, the subsidy could be is one of the fastest growing economies in Asia. exporting startups. Pakistan is cited as one of other provincial duties. The recent federal tax 70% of the total cost and maybe capped at As the country continues to develop, an addi- the top destinations for outsourcing business, exemption for tech start-ups is only applica- 10% of total reported exports earnings of tional 2.1 million middle-income households are but the country has not been able to attract ble at the federal level, many perceived it as the company. expected to be established by 2025. Connect- foreign investors. an all-round exception. ivity is also increasing with the number of 3G/4G d. Incentivizing IT Investment and Challenges Ÿ Start-ups are currently taxed on revenue subscribers rising four-fold in the last three years Technology Enabled Businesses rather than profits, which create a common and demand for digital services clearly expand- Ÿ Entrepreneurial activities are on the rise in misconception that start-ups do not qualify ing the country's E-Commerce market is upbeat. Ease and Cost of Doing Business in ICT Pakistan, with an increasing trend in new for corporate income tax because they are Consequently, startup activity has surged as Domestic Market. (Annex K) Innovation is a organizations, funds and initiatives support- not profitable up until a certain point in their major driver of economic transformation and businesses emerge to satisfy unmet demand ing entrepreneurs. The fundamental problem lifecycle. development. Enabling and fostering innovation across the country. Many E-Commerce startups for the enabling environment is lack of has long been considered a core strategic goal have come up over the years in Pakistan, successful exits, local investors not ready to Ÿ While Pakistan's digital start-up landscape of economic policy in more advanced econo- disrupting the status quo, thanks to tech incuba- exit and foreign investors are also not willing has grown significantly in the recent years, mies, and is receiving increasing attention in tors across Pakistan such as the Nest I/O and to come in. the ecosystem has its share of challenges, most developing countries. Startups are the IBA CED. However, what is lacking is a startup particularly when it comes to regulations and Ÿ Due to a complex mix of image, legal, building blocks of the knowledge economy. that increases E-Commerce exports. The access to early-stage capital. commercial and IP related issues, compa- Pakistan has recently established some government should create a tech incubator that nies set up their primary offices offshore and Ÿ Comparison with the Neighbors. Over the incubators across the major cities in the country, solely focuses on creating cross-border E- undertake operational business activities in past five years, (2015-19), there were a total Pakistan. of 101 venture capital deals of Pakistan- based companies' worth over $165 million Ÿ Companies usually face problems with visa which were raised by 82 companies. While applications, processes and approvals. this is encouraging, Pakistan still has a long Pakistani passport seriously limits the ability way to go compared to its neighbors in South of management personnel to travel interna- Asia. Based on a score given to the number tionally. of venture capital deals per year in 2019, Pakistan ranked 72, which was behind India Ÿ Internet black-out, partial application level (30) and Sri Lanka (45) but was higher than restrictions and access blockage under Bangladesh (73). While local venture capital security pretexts. funds are not incentivized to invest their Ÿ There is a lack of an efficient taxation process funds inside Pakistan, foreign investors also which increases the time and resources need incentives to enter and invest in start- spent by entrepreneurs and investors in ups in the country. This, in addition to the undertaking non-core activities. Easy stringency and complexity of the regulatory implementation of laws and ordinances is processes, poses a serious challenge to all required (e.g. those related to cash stakeholders in the ecosystem. reward/bonuses, foreign currency repatria- Ÿ Business Environment Needs to Be Impr- tion, and payroll taxes etc.) oved. Local venture capital funds are not Ÿ Taxation for IT business is different from incentivized to domicile their funds inside province to province, and some taxes are Pakistan. Foreign investors also need to be

65 66 Ÿ PSEB should launch a program to subsi- but tangible and economic contributions for Commerce startups. There is a dire need for levied both at Federal and Provincial level. dize companies directly for their participa- these incubators will take time to materialize. Pakistani venture capitalists and angel investors Each province has its own revenue authority tion in any events in their pre-approved Pakistan, home to more than 200 million people, to invest in these cross-border E-Commerce that administers sales tax on services and list. For example, the subsidy could be is one of the fastest growing economies in Asia. exporting startups. Pakistan is cited as one of other provincial duties. The recent federal tax 70% of the total cost and maybe capped at As the country continues to develop, an addi- the top destinations for outsourcing business, exemption for tech start-ups is only applica- 10% of total reported exports earnings of tional 2.1 million middle-income households are but the country has not been able to attract ble at the federal level, many perceived it as the company. expected to be established by 2025. Connect- foreign investors. an all-round exception. ivity is also increasing with the number of 3G/4G d. Incentivizing IT Investment and Challenges Ÿ Start-ups are currently taxed on revenue subscribers rising four-fold in the last three years Technology Enabled Businesses rather than profits, which create a common and demand for digital services clearly expand- Ÿ Entrepreneurial activities are on the rise in misconception that start-ups do not qualify ing the country's E-Commerce market is upbeat. Ease and Cost of Doing Business in ICT Pakistan, with an increasing trend in new for corporate income tax because they are Consequently, startup activity has surged as Domestic Market. (Annex K) Innovation is a organizations, funds and initiatives support- not profitable up until a certain point in their major driver of economic transformation and businesses emerge to satisfy unmet demand ing entrepreneurs. The fundamental problem lifecycle. development. Enabling and fostering innovation across the country. Many E-Commerce startups for the enabling environment is lack of has long been considered a core strategic goal have come up over the years in Pakistan, successful exits, local investors not ready to Ÿ While Pakistan's digital start-up landscape of economic policy in more advanced econo- disrupting the status quo, thanks to tech incuba- exit and foreign investors are also not willing has grown significantly in the recent years, mies, and is receiving increasing attention in tors across Pakistan such as the Nest I/O and to come in. the ecosystem has its share of challenges, most developing countries. Startups are the IBA CED. However, what is lacking is a startup particularly when it comes to regulations and Ÿ Due to a complex mix of image, legal, building blocks of the knowledge economy. that increases E-Commerce exports. The access to early-stage capital. commercial and IP related issues, compa- Pakistan has recently established some government should create a tech incubator that nies set up their primary offices offshore and Ÿ Comparison with the Neighbors. Over the incubators across the major cities in the country, solely focuses on creating cross-border E- undertake operational business activities in past five years, (2015-19), there were a total Pakistan. of 101 venture capital deals of Pakistan- based companies' worth over $165 million Ÿ Companies usually face problems with visa which were raised by 82 companies. While applications, processes and approvals. this is encouraging, Pakistan still has a long Pakistani passport seriously limits the ability way to go compared to its neighbors in South of management personnel to travel interna- Asia. Based on a score given to the number tionally. of venture capital deals per year in 2019, Pakistan ranked 72, which was behind India Ÿ Internet black-out, partial application level (30) and Sri Lanka (45) but was higher than restrictions and access blockage under Bangladesh (73). While local venture capital security pretexts. funds are not incentivized to invest their Ÿ There is a lack of an efficient taxation process funds inside Pakistan, foreign investors also which increases the time and resources need incentives to enter and invest in start- spent by entrepreneurs and investors in ups in the country. This, in addition to the undertaking non-core activities. Easy stringency and complexity of the regulatory implementation of laws and ordinances is processes, poses a serious challenge to all required (e.g. those related to cash stakeholders in the ecosystem. reward/bonuses, foreign currency repatria- Ÿ Business Environment Needs to Be Impr- tion, and payroll taxes etc.) oved. Local venture capital funds are not Ÿ Taxation for IT business is different from incentivized to domicile their funds inside province to province, and some taxes are Pakistan. Foreign investors also need to be

65 66 provided with further incentives to enter and since year 2013, been discouraged at the invest in start-ups in the country. This, in Government Policy level. addition to the stringency and complexity of Ÿ the regulatory processes, poses a serious In Pakistan, importing, selling and us- challenge to all stakeholders in the ecosys- ing a 3D Printer require NOC from Mini- tem. The result is a lack of access to capital stry of the Interior, Islamabad and Sec- urity Agencies. However, the NOC app- for innovators and entrepreneurs. lications are almost always rejected. Ÿ There is a critical lack of legal support, with Ÿ Our Defence Production industry and its ve- respect to commercial, international and ndors are also not exempted. The restric- corporate law, available to local IT compa- tion on using 3D Printers is against the nies. Progressive policy of the Government. Ÿ At the procedural level, there is little in terms Recommendations of automation of business processes and mostly business-related procedures are Ÿ Despite improvements on Ease of Doing performed manually, which increase uncer- Business (EODB) index, massive, costly tainty in trade and investment operations. and time-consuming business regulations at the federal, provincial and local level still Ÿ Government projects are mostly undertaken appear to be the major stumbling block in the by government owned organizations or way of attracting the foreign direct investment otherwise outsourced to the international (FDIs) and businesses to flourish. To achieve companies. Local ecosystem is not trusted usefulness of all business regulation and Ÿ Exemption of payroll taxes for employees the substantial FDI inflows and helps thrive with large-scale projects, hence limiting their eliminate unnecessary regulations, docu- who are working at a startup for a period of 3- the businesses, especially the small enter- growth prospects. mentation and compliance requirements. 5 years. prises, the government needs to rationalize Ÿ Government organizations such as the the excessive business regulations. Ÿ There is a need to automate the compliance Ÿ Easier process by SECP for startups to offer PRAL, Ufone etc. tend to compete with with business regulation and ensuring e- stock options to employees. Ÿ PSEB should invite and host international private IT companies in a bid to show payments of all relevant charges. speakers/presenters for visit on different Ÿ self-reliance. Such a competition is rea- Exemption for startups from various regula- occasions, with focus on advising the local lly unfair and detrimental for private Ÿ Need for research at sector level and what tory compliances and audits for an initial industry in increasing their share in the global businesses. Public sector entities should be difficulties each sector faces in registration period of 3 years – this would include Labor IT export market. Also, it should organize prohibited from bidding for private sector ICT and licensing, and operations at provincial Department, EOBI, FBR, Social Security etc. events of international scope in which foreign projects. with an additional 2-year exemption following companies can participate. This will lead to and local levels. a simple self-declaration or until the startup better country image, increased exports and Ÿ 3D printing technology has revolution- Ÿ Government should establish a venture size grows to 30+ employees. more foreign investments in the country. ized global Product development indu- capital firm to support, incubate, accelerate stry. 3D printing is the future of Manu- Ÿ Reduced Capital Gains tax from the pro- Ÿ Development of an online portal where the and fund start-ups and accelerate the facturing Industry. It encompasses the ceeds of investments made in startups. government should ensure the provision of mushrooming growth of big start-ups. industries like Medical, Bio-Technology, inventory of all the regulations and laws at Ÿ Remove barriers to entry for venture capitals Sports, Jewelry, Auto parts, Aircraft, Dental, one place (sector wise), which can be easily Ÿ Exemption, full or partial, from various taxes and angel investors. Industrial, Medicine, Architecture, Constru- accessible to businesses and investors. (WHT, GST, Corporate Income Tax, E- ction, Tool making, Arts and Education of Commerce or Digital taxes) for a period of 5 Ÿ Tax exemption for angels and investors on aforementioned technologies. Unfortunately, Ÿ In consultation with stakeholders, the gove- years to provide an initial launch pad to the IT funds dedicated for investment in startups in Pakistan, 3D printing technology has, rnment should validate the relevance and sector led economy expansion drive. either through incubators, accelerators or

67 68 provided with further incentives to enter and since year 2013, been discouraged at the invest in start-ups in the country. This, in Government Policy level. addition to the stringency and complexity of Ÿ the regulatory processes, poses a serious In Pakistan, importing, selling and us- challenge to all stakeholders in the ecosys- ing a 3D Printer require NOC from Mini- tem. The result is a lack of access to capital stry of the Interior, Islamabad and Sec- urity Agencies. However, the NOC app- for innovators and entrepreneurs. lications are almost always rejected. Ÿ There is a critical lack of legal support, with Ÿ Our Defence Production industry and its ve- respect to commercial, international and ndors are also not exempted. The restric- corporate law, available to local IT compa- tion on using 3D Printers is against the nies. Progressive policy of the Government. Ÿ At the procedural level, there is little in terms Recommendations of automation of business processes and mostly business-related procedures are Ÿ Despite improvements on Ease of Doing performed manually, which increase uncer- Business (EODB) index, massive, costly tainty in trade and investment operations. and time-consuming business regulations at the federal, provincial and local level still Ÿ Government projects are mostly undertaken appear to be the major stumbling block in the by government owned organizations or way of attracting the foreign direct investment otherwise outsourced to the international (FDIs) and businesses to flourish. To achieve companies. Local ecosystem is not trusted usefulness of all business regulation and Ÿ Exemption of payroll taxes for employees the substantial FDI inflows and helps thrive with large-scale projects, hence limiting their eliminate unnecessary regulations, docu- who are working at a startup for a period of 3- the businesses, especially the small enter- growth prospects. mentation and compliance requirements. 5 years. prises, the government needs to rationalize Ÿ Government organizations such as the the excessive business regulations. Ÿ There is a need to automate the compliance Ÿ Easier process by SECP for startups to offer PRAL, Ufone etc. tend to compete with with business regulation and ensuring e- stock options to employees. Ÿ PSEB should invite and host international private IT companies in a bid to show payments of all relevant charges. speakers/presenters for visit on different Ÿ self-reliance. Such a competition is rea- Exemption for startups from various regula- occasions, with focus on advising the local lly unfair and detrimental for private Ÿ Need for research at sector level and what tory compliances and audits for an initial industry in increasing their share in the global businesses. Public sector entities should be difficulties each sector faces in registration period of 3 years – this would include Labor IT export market. Also, it should organize prohibited from bidding for private sector ICT and licensing, and operations at provincial Department, EOBI, FBR, Social Security etc. events of international scope in which foreign projects. with an additional 2-year exemption following companies can participate. This will lead to and local levels. a simple self-declaration or until the startup better country image, increased exports and Ÿ 3D printing technology has revolution- Ÿ Government should establish a venture size grows to 30+ employees. more foreign investments in the country. ized global Product development indu- capital firm to support, incubate, accelerate stry. 3D printing is the future of Manu- Ÿ Reduced Capital Gains tax from the pro- Ÿ Development of an online portal where the and fund start-ups and accelerate the facturing Industry. It encompasses the ceeds of investments made in startups. government should ensure the provision of mushrooming growth of big start-ups. industries like Medical, Bio-Technology, inventory of all the regulations and laws at Ÿ Remove barriers to entry for venture capitals Sports, Jewelry, Auto parts, Aircraft, Dental, one place (sector wise), which can be easily Ÿ Exemption, full or partial, from various taxes and angel investors. Industrial, Medicine, Architecture, Constru- accessible to businesses and investors. (WHT, GST, Corporate Income Tax, E- ction, Tool making, Arts and Education of Commerce or Digital taxes) for a period of 5 Ÿ Tax exemption for angels and investors on aforementioned technologies. Unfortunately, Ÿ In consultation with stakeholders, the gove- years to provide an initial launch pad to the IT funds dedicated for investment in startups in Pakistan, 3D printing technology has, rnment should validate the relevance and sector led economy expansion drive. either through incubators, accelerators or

67 68 through venture and angel funds. Ÿ Instead of restricting import and sale of 3D (excluding unicorns) raised over $274 million process of licensing of companies and tax printers, policy should be made to "Obtain in 2018. regulations by FBR. Ÿ Government should launch a credit guaran- NOC for making 3D Printed Firearm". (This is tee scheme for startups, for collateral-free, Ÿ Regulations make it cumbersome to set up a Ÿ The Digital Policy recently announced, must in vogue in many countries) fund and non-fund-based credit support for at fund inside Pakistan. be supplemented with a plan of action, with least 10,000 startups in 5 years. Ÿ 3D printing techniques be included in the short to medium to long term plans on how Ÿ Regulations make it hard to take invested syllabi of Middle to High Schools all over the core set of objectives can be achieved Ÿ Private sector should be encouraged to set money or profits out of the country. Pakistan. This will result in upbringing of with assignment of responsibilities across up corporate incubators like HBL and UBL better Engineers and Designers of future. Ÿ various stakeholders. have set up innovation labs. Similarly, all Global venture capital investors find the process of investing, having shares issued Ÿ telecom operators and Chambers of Inefficient Allocation of Resources / Initiatives for the promotion of incentivisation Commerce can do so as well. and registered riddled with red tape. of tax payment must be strengthened. Domestic Spending for ICT Sector Approvals are required from various govern- Ÿ Government should set up a separate fund ment departments such as the Securities and Expected Impact of Development of ICT Challenges or leverage Ignite's fund for seed money to Exchange Commission of Pakistan, Industry be given to incubators for investing in Ÿ Access to funding is a significant bottleneck. Competition Commission of Pakistan and Overcoming the highlighted key challenges is startups, partners like WB, DFID, SiDA or There is only $0.06 per capita of venture State Bank. This would put off anyone who imperative for a meaningful growth rate of others can come on board to create multi capital money in Pakistan per year, while has the option to invest elsewhere in the Pakistan's ICT Industry. donor fund as well. This fund should also Bangladesh has $0.07, Nigeria $0.18 and world. Due to over-regulation, investment help startups to file for international patents funds choose to operate from outside of India $3. In 2017, only nine Pakistani startups Ÿ Establishment of Special Technology Zones where the Government bears the cost for Pakistan. received venture capital funding compared to will lead to private sector investments and such IP filing. 34 in Nigeria, 38 in the UAE and approxi- Ÿ Foreign payments are heavily regulated and encourage industry-academia collaboration. Ÿ Policy of obtaining NOC for Import and sale of mately 790 in India. Overall, Pakistan's tech offered at unfavorable exchange rates. Ÿ Digitalization of governance will increase 3D Printer of any kind from The Ministry of startups raised under $30 million in 2018 Pakistani startups prefer to route foreign efficiency, transparency and accountability, Interior may be reconsidered and abolished. compared to countries such as Indonesia funding using alternative means (such as along with being corruption-resistant. register the company abroad) or keep the funds overseas. Ÿ Reduced barriers to entry for Venture Capitals and Angel Investors will increase Ÿ Lack of recognized international payment FDI and facilitate the journey towards gateways especially impacts smaller Pakistan-based Unicorns. businesses as larger players rely on banking channels for their transactions. Absence of recognized payment gateways such as PayPal also make it difficult for new clients to trust young entrepreneurs, whether individuals or companies.

Recommendations

Ÿ Steps to be taken by government departments for smooth approval of companies and ease of doing business in Pakistan to motivate start-ups.

Ÿ Initiatives by the Government to smooth the

69 70 through venture and angel funds. Ÿ Instead of restricting import and sale of 3D (excluding unicorns) raised over $274 million process of licensing of companies and tax printers, policy should be made to "Obtain in 2018. regulations by FBR. Ÿ Government should launch a credit guaran- NOC for making 3D Printed Firearm". (This is tee scheme for startups, for collateral-free, Ÿ Regulations make it cumbersome to set up a Ÿ The Digital Policy recently announced, must in vogue in many countries) fund and non-fund-based credit support for at fund inside Pakistan. be supplemented with a plan of action, with least 10,000 startups in 5 years. Ÿ 3D printing techniques be included in the short to medium to long term plans on how Ÿ Regulations make it hard to take invested syllabi of Middle to High Schools all over the core set of objectives can be achieved Ÿ Private sector should be encouraged to set money or profits out of the country. Pakistan. This will result in upbringing of with assignment of responsibilities across up corporate incubators like HBL and UBL better Engineers and Designers of future. Ÿ various stakeholders. have set up innovation labs. Similarly, all Global venture capital investors find the process of investing, having shares issued Ÿ telecom operators and Chambers of Inefficient Allocation of Resources / Initiatives for the promotion of incentivisation Commerce can do so as well. and registered riddled with red tape. of tax payment must be strengthened. Domestic Spending for ICT Sector Approvals are required from various govern- Ÿ Government should set up a separate fund ment departments such as the Securities and Expected Impact of Development of ICT Challenges or leverage Ignite's fund for seed money to Exchange Commission of Pakistan, Industry be given to incubators for investing in Ÿ Access to funding is a significant bottleneck. Competition Commission of Pakistan and Overcoming the highlighted key challenges is startups, partners like WB, DFID, SiDA or There is only $0.06 per capita of venture State Bank. This would put off anyone who imperative for a meaningful growth rate of others can come on board to create multi capital money in Pakistan per year, while has the option to invest elsewhere in the Pakistan's ICT Industry. donor fund as well. This fund should also Bangladesh has $0.07, Nigeria $0.18 and world. Due to over-regulation, investment help startups to file for international patents funds choose to operate from outside of India $3. In 2017, only nine Pakistani startups Ÿ Establishment of Special Technology Zones where the Government bears the cost for Pakistan. received venture capital funding compared to will lead to private sector investments and such IP filing. 34 in Nigeria, 38 in the UAE and approxi- Ÿ Foreign payments are heavily regulated and encourage industry-academia collaboration. Ÿ Policy of obtaining NOC for Import and sale of mately 790 in India. Overall, Pakistan's tech offered at unfavorable exchange rates. Ÿ Digitalization of governance will increase 3D Printer of any kind from The Ministry of startups raised under $30 million in 2018 Pakistani startups prefer to route foreign efficiency, transparency and accountability, Interior may be reconsidered and abolished. compared to countries such as Indonesia funding using alternative means (such as along with being corruption-resistant. register the company abroad) or keep the funds overseas. Ÿ Reduced barriers to entry for Venture Capitals and Angel Investors will increase Ÿ Lack of recognized international payment FDI and facilitate the journey towards gateways especially impacts smaller Pakistan-based Unicorns. businesses as larger players rely on banking channels for their transactions. Absence of recognized payment gateways such as PayPal also make it difficult for new clients to trust young entrepreneurs, whether individuals or companies.

Recommendations

Ÿ Steps to be taken by government departments for smooth approval of companies and ease of doing business in Pakistan to motivate start-ups.

Ÿ Initiatives by the Government to smooth the

69 70 PART USE OF EMERGING ICT TOOLS IN SOCIO ECONOMIC SECTORS V PART USE OF EMERGING ICT TOOLS IN SOCIO ECONOMIC SECTORS V Use of Emerging ICT Tools in Socio-Economic Sectors

General ing human capital development. Current political opportunities by increasing process efficiency, 2.33% to the agriculture's contribution to the commitments also indicate that policymakers of promoting participation in economic activities GDP. Digitalization, automation and other IT led ICTs are projected as dynamic solutions for Pakistan are realizing the potentials of ICTs and and networks, and creating more opportunities interventions provide many gains not within a socio-economic development and extensively roles they play in advancing society. A strong for employment and business. given sector but across sectors and industries, in utilized in the developed countries. ICTs are desire for developing a vibrant ICT infrastructure both social and economic aspects. Agriculture, enabling pivotal transformations in Pakistan as to enable socio-economic development exists in a. E- Agriculture being a key contributor to Pakistan's economy, well by becoming a key element in economic and Pakistan and in order to develop ICT-sensitive has a lot to gain through sectoral digitalization social development. Modern ICTs enable socio- infrastructure and utilize it for advancing society, Pakistan's agriculture accounts for about 19.5% and collaborations. ICT in Agriculture or Digital economic development through enhancing civic it is essential to have a set of policies and the Gross Domestic Product (GDP) and Agriculture focuses on the enhancement of engagement, providing access to information, strategies that are socially rooted and contextu- employs about 43.5% of the labor force. Out of agricultural and rural development through and knowledge in the development endeavors. ally fit. In Pakistan ICT can contribute to income the 19.5% being contributed to the GDP, major improved information and communication This can help in boosting overall economic generation and poverty alleviation. It enables crops contribute 26.19%, other crops 11.03%, processes. Many ICT interventions have been prospects by raising production and encourag- people and enterprises to capture economic livestock 58.33%, fisheries 2.12%, and forestry developed and tested around the world, with

73 74 Use of Emerging ICT Tools in Socio-Economic Sectors

73 74 varied degrees of success, to help agriculturists ground water because of prevalent irrigation holders. Technologies such as IoT enabled Ÿ Inadequate Access to the Inputs and improve their livelihoods through increased practices. More than 90% ground water groundwater / soil moisture / soil pH sensors, Marketplace. Pakistan loses on selling agricultural productivity and incomes, and resource is used for irrigation purpose in automated water pumping techniques, data to export markets due to the lack of the reduction in risks. Similarly, Pakistan is on the Pakistan. There is a very high dependency analytics driven farming decision support proper grading, testing, and packaging journey of digitalizing different aspects of on groundwater to meet irrigation demands systems are not being employed at scale in while produce itself is of international sectoral value chains for delivering better yet it is managed very poorly leading to Pakistan's agriculture sector. market quality. Pakistan's agricultural services to the farmers and improving liveli- extreme groundwater depletion in Pakistan. produce is often re-packaged and re- hoods. Ÿ Farm Management. Farm management branded by the third parties and exported to Ÿ Eco-system. Currently, the agriculture sec- and water wastages are a critical challenge western markets. Other issues including Challenges tor landscape requires a change in mindset for farmers. On average, it is estimated that warehousing, logistics, ensuring standard- for both policy development and implementa- 35% irrigation water is wasted. Poor water- ized outputs and selling those outputs to Ÿ Water Wastages. Water usage has been tion. The governmental app-0roach doesn't use efficiency is primarily due to utilization of connected markets also need to be looked growing globally at more than twice the rate fully utilize the potential of public private obsolete techniques like flood irrigation, into. of population increase in last century, and an partnerships and the benefits of capacity which not only create waste but are unsuit- increasing number of regions are reaching building. The private companies haven't able for various type of crops. Pakistan is Ÿ Credit and Financing. There is a huge the limit at which water services can be been able to fully lend their core competen- becoming water scarce because of water challenge of credit and financing to sustainably delivered, especially in arid cies and agility to help support the public wastage. small farmers. The ever-fluctuating mar- regions according to UN Water Facts. On sector in the execution and scalability of ket prices and unpredictable weather average, it takes one liter of water to satisfy different projects. Ÿ Failure to Ensure Scalability of Projects. and seasonal natural catastrophes oft- one calorie consumption of food by a single More than 60% of agriculture land is under en hamper the overall productivity and human over one day. Pakistan, as an Ÿ Lack of Efficient Farm Practices. There is a the ownership of small-scale farmers. This is yield. Furthermore, access to capital is one agrarian economy with more than 42.5% lack of emphasis on high value agriculture one of the reasons that developmental and of the most pressing challenges farmers face national workforce employed in the sector, and efficient farming techniques. The sector yield improvement projects in this sector do when choosing to adopt new technologies. In has its water resources under tremendous lacks focus on improving the profitability/yield not scale well, and remain just pilot projects, order to aid local agri-tech startups, govern- stress and is on verge of becoming a water for the farmer and changing the perception of even if done under public private partner- ment needs to bridge the go-to-market for scarce country with accelerated depletion of the farmer for the role of various stake- ships. Small-farmers require assistance in Precision Farming startups by subsidizing access to right technologies, advisories, farmers for adoption. capital support and government subsidiaries to experiment adoption of new ways to crop. Ÿ Lack of Awareness and Digital Lit- eracy. There is very limited awareness Ÿ Lack of Database / Centralized Syst- of digital agriculture technologies and em. There is a lack of the connected their benefits in our farmers. Other than systems where the farmers' profiles a handful of large scale land owners, (through BISP/NRSP access) can be there is no utilization of modern farming used for identification, provide input on techniques and tools in Pakistan. soil fertility, scale of the owned land, and deliver climate data information. There Recommendations is currently an information gap as farmers cannot be identified through digital means Ÿ Met Department should improve the which leads to losing out on capturing the weather forecasting and reporting by bigger picture. Geospatial imagery can help utilizing AI, which will help the farmers plan cropping zone better and aid educated predict crop sowing, watering, fertilizing estimations of total national production. cycles in order to increase yields.

75 76 varied degrees of success, to help agriculturists ground water because of prevalent irrigation holders. Technologies such as IoT enabled Ÿ Inadequate Access to the Inputs and improve their livelihoods through increased practices. More than 90% ground water groundwater / soil moisture / soil pH sensors, Marketplace. Pakistan loses on selling agricultural productivity and incomes, and resource is used for irrigation purpose in automated water pumping techniques, data to export markets due to the lack of the reduction in risks. Similarly, Pakistan is on the Pakistan. There is a very high dependency analytics driven farming decision support proper grading, testing, and packaging journey of digitalizing different aspects of on groundwater to meet irrigation demands systems are not being employed at scale in while produce itself is of international sectoral value chains for delivering better yet it is managed very poorly leading to Pakistan's agriculture sector. market quality. Pakistan's agricultural services to the farmers and improving liveli- extreme groundwater depletion in Pakistan. produce is often re-packaged and re- hoods. Ÿ Farm Management. Farm management branded by the third parties and exported to Ÿ Eco-system. Currently, the agriculture sec- and water wastages are a critical challenge western markets. Other issues including Challenges tor landscape requires a change in mindset for farmers. On average, it is estimated that warehousing, logistics, ensuring standard- for both policy development and implementa- 35% irrigation water is wasted. Poor water- ized outputs and selling those outputs to Ÿ Water Wastages. Water usage has been tion. The governmental app-0roach doesn't use efficiency is primarily due to utilization of connected markets also need to be looked growing globally at more than twice the rate fully utilize the potential of public private obsolete techniques like flood irrigation, into. of population increase in last century, and an partnerships and the benefits of capacity which not only create waste but are unsuit- increasing number of regions are reaching building. The private companies haven't able for various type of crops. Pakistan is Ÿ Credit and Financing. There is a huge the limit at which water services can be been able to fully lend their core competen- becoming water scarce because of water challenge of credit and financing to sustainably delivered, especially in arid cies and agility to help support the public wastage. small farmers. The ever-fluctuating mar- regions according to UN Water Facts. On sector in the execution and scalability of ket prices and unpredictable weather average, it takes one liter of water to satisfy different projects. Ÿ Failure to Ensure Scalability of Projects. and seasonal natural catastrophes oft- one calorie consumption of food by a single More than 60% of agriculture land is under en hamper the overall productivity and human over one day. Pakistan, as an Ÿ Lack of Efficient Farm Practices. There is a the ownership of small-scale farmers. This is yield. Furthermore, access to capital is one agrarian economy with more than 42.5% lack of emphasis on high value agriculture one of the reasons that developmental and of the most pressing challenges farmers face national workforce employed in the sector, and efficient farming techniques. The sector yield improvement projects in this sector do when choosing to adopt new technologies. In has its water resources under tremendous lacks focus on improving the profitability/yield not scale well, and remain just pilot projects, order to aid local agri-tech startups, govern- stress and is on verge of becoming a water for the farmer and changing the perception of even if done under public private partner- ment needs to bridge the go-to-market for scarce country with accelerated depletion of the farmer for the role of various stake- ships. Small-farmers require assistance in Precision Farming startups by subsidizing access to right technologies, advisories, farmers for adoption. capital support and government subsidiaries to experiment adoption of new ways to crop. Ÿ Lack of Awareness and Digital Lit- eracy. There is very limited awareness Ÿ Lack of Database / Centralized Syst- of digital agriculture technologies and em. There is a lack of the connected their benefits in our farmers. Other than systems where the farmers' profiles a handful of large scale land owners, (through BISP/NRSP access) can be there is no utilization of modern farming used for identification, provide input on techniques and tools in Pakistan. soil fertility, scale of the owned land, and deliver climate data information. There Recommendations is currently an information gap as farmers cannot be identified through digital means Ÿ Met Department should improve the which leads to losing out on capturing the weather forecasting and reporting by bigger picture. Geospatial imagery can help utilizing AI, which will help the farmers plan cropping zone better and aid educated predict crop sowing, watering, fertilizing estimations of total national production. cycles in order to increase yields.

75 76 information delivered or enhanced through the ners in treatment of diseases, improving Internet and related technologies. Availability of clinical outcomes and the population's health E-health facilities brings about benefits in in general. improving access to healthcare, reducing patient wait times, reducing medical and related Ÿ Monitor and report on developments and costs, improving clinical outcomes and results in trends in digital innovation for public health to a relatively healthy population. inform policy and practice in the country.

Challenges Ÿ Establish cloud-based telehealth centers, providing timely and easy access to Following challenges are being faced related to healthcare professional in rural and remote adoption of E-Health in Pakistan: - regions.

Ÿ In Pakistan, health problems are rooted in Ÿ Electronic health records across Pakistani poor infrastructure, financial, economic, and hospitals should be interlinked via an environmental conditions. Individuals avoid Electronic Health Exchange, allowing the using state-provided medical facilities patients to make their records available to because of their “poor quality” and “unreliabil- any health facility he or she visits. ity.” A survey of Pakistani government Ÿ Agriculture sector should be educated, R&D material in local languages in order to hospitals suggested that the behavior of Ÿ Government to formulate suitable guidelines facilitated and incentivized to utilize the improve its utility. hospital administration, the irresponsible and code of practice for E-Health standard- modern farming techniques that are tec- attitudes of healthcare professionals (HCPs), ization. hnology and data driven e.g. to monitor Ÿ Address the issue of power distortion created and the illiteracy as well as poverty of citizens and identify the possible defects and by the middlemen (referred to as the “aarhti”) deters the Pakistani people from using state Ÿ Encourage R&D and adoption of AI for nutrient deficiencies in the soil. for transparent and efficient marketplaces. and public hospitals for treatment. healthcare and enhancement of telehealth services to reduce costs and improve service Ÿ Local agri-tech startups working on Precision Ÿ Use of a mobile (and online) portals to bring Ÿ Health information management systems are quality. together farmers and traders for the pur- Farming, saving water wastages and not deployed in hospitals across Pakistan. increasing crop yield should be supported. poses of buying and selling goods, tendering c. E-Energy for services and bartering at the national Ÿ Patients' electronic medical records (EMR) Ÿ Encourage the adoption of modern tools, and/or provincial levels. are not being maintained; even if some Pakistan's energy sector remains one of the techniques and technologies for farming hospitals utilize EMR systems, the records main obstacles to industrial and economic Ÿ such as AI and IoT. When sufficiently perva- Support farmers through the use of IT in are not easily available for patients or owned growth. Although Pakistan has managed to sive, the agriculture sector will be well placed relevant areas such as digital mapping, land by the patients. increase power generation consistently since to benefit from advanced technological use, soil types, meteorology, ecology, ocean- 2013 and mitigate power blackouts that plagued facilities such as drip irrigation, vertical ography (particularly off-shore fisheries Ÿ Connectivity infrastructure is not available at the country over the previous decade, expensive farming, and hydroponics. exploitation), hydrology, agricultural records majority of the hospitals and health units for fuel sources, a reliance on imported energy etc. utilizing E-Health tools. products, chronic natural gas and electricity Ÿ Manual irrigation should be gradually shortages, major debt in the power sector, and replaced by automatic irrigation schedule b. E- Health Recommendations aging and insufficient transmission and distribu- techniques to ensure optimal use of water tion systems have prevented the sector from resources in irrigation. E-health is an established field in the intersec- Ÿ Mandate all hospitals to maintain Electronic growing and modernizing. Pakistan's energy tion of medical informatics, public health and Medical Records (EMR) of the patients, future remains challenging. According to Ÿ Prepare latest agriculture education and business, referring to health services and which is beneficial to the medical practitio- National Electric Power Regulatory Authority's

77 78 information delivered or enhanced through the ners in treatment of diseases, improving Internet and related technologies. Availability of clinical outcomes and the population's health E-health facilities brings about benefits in in general. improving access to healthcare, reducing patient wait times, reducing medical and related Ÿ Monitor and report on developments and costs, improving clinical outcomes and results in trends in digital innovation for public health to a relatively healthy population. inform policy and practice in the country.

77 78 (NEPRA) 2019 yearly report, Pakistan's total terms of energy production through alternate, ing and analyzing power generation and the internet. Studies show that Micro Small and installed power generation capacity is 39000 non-fossil fuel sources. utilization statistics for running an efficient Medium Enterprises (MSMEs) that use E- MW, of which 66% of energy comes from grid infrastructure. Commerce platforms are around five times more thermal (fossil fuels), 24% from hydro, and 6% Ÿ Electricity theft. Power theft is one of the likely to export than those in the traditional from renewable (wind, solar and bagasse) and most prevalent issues which not only cause Ÿ Removing the bureaucratic stumbling blocks economy. The rapid growth of E-Commerce is 4% from nuclear. In the current scenario, economic losses but also the irregular supply in enabling 'Wheeling' of electricity. Private not confined to the developed countries; the renewable energy (RE) resources can play an of electricity. It hampers the functioning of sector is willing to invest in clean and cheap developing countries are catching up fast in this important role in closing the deficit. With current industries and factories, and also causes a energy by erecting Solar PV or Wind Plants, race. The South Asian region displays the government's tilt towards renewable energy, shortage of power supply to the residential these infrastructural investments can mini- highest rate of growth in the E-Commerce Ministry of Energy is also working on the sector. It also leads to significant loss of mize national reliance on expensive sources industry. E-Commerce enables more dynamic development of a new 25-year energy policy. revenue to the Government Ultimately it is of utility scale energy. relationships between producers and consum- The policy reportedly seeks to have 20-30 the country's economy that suffers along with ers. It extends the addressable market for percent of all energy derived from renewable the country's political reputation. Ÿ Smart home/office solutions and smart goods and services, particularly in countries energy sources by 2030 and would wean meters already exist but not yet widely where many still lack access to savings, credit Pakistan's dependence on imported fuel Ÿ Distributed power generation from cent- deployed. Encourage and facilitate adoption and insurance products. The B2C Global Retail products. ralized systems. The distributed generation of smart metering. E-Commerce is growing; as of 2020, the Global refers to a variety of technologies that E-Commerce sales amount to US $4+ trillion. Ÿ Challenges generate electricity at or near where it will be Improve demand predictions to manage Globally, it is 15% of the total retail market. With respect to E-Commerce's share in a country's used, such as solar panels and combined electricity distribution and consumption efficiently. total retail market, India's E-Commerce holds a Ÿ Alternate Energy Solutions. The world is heat and power. However, in Pakistan, power 2.2% share, USA's 9%, and China's 23.1%, undergoing an energy transformation, from a generation is not greatly decentralized yet. Ÿ Subsidy should be given on solar panels whereas Pakistan E-Commerce share is only system based on fossil fuels to a system installations and operations to encourage 0.5% of the total retail market. We have a huge based on renewable energy, in order to Recommendations greater adoption. opportunity to tap this opportunity space and reduce global greenhouse gas emissions grow this percentage to at least 15%. Recent and avoid the most serious impacts of a Ÿ Ensure decentralization and digitalization of Ÿ Energy utilization assessment should be indicators within the Pakistan E-Commerce changing climate. However, Pakistan lags in the power grid, centrally collecting, aggregat- mandated across all multi-story commercial market are encouraging; the number of regis- buildings to assess the buildings' energy tered E-Commerce merchants has risen by 2.6 efficiency and help reduce energy costs and times and E-Commerce payments have surged carbon footprint. 2.3 times in a span of just twelve months. E- Commerce businesses such as daraz.pk, Ÿ Investment is also needed in technology and pakwheels.com and others are already achiev- programs that allow energy generation closer ing significant business in Pakistan, indicating a to energy consumption areas, reducing line positive trend for a growing E-Commerce sector losses improving the overall efficiency of the of Pakistan. national grid infrastructure. There are different E-Commerce models like Ÿ Removing barriers for the large scale re- B2B Market Place (Alibaba); B2B Procurement newables adoption by ICT Industry. (Khareed); B2C Marketplace (Daraz, Food- panda); B2C Multi-Brand Marketplace (Home d. E-Commerce/E-Banking Shopping, Shop hive); DTC E-Commerce Sto- res (e.g. those based on fishry.com).Pakistan's E-Commerce enables undertaking commerce industry is emerging rapidly and has the poten- activities, especially business transactions, via tial to strengthen country's economy by creating

79 80 (NEPRA) 2019 yearly report, Pakistan's total terms of energy production through alternate, ing and analyzing power generation and the internet. Studies show that Micro Small and installed power generation capacity is 39000 non-fossil fuel sources. utilization statistics for running an efficient Medium Enterprises (MSMEs) that use E- MW, of which 66% of energy comes from grid infrastructure. Commerce platforms are around five times more thermal (fossil fuels), 24% from hydro, and 6% Ÿ Electricity theft. Power theft is one of the likely to export than those in the traditional from renewable (wind, solar and bagasse) and most prevalent issues which not only cause Ÿ Removing the bureaucratic stumbling blocks economy. The rapid growth of E-Commerce is 4% from nuclear. In the current scenario, economic losses but also the irregular supply in enabling 'Wheeling' of electricity. Private not confined to the developed countries; the renewable energy (RE) resources can play an of electricity. It hampers the functioning of sector is willing to invest in clean and cheap developing countries are catching up fast in this important role in closing the deficit. With current industries and factories, and also causes a energy by erecting Solar PV or Wind Plants, race. The South Asian region displays the government's tilt towards renewable energy, shortage of power supply to the residential these infrastructural investments can mini- highest rate of growth in the E-Commerce Ministry of Energy is also working on the sector. It also leads to significant loss of mize national reliance on expensive sources industry. E-Commerce enables more dynamic development of a new 25-year energy policy. revenue to the Government Ultimately it is of utility scale energy. relationships between producers and consum- The policy reportedly seeks to have 20-30 the country's economy that suffers along with ers. It extends the addressable market for percent of all energy derived from renewable the country's political reputation. Ÿ Smart home/office solutions and smart goods and services, particularly in countries energy sources by 2030 and would wean meters already exist but not yet widely where many still lack access to savings, credit Pakistan's dependence on imported fuel Ÿ Distributed power generation from cent- deployed. Encourage and facilitate adoption and insurance products. The B2C Global Retail products. ralized systems. The distributed generation of smart metering. E-Commerce is growing; as of 2020, the Global refers to a variety of technologies that E-Commerce sales amount to US $4+ trillion. Ÿ Challenges generate electricity at or near where it will be Improve demand predictions to manage Globally, it is 15% of the total retail market. With respect to E-Commerce's share in a country's used, such as solar panels and combined electricity distribution and consumption efficiently. total retail market, India's E-Commerce holds a Ÿ Alternate Energy Solutions. The world is heat and power. However, in Pakistan, power 2.2% share, USA's 9%, and China's 23.1%, undergoing an energy transformation, from a generation is not greatly decentralized yet. Ÿ Subsidy should be given on solar panels whereas Pakistan E-Commerce share is only system based on fossil fuels to a system installations and operations to encourage 0.5% of the total retail market. We have a huge based on renewable energy, in order to Recommendations greater adoption. opportunity to tap this opportunity space and reduce global greenhouse gas emissions grow this percentage to at least 15%. Recent and avoid the most serious impacts of a Ÿ Ensure decentralization and digitalization of Ÿ Energy utilization assessment should be indicators within the Pakistan E-Commerce changing climate. However, Pakistan lags in the power grid, centrally collecting, aggregat- mandated across all multi-story commercial market are encouraging; the number of regis- buildings to assess the buildings' energy tered E-Commerce merchants has risen by 2.6 efficiency and help reduce energy costs and times and E-Commerce payments have surged carbon footprint. 2.3 times in a span of just twelve months. E- Commerce businesses such as daraz.pk, Ÿ Investment is also needed in technology and pakwheels.com and others are already achiev- programs that allow energy generation closer ing significant business in Pakistan, indicating a to energy consumption areas, reducing line positive trend for a growing E-Commerce sector losses improving the overall efficiency of the of Pakistan. national grid infrastructure. There are different E-Commerce models like Ÿ Removing barriers for the large scale re- B2B Market Place (Alibaba); B2B Procurement newables adoption by ICT Industry. (Khareed); B2C Marketplace (Daraz, Food- panda); B2C Multi-Brand Marketplace (Home d. E-Commerce/E-Banking Shopping, Shop hive); DTC E-Commerce Sto- res (e.g. those based on fishry.com).Pakistan's E-Commerce enables undertaking commerce industry is emerging rapidly and has the poten- activities, especially business transactions, via tial to strengthen country's economy by creating

79 80 Ÿ Consumer Protection. Consumer protec- services to the merchants. tion is perceived to be weak in Pakistan, with an impression that end buyers may have little Ÿ High Cost of Doing Business. For busi- recourse available in case of payment nesses, upfront costs for developing an disputes or instances requiring return of adequately secure and reliable infrastructure goods/services acquired via E-Commerce for payment processing, negotiating con- channel. In particular, consumers tend to be tracts with banks/PSO/PSPs, and stringent hesitant when transacting using online KYC requirements of banks for merchant on channels, as they worry that their personal boarding prove to be the major deterrents. information (such as credit card number, bank account number, address, etc.) may be Ÿ Logistics Infrastructure and Delivery leaked or misused by unauthorized persons. Services. Poor logistics have traditionally been major hurdle. Local courier services Ÿ Lack of Trust. The absence of trust in online lack scale and penetration; while major platforms and inadequate implementation of international courier services such as FedEx consumer protection laws pertaining to E- and DHL are too costly to be used by internet Commerce, amid an already low digital retailers. There are no automated systems more job opportunities, linking remote areas to supports electronic business transactions at literacy environment, become a deterrent to for transportation/delivery at local third-party mainstream, development of small and medium national, regional and international levels. the rapid digitization envisioned by the logistics' end, which may give online stores enterprises and finally enhancing exports policymakers and industry players. The accurate visibility. Some marketplaces and through online platforms. It is noteworthy that Ÿ Legal and Regulatory Environment. efficacy of the online payment system gets retailers face inventory challenges, which last year, Pakistan's E-Commerce growth in Pakistan's basic laws concerning Information diminished as many banks do not by default result in non-availability of stock ordered on different areas has on average doubled e.g. Technology (IT) extend legal recognition to allow debit cards to be used for online the website. These and other related prob- Food and Personal Care 119%, Fashion and transactions carried out in the digital environ- transactions. Either the customers have to lems arise due to manual synchronization Beauty 122%, Electronics and Physical Media ment and electronic payments. However, contact bank's helpline to activate the debit between manufacturers/suppliers and online 97%, Furniture and Appliances 98%, Toys, DIY generally E-Commerce is regulated under cards for E-Commerce for a set timeframe, or marketplaces and retailers. A likely result of and Hobbies 86%, Travel (including accommo- the statutes concerning traditional com- the debit cards simply cannot be used to this is long delays in delivery or even cancel- dation) 8.5%, Digital Music 30% and Video merce. This gives rise to various concerns for transact online. lation of orders. This erodes consumer's trust games 23%. However, there is still a significant the industry and the concerned authorities. and confidence which are the two fundamen- growth opportunity in the E-Commerce sector. For addressing these issues, it is necessary Ÿ Card-Not-Present (CNP) transactions. tal factors necessary for growth of retail B2C to take measures for allowing re-export/re- 1Link has enabled its system to allow E- model of E-Commerce. Challenges shipment of goods, launch National Single Commerce transactions and is inviting banks Window (NSW) for speedy processing of to integrate the same at their end. This would Ÿ Taxation Structure. Taxation of online Ÿ Lack of Awareness and Accessibility. issues related to E-Commerce, especially for allow customers in Pakistan to execute E- marketplaces has always been a contentious There still exists a digital divide between export of the large volume of low-cost Commerce transactions through PayPak issue between E-Commerce players and the those who are aware of modern technologi- goods/items. To cater for the possible impact Cards. However, the same would not be revenue authorities all over the world. In cal usage of the Internet and then those who of import of digital goods in Pakistan, infra- viable for cross border transactions. Pakistan, taxation structure related to E- are not literate enough to utilize it, especially structure and technical capacity should be Commerce businesses requires certain Ÿ Digital Merchant. On-boarding is not being facilities related to the E-Commerce. The developed to enable the government to reforms in the form of harmonization in sales offered by any bank in Pakistan. Availability of tax rates, avoidance of double taxation and Government needs to encourage the use of impose customs duties on such products on merchant digital on-boarding by banks with simplified procedures in filing of tax returns. E-Commerce amongst general public thr- their import. At present, there is no separate simplified Know Your Customer (KYC) ough awareness campaigns to promote a mechanism/registry for E-Commerce busin- requirements would provide an enabling Ÿ International Payment Gateways. Pay- culture of E-Commerce in the country which esses. environment for providing cost effective ment processors like VISA and MasterCard

81 82 Ÿ Consumer Protection. Consumer protec- services to the merchants. tion is perceived to be weak in Pakistan, with an impression that end buyers may have little Ÿ High Cost of Doing Business. For busi- recourse available in case of payment nesses, upfront costs for developing an disputes or instances requiring return of adequately secure and reliable infrastructure goods/services acquired via E-Commerce for payment processing, negotiating con- channel. In particular, consumers tend to be tracts with banks/PSO/PSPs, and stringent hesitant when transacting using online KYC requirements of banks for merchant on channels, as they worry that their personal boarding prove to be the major deterrents. information (such as credit card number, bank account number, address, etc.) may be Ÿ Logistics Infrastructure and Delivery leaked or misused by unauthorized persons. Services. Poor logistics have traditionally been major hurdle. Local courier services Ÿ Lack of Trust. The absence of trust in online lack scale and penetration; while major platforms and inadequate implementation of international courier services such as FedEx consumer protection laws pertaining to E- and DHL are too costly to be used by internet Commerce, amid an already low digital retailers. There are no automated systems more job opportunities, linking remote areas to supports electronic business transactions at literacy environment, become a deterrent to for transportation/delivery at local third-party mainstream, development of small and medium national, regional and international levels. the rapid digitization envisioned by the logistics' end, which may give online stores enterprises and finally enhancing exports policymakers and industry players. The accurate visibility. Some marketplaces and through online platforms. It is noteworthy that Ÿ Legal and Regulatory Environment. efficacy of the online payment system gets retailers face inventory challenges, which last year, Pakistan's E-Commerce growth in Pakistan's basic laws concerning Information diminished as many banks do not by default result in non-availability of stock ordered on different areas has on average doubled e.g. Technology (IT) extend legal recognition to allow debit cards to be used for online the website. These and other related prob- Food and Personal Care 119%, Fashion and transactions carried out in the digital environ- transactions. Either the customers have to lems arise due to manual synchronization Beauty 122%, Electronics and Physical Media ment and electronic payments. However, contact bank's helpline to activate the debit between manufacturers/suppliers and online 97%, Furniture and Appliances 98%, Toys, DIY generally E-Commerce is regulated under cards for E-Commerce for a set timeframe, or marketplaces and retailers. A likely result of and Hobbies 86%, Travel (including accommo- the statutes concerning traditional com- the debit cards simply cannot be used to this is long delays in delivery or even cancel- dation) 8.5%, Digital Music 30% and Video merce. This gives rise to various concerns for transact online. lation of orders. This erodes consumer's trust games 23%. However, there is still a significant the industry and the concerned authorities. and confidence which are the two fundamen- growth opportunity in the E-Commerce sector. For addressing these issues, it is necessary Ÿ Card-Not-Present (CNP) transactions. tal factors necessary for growth of retail B2C to take measures for allowing re-export/re- 1Link has enabled its system to allow E- model of E-Commerce. Challenges shipment of goods, launch National Single Commerce transactions and is inviting banks Window (NSW) for speedy processing of to integrate the same at their end. This would Ÿ Taxation Structure. Taxation of online Ÿ Lack of Awareness and Accessibility. issues related to E-Commerce, especially for allow customers in Pakistan to execute E- marketplaces has always been a contentious There still exists a digital divide between export of the large volume of low-cost Commerce transactions through PayPak issue between E-Commerce players and the those who are aware of modern technologi- goods/items. To cater for the possible impact Cards. However, the same would not be revenue authorities all over the world. In cal usage of the Internet and then those who of import of digital goods in Pakistan, infra- viable for cross border transactions. Pakistan, taxation structure related to E- are not literate enough to utilize it, especially structure and technical capacity should be Commerce businesses requires certain Ÿ Digital Merchant. On-boarding is not being facilities related to the E-Commerce. The developed to enable the government to reforms in the form of harmonization in sales offered by any bank in Pakistan. Availability of tax rates, avoidance of double taxation and Government needs to encourage the use of impose customs duties on such products on merchant digital on-boarding by banks with simplified procedures in filing of tax returns. E-Commerce amongst general public thr- their import. At present, there is no separate simplified Know Your Customer (KYC) ough awareness campaigns to promote a mechanism/registry for E-Commerce busin- requirements would provide an enabling Ÿ International Payment Gateways. Pay- culture of E-Commerce in the country which esses. environment for providing cost effective ment processors like VISA and MasterCard

81 82 operate in Pakistan, which facilitate the large portion of the population at a disadvan- anies doing online businesses to get regis- Ÿ Creation of an E-Commerce business merchants for E-Commerce transactions, tage when it comes to utilizing E-banking. tered. SECP shall add a separate category of facilitation hub. TDAP to develop an E- both national as well as international. E-Commerce and simplify the registration Platform to bring together all players under However, there are a number popular Recommendations process by making necessary amendments one umbrella. International Payment Gateways that do not in the Companies Act, 2017 and relevant operate for transactions and payment routing Ÿ Establish secure technical infrastructure and rules and regulation. Ÿ Legal framework for consumer protection in Pakistan, owing to a number of regulators facilitate payment service providers to ope- has to be improved proportionate to the issues. rate in Pakistan in order to progress in the E- Ÿ ·For foreign E-Commerce businesses, increase in size of the E-Commerce market. Commerce business. instead of SECP registration, requirement of Ÿ ICT and Telecommunication. ICT Infra- registration of business shall be deemed to Ÿ Harmonized provincial sales tax regimes structure plays a vital role in enabling E- Ÿ Implementation of the Trade Facilitation the extent of only liaison/ branch office through application of uniform sales tax rates Banking, but the limited proliferation of ICT Agreement and operationalization of the registered with Board of Investment. on services and in avoiding double taxation. infrastructure across Pakistan is hindering National Single Window shall ensure facili- Ÿ the pervasive spread and utilization of e- tation of E-Commerce through simplified I&E Ÿ The Schedule II (Distribution of Business State Bank of Pakistan to further facilitate banking as compared to foreign countries. forms, de minimis and expedited ship-ment among the Divisions) of the Rules of accessibility to international payment provisions. Business 1973 shall be suitably amended to gateway shall work on allowing an existing Ÿ Ease of Access. In Pakistan, there are many allocate the subject of E-Commerce to the international service provider to offer ser- banks that provide the services of e-banking Ÿ International best practices shall be continu- Commerce Division. Wherever the word vices in Pakistan. but they have not designed their web portals ously reviewed and followed regarding commerce is used, it shall be accompanied Ÿ Ensure continuous at the entire multilateral according to the need and demand of imposition of levies, customs duties and by E-Commerce too. E-Commerce negotiation forums such as customers. They always focus on their own other taxes on e-goods and FBR (Customs) WTO, ITU, UNESCAP and UNCTAD to demands while they are designing the shall develop the necessary infrastructure Ÿ Promote financial inclusion and digitization, protect Pakistan's economic interest and website for the purpose of e-banking, which and technical capabilities. Cash on Delivery mode of E-Commerce shall global connectivity through market access is difficult to understand and use by non-IT- be gradually discouraged through special and effective special and differential treat- tuned consumers. Furthermore, other than Ÿ Online/E-Commerce businesses should be incentives for consumers and merchants with ment. fraud related warnings, no bank's online registered with SECP, irrespective of legal an objective to use digital devices for pay- banking portal or app has a complete Urdu nature of the business entity, i.e. to allow ments. Ÿ Use of credit cards can be promoted by language version, which severely puts a partnership firms and single member comp- lowering the bank's interest rates and easy Ÿ Establish a national E-Commerce gateway repayment schedules. with the State Bank of Pakistan (SBP) with the support and coordination of relevant Ÿ Banks need to re-focus on making the design stakeholders to promote internet merchant and content of their E-Banking portals easier accounts to facilitate B2B and other in-bound to use from a functional perspective. transactions. Ÿ Take effective measures to further enhance Ÿ Promote the IT enabled logistic systems of the security and safety of online banking. Logistic Operators, especially the operations of Pakistan Post. Ÿ Develop E-Banking and E-Commerce portals and apps in local languages Ÿ Align SME policy in line with the growing opportunities in E-Commerce. Initiate Pak e- Ÿ Adopt and enforce Made in Pakistan technol- SME program to identify train, enable and ogies. connect 50,000 e-SMEs of remote areas of Pakistan to online market places for promot- e. E-Justice ing E-Commerce. E-Justice is a specific field under the more

83 84 operate in Pakistan, which facilitate the large portion of the population at a disadvan- anies doing online businesses to get regis- Ÿ Creation of an E-Commerce business merchants for E-Commerce transactions, tage when it comes to utilizing E-banking. tered. SECP shall add a separate category of facilitation hub. TDAP to develop an E- both national as well as international. E-Commerce and simplify the registration Platform to bring together all players under However, there are a number popular Recommendations process by making necessary amendments one umbrella. International Payment Gateways that do not in the Companies Act, 2017 and relevant operate for transactions and payment routing Ÿ Establish secure technical infrastructure and rules and regulation. Ÿ Legal framework for consumer protection in Pakistan, owing to a number of regulators facilitate payment service providers to ope- has to be improved proportionate to the issues. rate in Pakistan in order to progress in the E- Ÿ ·For foreign E-Commerce businesses, increase in size of the E-Commerce market. Commerce business. instead of SECP registration, requirement of Ÿ ICT and Telecommunication. ICT Infra- registration of business shall be deemed to Ÿ Harmonized provincial sales tax regimes structure plays a vital role in enabling E- Ÿ Implementation of the Trade Facilitation the extent of only liaison/ branch office through application of uniform sales tax rates Banking, but the limited proliferation of ICT Agreement and operationalization of the registered with Board of Investment. on services and in avoiding double taxation. infrastructure across Pakistan is hindering National Single Window shall ensure facili- Ÿ the pervasive spread and utilization of e- tation of E-Commerce through simplified I&E Ÿ The Schedule II (Distribution of Business State Bank of Pakistan to further facilitate banking as compared to foreign countries. forms, de minimis and expedited ship-ment among the Divisions) of the Rules of accessibility to international payment provisions. Business 1973 shall be suitably amended to gateway shall work on allowing an existing Ÿ Ease of Access. In Pakistan, there are many allocate the subject of E-Commerce to the international service provider to offer ser- banks that provide the services of e-banking Ÿ International best practices shall be continu- Commerce Division. Wherever the word vices in Pakistan. but they have not designed their web portals ously reviewed and followed regarding commerce is used, it shall be accompanied Ÿ Ensure continuous at the entire multilateral according to the need and demand of imposition of levies, customs duties and by E-Commerce too. E-Commerce negotiation forums such as customers. They always focus on their own other taxes on e-goods and FBR (Customs) WTO, ITU, UNESCAP and UNCTAD to demands while they are designing the shall develop the necessary infrastructure Ÿ Promote financial inclusion and digitization, protect Pakistan's economic interest and website for the purpose of e-banking, which and technical capabilities. Cash on Delivery mode of E-Commerce shall global connectivity through market access is difficult to understand and use by non-IT- be gradually discouraged through special and effective special and differential treat- tuned consumers. Furthermore, other than Ÿ Online/E-Commerce businesses should be incentives for consumers and merchants with ment. fraud related warnings, no bank's online registered with SECP, irrespective of legal an objective to use digital devices for pay- banking portal or app has a complete Urdu nature of the business entity, i.e. to allow ments. Ÿ Use of credit cards can be promoted by language version, which severely puts a partnership firms and single member comp- lowering the bank's interest rates and easy Ÿ Establish a national E-Commerce gateway repayment schedules. with the State Bank of Pakistan (SBP) with the support and coordination of relevant Ÿ Banks need to re-focus on making the design stakeholders to promote internet merchant and content of their E-Banking portals easier accounts to facilitate B2B and other in-bound to use from a functional perspective. transactions. Ÿ Take effective measures to further enhance Ÿ Promote the IT enabled logistic systems of the security and safety of online banking. Logistic Operators, especially the operations of Pakistan Post. Ÿ Develop E-Banking and E-Commerce portals and apps in local languages Ÿ Align SME policy in line with the growing opportunities in E-Commerce. Initiate Pak e- Ÿ Adopt and enforce Made in Pakistan technol- SME program to identify train, enable and ogies. connect 50,000 e-SMEs of remote areas of Pakistan to online market places for promot- e. E-Justice ing E-Commerce. E-Justice is a specific field under the more

83 84 general umbrella of e-Government. In particular, Challenges Ÿ Introduce Sentencing Information System, opportunities, this makes it particularly well- it refers to the use of information and communi- which aids judges in quick sentencing, easy suited for leveraging digital and innovative cation technologies aimed at improving access Ÿ Capacity Building / ICT Training. By access to relevant information about past property technologies as a means to address to justice, increasing cooperation between legal making efficient use of technology, courts sentencing of the court in similar cases, their myriad challenges e.g. using space more authorities, strengthening the justice system and and arbitral tribunals in Pakistan can offer without placing any formal restrictions on the efficiently, improving tenant experience and improving legal institutions and the overall expeditious and cost-effective access to exercise of judicial discretion. satisfaction, and managing the carbon foot- administration of law. ICT enabled justice justice. Most of the lawyers and judges are print of their assets. functions could increase productivity and not tech-savvy and follow the traditional ways Ÿ Centralize the information organization and diminishes transaction costs within a system of justice system, rendering the few technical provisions with the highest courts, ministries Pakistan's construction industry amounts to that is highly information intensive; reduces the interventions in the justice system useless. of justice, and judicial councils. over $50 billion, which makes up about 12-13% duration of procedures, thus saving both time of the GDP, out of which the real estate sector and money, and puts systems for document Ÿ Infrastructure. There are ongoing measures Ÿ Introduce criminal justice interoperability contributes approximately one-third ($15 handling and processing within the reach of by the Government towards implementing an platform that digitally links together crime billion) of the total GDP. With the increase in judges and courts; provide the best information E-justice system in Pakistan e.g. there exists reporting, investigation, prosecution, judicial availability of smartphones, reliable 3G, and available and a better understanding of both the National Judicial Automation Committee, and jail systems. 4G services in urban areas of Pakistan and the way the courts work and the legal instruments however a consistent and effective ICT increased use of property related online that citizens have to ensure recognition of their enabled, digital E-Justice system has not Ÿ Ministry of IT to assist in training and conduct- portals, the Prop-Tech in Pakistan is growing. rights; facilitate improved control over cases and been implemented in Pakistan. ing regular workshops with certifications to As more house/property buyers are logging in allow a better qualitative and quantitative the officers of all courts and tribunals. to find homes, traditional agents and develop- evaluation of outputs. As a consequence, e- Recommendations ers have had to change their outreach chan- Justice also increases beneficiaries' confidence f. Success of Property Technology (IT) nels from traditional to digital. While there is and provides greater legitimacy of the judicial Ÿ Implement the Digital Court and Case still a widespread use of traditional methods, power. Judiciary in Pakistan urgently needs re- Management Systems across Pakistani Prop-Tech (Property and Technology) is a one can observe a steady shift in processes engineering with ICT and digitalization focus, courts, whereby the data used in the course small part of the wider digital transformation of towards the digital alternative. The technologies modernize the use of its human resource and of litigation is stored in automated registers the property industry. The real estate industry that are being used in Prop-Tech in Pakistan bring about change management by harnessing and can be retrieved securely and automati- is, by its nature, quite a traditional industry, but vary across many domains and are in the fields the potentiality of the available information and cally. Transition towards automation of it faces a number of challenges. As the sector is of smart online listing portals, drones, mobile- communication technology to its fullest extent. judicial processes. quite data-rich and open to exploring digital friendly websites, and apps, augmented reality

85 86 general umbrella of e-Government. In particular, Challenges Ÿ Introduce Sentencing Information System, opportunities, this makes it particularly well- it refers to the use of information and communi- which aids judges in quick sentencing, easy suited for leveraging digital and innovative cation technologies aimed at improving access Ÿ Capacity Building / ICT Training. By access to relevant information about past property technologies as a means to address to justice, increasing cooperation between legal making efficient use of technology, courts sentencing of the court in similar cases, their myriad challenges e.g. using space more authorities, strengthening the justice system and and arbitral tribunals in Pakistan can offer without placing any formal restrictions on the efficiently, improving tenant experience and improving legal institutions and the overall expeditious and cost-effective access to exercise of judicial discretion. satisfaction, and managing the carbon foot- administration of law. ICT enabled justice justice. Most of the lawyers and judges are print of their assets. functions could increase productivity and not tech-savvy and follow the traditional ways Ÿ Centralize the information organization and diminishes transaction costs within a system of justice system, rendering the few technical provisions with the highest courts, ministries Pakistan's construction industry amounts to that is highly information intensive; reduces the interventions in the justice system useless. of justice, and judicial councils. over $50 billion, which makes up about 12-13% duration of procedures, thus saving both time of the GDP, out of which the real estate sector and money, and puts systems for document Ÿ Infrastructure. There are ongoing measures Ÿ Introduce criminal justice interoperability contributes approximately one-third ($15 handling and processing within the reach of by the Government towards implementing an platform that digitally links together crime billion) of the total GDP. With the increase in judges and courts; provide the best information E-justice system in Pakistan e.g. there exists reporting, investigation, prosecution, judicial availability of smartphones, reliable 3G, and available and a better understanding of both the National Judicial Automation Committee, and jail systems. 4G services in urban areas of Pakistan and the way the courts work and the legal instruments however a consistent and effective ICT increased use of property related online that citizens have to ensure recognition of their enabled, digital E-Justice system has not Ÿ Ministry of IT to assist in training and conduct- portals, the Prop-Tech in Pakistan is growing. rights; facilitate improved control over cases and been implemented in Pakistan. ing regular workshops with certifications to As more house/property buyers are logging in allow a better qualitative and quantitative the officers of all courts and tribunals. to find homes, traditional agents and develop- evaluation of outputs. As a consequence, e- Recommendations ers have had to change their outreach chan- Justice also increases beneficiaries' confidence f. Success of Property Technology (IT) nels from traditional to digital. While there is and provides greater legitimacy of the judicial Ÿ Implement the Digital Court and Case still a widespread use of traditional methods, power. Judiciary in Pakistan urgently needs re- Management Systems across Pakistani Prop-Tech (Property and Technology) is a one can observe a steady shift in processes engineering with ICT and digitalization focus, courts, whereby the data used in the course small part of the wider digital transformation of towards the digital alternative. The technologies modernize the use of its human resource and of litigation is stored in automated registers the property industry. The real estate industry that are being used in Prop-Tech in Pakistan bring about change management by harnessing and can be retrieved securely and automati- is, by its nature, quite a traditional industry, but vary across many domains and are in the fields the potentiality of the available information and cally. Transition towards automation of it faces a number of challenges. As the sector is of smart online listing portals, drones, mobile- communication technology to its fullest extent. judicial processes. quite data-rich and open to exploring digital friendly websites, and apps, augmented reality

85 86 (AR) as well as virtual reality (VR) tours. planned. surveys, assessments, town planning, etc. Ÿ Improved Digital Payments infrastructure will result in an increased flow of com- Challenges Ÿ Trapped Investments. Many investments end Ÿ Allow investors to use to land parcel planning merce and currency. up in dead and unplanned projects, reducing and feasibility data to make informed Ÿ Market Research of Assets and Resources. their potential economic benefit. decisions. Ÿ Digitalization and automation of judicial Homebuyers spend the maximum amount of processes will empower courts and time seeking verified agents and clean Ÿ Unregulated Transactions. Majority of real Ÿ Use technology, e.g. digital inventories enable efficient law dispensing. properties with no legal litigations or dis- estate transactions continue to be unregu- backed by a legal framework to make putes. In the Pakistani market, this activity is lated, opaque and off-the-books, leading to transactions safe, secure and transparent. Ÿ Digital banks and an enabling infrastruc- painstakingly difficult and time consuming. continuing issues of trust and investor ture will lead to reduction in unregulated g. Expected Impact of Use of ICT in Socio confidence. movement of capital and an improved Ÿ Lack of Data. A constant problem faced by Economic Sectors digital environment for FDI. the real estate sector is unavailability of Recommendations Encouraging new technologies in socioeco- digital land records. Some provinces have Ÿ Effective use of prop-tech can signifi- Ÿ Introduce and implement national level policy nomic sectors will enable Pakistan's journey partially digitized their land records, but there cantly improve transparency and docu- and program to digitize all land records towards becoming a truly digital nation. is not only a significant portion of land record mentation of the real estate economy, across all provinces in 3-5 years. yet to be digitized, the private sector has no Ÿ IoT and AI-led Agri-tech solutions will save allow efficient planning based on well- access (through APIs, subscriptions, open Ÿ Allow private sector access to digital land water wastages and increase crop yield researched data repositories, enhance data portals, etc.) to this land record and thus records for utilization in Prop-Tech investment profile in the sector and Ÿ Use of technology in healthcare, particularly cannot utilize it in Prop-Tech. generate snowball impact. Ÿ Regulate and license property agents, devise EMRs and AI, will lead to predictive care, Ÿ National Need. It is estimated that 20 million and enforce a code of conduct, and maintain disease spread analytics, and accessible new houses will be needed across by 2030. and publish a registry and track record of and improved healthcare. property agents' transactions. Ÿ Regulation and Enforcement. There are 65 Ÿ Large scale renewables adoption by ICT Ÿ thousand housing societies in Pakistan, Digitize land parcels, using geospatial data, Industry will lead to improved national energy about half of which are not approved / which can then be used for construction, mix and reduced ICT operating expense.

87 88 (AR) as well as virtual reality (VR) tours. planned. surveys, assessments, town planning, etc. Ÿ Improved Digital Payments infrastructure will result in an increased flow of com- Challenges Ÿ Trapped Investments. Many investments end Ÿ Allow investors to use to land parcel planning merce and currency. up in dead and unplanned projects, reducing and feasibility data to make informed Ÿ Market Research of Assets and Resources. their potential economic benefit. decisions. Ÿ Digitalization and automation of judicial Homebuyers spend the maximum amount of processes will empower courts and time seeking verified agents and clean Ÿ Unregulated Transactions. Majority of real Ÿ Use technology, e.g. digital inventories enable efficient law dispensing. properties with no legal litigations or dis- estate transactions continue to be unregu- backed by a legal framework to make putes. In the Pakistani market, this activity is lated, opaque and off-the-books, leading to transactions safe, secure and transparent. Ÿ Digital banks and an enabling infrastruc- painstakingly difficult and time consuming. continuing issues of trust and investor ture will lead to reduction in unregulated g. Expected Impact of Use of ICT in Socio confidence. movement of capital and an improved Ÿ Lack of Data. A constant problem faced by Economic Sectors digital environment for FDI. the real estate sector is unavailability of Recommendations Encouraging new technologies in socioeco- digital land records. Some provinces have Ÿ Effective use of prop-tech can signifi- Ÿ Introduce and implement national level policy nomic sectors will enable Pakistan's journey partially digitized their land records, but there cantly improve transparency and docu- and program to digitize all land records towards becoming a truly digital nation. is not only a significant portion of land record mentation of the real estate economy, across all provinces in 3-5 years. yet to be digitized, the private sector has no Ÿ IoT and AI-led Agri-tech solutions will save allow efficient planning based on well- access (through APIs, subscriptions, open Ÿ Allow private sector access to digital land water wastages and increase crop yield researched data repositories, enhance data portals, etc.) to this land record and thus records for utilization in Prop-Tech investment profile in the sector and Ÿ Use of technology in healthcare, particularly cannot utilize it in Prop-Tech. generate snowball impact. Ÿ Regulate and license property agents, devise EMRs and AI, will lead to predictive care, Ÿ National Need. It is estimated that 20 million and enforce a code of conduct, and maintain disease spread analytics, and accessible new houses will be needed across by 2030. and publish a registry and track record of and improved healthcare. property agents' transactions. Ÿ Regulation and Enforcement. There are 65 Ÿ Large scale renewables adoption by ICT Ÿ thousand housing societies in Pakistan, Digitize land parcels, using geospatial data, Industry will lead to improved national energy about half of which are not approved / which can then be used for construction, mix and reduced ICT operating expense.

87 88 PART RECOMMENDATIONS REQUIRING IMMEDIATE ACTIONS VI PART RECOMMENDATIONS REQUIRING IMMEDIATE ACTIONS VI Recommendations Requiring Immediate regulation to encourage foreign investment in revenues under a certain threshold or number of ICT sector; so that entrepreneurs don't have to employees under a certain threshold, reducing Actions establish holding companies abroad to utilize rate of income tax on ICT sector workforce, etc. foreign investment. Removing barriers to move Easy tax-free import of equipment and Immediate Impact Interventions training institutions for provision of skilled capital from Pakistan so that ICT industry is technology required by startup companies such manpower as ICT cities (Islamabad and Karachi encouraged to bring more than just operational as laptops etc. Exemption of payroll taxes for 1. Special Technology Zones (STZs) with to start with). expenses into Pakistan. Avoiding tax revenue employees who are working at a startup for 5 tailored facilities, essential infrastructure and losses due to drop shipping of international years. customized incentives geared towards facil- 3. Pakistan's Information Technology Agree- software licenses in Pakistan without paying any itating the ICT industry's ease of doing business ment (ITA) Accession: It can play an important local taxes, this practice is prevalent amongst 8. Encouraging/Incentivizing local ICT and global competitiveness; supported by role in fostering economic growth, in part by leading MNCs operating in Pakistan, incurring manufacturing by reducing import/custom appropriate legislation/act and overseen by an integrating Pakistan into global value chains for losses to national exchequer. regime on plant, equipment, electrical comp- Authority, in line with SEZ Act but customized to the production of ICT goods and services. onents and machinery used in ICT industry. suit the requirements of the ICT industry; to be 6. Current, accurate industry stats and bench- drafted in consultation with the ICT industry. 4. Setting up an empowered unit at PM Office marking study for ICT industry is required to 9. Subsidize employment of fresh graduates Government to provide enabling environment on ICT and Innovation to liaise with industry assess the complete landscape and establish working in the ICT sector by paying half of the (Land, power, banks, technical institutes to and monitor implementation of PM's vision on baseline. Stats such as Industry Size, Number of salary for the first year of employment (e.g. award requisite certificates and other basic ICT. Removing regulatory barriers and Companies, IT Graduates and their skill levels, average salary of fresh graduate = Rs 25,000 facilities). Instead of Govt. borrowing money for revamping NITB for leading digitalization of Number of Professionals employed etc. are per month = Rs 300,000 per annum; 20,000 ICT the development of these STZs, private industry Governance. Liaison with academic institutions required to plan our priorities and our action graduates per year x Rs. 150,000 per annum be encouraged to invest in infrastructure and leading industry players for working on plan. (Govt. 50% share) = Rs. 3 Billion per annum). It development as per their needs. National Strategies on IT, AI and Cyberspace. will improve employability of fresh graduates 7. Incentivize ICT industry via tax breaks/ 2. Announce one or two cities having hub of ICT 5. Appropriate legislation and easing-up of over- and encourage private sector to hire more, holiday e.g. for startups and SMEs with

91 92 Recommendations Requiring Immediate regulation to encourage foreign investment in revenues under a certain threshold or number of ICT sector; so that entrepreneurs don't have to employees under a certain threshold, reducing Actions establish holding companies abroad to utilize rate of income tax on ICT sector workforce, etc. foreign investment. Removing barriers to move Easy tax-free import of equipment and Immediate Impact Interventions training institutions for provision of skilled capital from Pakistan so that ICT industry is technology required by startup companies such manpower as ICT cities (Islamabad and Karachi encouraged to bring more than just operational as laptops etc. Exemption of payroll taxes for 1. Special Technology Zones (STZs) with to start with). expenses into Pakistan. Avoiding tax revenue employees who are working at a startup for 5 tailored facilities, essential infrastructure and losses due to drop shipping of international years. customized incentives geared towards facil- 3. Pakistan's Information Technology Agree- software licenses in Pakistan without paying any itating the ICT industry's ease of doing business ment (ITA) Accession: It can play an important local taxes, this practice is prevalent amongst 8. Encouraging/Incentivizing local ICT and global competitiveness; supported by role in fostering economic growth, in part by leading MNCs operating in Pakistan, incurring manufacturing by reducing import/custom appropriate legislation/act and overseen by an integrating Pakistan into global value chains for losses to national exchequer. regime on plant, equipment, electrical comp- Authority, in line with SEZ Act but customized to the production of ICT goods and services. onents and machinery used in ICT industry. suit the requirements of the ICT industry; to be 6. Current, accurate industry stats and bench- drafted in consultation with the ICT industry. 4. Setting up an empowered unit at PM Office marking study for ICT industry is required to 9. Subsidize employment of fresh graduates Government to provide enabling environment on ICT and Innovation to liaise with industry assess the complete landscape and establish working in the ICT sector by paying half of the (Land, power, banks, technical institutes to and monitor implementation of PM's vision on baseline. Stats such as Industry Size, Number of salary for the first year of employment (e.g. award requisite certificates and other basic ICT. Removing regulatory barriers and Companies, IT Graduates and their skill levels, average salary of fresh graduate = Rs 25,000 facilities). Instead of Govt. borrowing money for revamping NITB for leading digitalization of Number of Professionals employed etc. are per month = Rs 300,000 per annum; 20,000 ICT the development of these STZs, private industry Governance. Liaison with academic institutions required to plan our priorities and our action graduates per year x Rs. 150,000 per annum be encouraged to invest in infrastructure and leading industry players for working on plan. (Govt. 50% share) = Rs. 3 Billion per annum). It development as per their needs. National Strategies on IT, AI and Cyberspace. will improve employability of fresh graduates 7. Incentivize ICT industry via tax breaks/ 2. Announce one or two cities having hub of ICT 5. Appropriate legislation and easing-up of over- and encourage private sector to hire more, holiday e.g. for startups and SMEs with

91 92 increasing not only employment numbers but infrastructure directly contri-butes to about a day subject to providing a registration Pakistani universities, run in cooperation with also skills development. 1.5% of GDP in Emerging Markets. Expected certificate. Exits (winding up of companies) for ICT industry; HEC mandated closer industry- impact of $4.5 billion generation via this activity. tech businesses should be made easy as well, university linkages, requiring lecturer/professor 10. Create a level playing field for indige- even if there is a little debt. secondment to industry for skill refresh / industry nous companies that provide ICT services in 14. While addressing the security concerns, relevance training; accredited learning (credit Pakistan and compete with foreign companies restrictions on import of specialized IT equip- 18. For startups, exemption from all regul- hours) for 3-6 months placements of students in providing similar services in Pakistan but are ment (3D printers, drones/UAVs) may be atory compliances and audits for a period of the private sector; Talent hunting and identi- hosted/incorporated abroad i.e. by reducing reviewed. 3 years – this would include Labor Department, fication through aptitude test at school level, direct and indirect taxation on ICT products EOBI, FBR, Social Security etc. with an addi- followed by ICT scholarships program (under- /services that render Pakistani companies 15. Ensure adequate, stable and renewable tional 2-year exemption following a simple self- graduate). uncompetitive. power supply for the ICT sector, at least in declaration or until the startup size grows to 50+ STZs catchment areas. Ease-up wheeling of employees; Exemption on startup from all 21. Revamp and enrich skill-based curricula 11. Restrict public sector entities to bid for public energy for ICT sector to encourage private corporate taxes including WHT, GST, Corporate for ICT sector universities, colleges and sector ICT related tenders. Amendment of sector investment in renewables, while bringing Income Tax, E-Commerce or Digital taxes for 5 institutes. ICT skilled based advance certifi- PPRA rules to make it easier for startups to down the operational costs of Data Centers. years. cations need to be launched at national level to qualify. meet international job market. Companies such 16. Incentivize digital payments e.g. by 19. Tax exemption for Angels Investors and as Microsoft, VMware, IBM can be incentivized 12. Establish ICT Export Development Fund in reducing sales tax on domestic e-commerce. It Venture Capitals on funds dedicated for to invest in training our human pool. line with Export Development Fund, under an will not only help increase consumer spending investment in startups; Reduce Capital Gains autonomous Secretariat / Wing in MoITT or but also improve documented economy num- tax from the proceeds of investments made in 22. Special rules by SBP for transaction of forex MoST. bers (discourage cash on delivery); Facil-itate startups (Example of Small Enterprise Inves- by ICT Companies. international payment service providers to tment Scheme (SEIS) in UK); Govt. backed 13. Declare fiber optic connectivity an operate in Pakistan; expedite digital banking credit guarantee scheme for startups, for 23. Introduction of PayPal and similar services in essential utility; formulate a National Right of adoption. collateral-free, fund and non-fund based credit Pakistani Market. Way Policy and National Fiber Strategy, harm- support for at least 10,000 startups in 5 years. onize right of way tariffs across juris-dictions, 17. Simplification of process by SECP for 24. Incentives for return of Pakistani origin IT which is pivotal to address connectivity startups to offer stock options to employees 20. Industry relevant ICT skills development Professionals (both to employee and employer). challenge. A 10% increase in broadband (ESOPs); Easy opening up of a Bank Account in programs for undergraduate students across

93 94 increasing not only employment numbers but infrastructure directly contri-butes to about a day subject to providing a registration Pakistani universities, run in cooperation with also skills development. 1.5% of GDP in Emerging Markets. Expected certificate. Exits (winding up of companies) for ICT industry; HEC mandated closer industry- impact of $4.5 billion generation via this activity. tech businesses should be made easy as well, university linkages, requiring lecturer/professor 10. Create a level playing field for indige- even if there is a little debt. secondment to industry for skill refresh / industry nous companies that provide ICT services in 14. While addressing the security concerns, relevance training; accredited learning (credit Pakistan and compete with foreign companies restrictions on import of specialized IT equip- 18. For startups, exemption from all regul- hours) for 3-6 months placements of students in providing similar services in Pakistan but are ment (3D printers, drones/UAVs) may be atory compliances and audits for a period of the private sector; Talent hunting and identi- hosted/incorporated abroad i.e. by reducing reviewed. 3 years – this would include Labor Department, fication through aptitude test at school level, direct and indirect taxation on ICT products EOBI, FBR, Social Security etc. with an addi- followed by ICT scholarships program (under- /services that render Pakistani companies 15. Ensure adequate, stable and renewable tional 2-year exemption following a simple self- graduate). uncompetitive. power supply for the ICT sector, at least in declaration or until the startup size grows to 50+ STZs catchment areas. Ease-up wheeling of employees; Exemption on startup from all 21. Revamp and enrich skill-based curricula 11. Restrict public sector entities to bid for public energy for ICT sector to encourage private corporate taxes including WHT, GST, Corporate for ICT sector universities, colleges and sector ICT related tenders. Amendment of sector investment in renewables, while bringing Income Tax, E-Commerce or Digital taxes for 5 institutes. ICT skilled based advance certifi- PPRA rules to make it easier for startups to down the operational costs of Data Centers. years. cations need to be launched at national level to qualify. meet international job market. Companies such 16. Incentivize digital payments e.g. by 19. Tax exemption for Angels Investors and as Microsoft, VMware, IBM can be incentivized 12. Establish ICT Export Development Fund in reducing sales tax on domestic e-commerce. It Venture Capitals on funds dedicated for to invest in training our human pool. line with Export Development Fund, under an will not only help increase consumer spending investment in startups; Reduce Capital Gains autonomous Secretariat / Wing in MoITT or but also improve documented economy num- tax from the proceeds of investments made in 22. Special rules by SBP for transaction of forex MoST. bers (discourage cash on delivery); Facil-itate startups (Example of Small Enterprise Inves- by ICT Companies. international payment service providers to tment Scheme (SEIS) in UK); Govt. backed 13. Declare fiber optic connectivity an operate in Pakistan; expedite digital banking credit guarantee scheme for startups, for 23. Introduction of PayPal and similar services in essential utility; formulate a National Right of adoption. collateral-free, fund and non-fund based credit Pakistani Market. Way Policy and National Fiber Strategy, harm- support for at least 10,000 startups in 5 years. onize right of way tariffs across juris-dictions, 17. Simplification of process by SECP for 24. Incentives for return of Pakistani origin IT which is pivotal to address connectivity startups to offer stock options to employees 20. Industry relevant ICT skills development Professionals (both to employee and employer). challenge. A 10% increase in broadband (ESOPs); Easy opening up of a Bank Account in programs for undergraduate students across

93 94 25. Provision of legal and professional advice to capitals. Also convert all provincial capitals as technologies. legislate laws on the subject; thereby enforcing software houses. ICT Cities. legislated regulations upon foreign content and 34. Mandate Electronic Health Records to be service providers. 26. ICT industry leaders to meet regularly 30. National ICT Policy/Digital Pakistan maintained and telemedicine facilities provided through MoITT, PSEB, PASHA or any other ICT Policy 2021 to be formulated afresh, with at all public and private hospitals. 40. Reset and redefine fiber/terrestrial broad- related governing body for bridging the gap industry input, accompanied by sector-wise band penetration targets; adopt aggressive between Government and private sector. strategy documents that set targets, specify 35. Special courts with requisite ICT sector targets; maximize broadband penetration by implementation mechanisms and assign knowledge to expedite dispensing justice and incentivizing investment on fiber optic connec- Medium Term Impact Interventions responsibility to Ministries/Departments, e.g. resolving any disputes related to ICT sector. tivity infrastructure (bring best in the region OFC National AI Strategy, National Broadband penetration in next three years). 27. Expand domestic ICT sector market size Strategy, National ICT Skills Development 36. Promoting Agri-tech startups and innovation, by adopting 'Made in Pakistan' policy for all Strategy, etc. Public sector ICT projects and promoting Precision Farming adoption to 41. Incentivize additional submarine cables public sector ICT related projects. ICT sector funding (e.g. IGNITE, HEC, etc.) to be linked to reduce water wastage in Pakistan's agriculture to land in Pakistan (Pakistan has 6, India has tenders/RFPs to mandate 70% budget to be National IT Policy and sector-wise Strategies. sector and increase in crop yield, education of 20, Oman has 13). Incentives should include tax spent on Made in Pakistan software products farmers on precision farming techniques, holiday on setting up Submarine landing station /services; Mandate that at least 30% 'Made in 31. Access to capital for start-ups and SMEs access to knowledgebase, training and tools to and relaxation in import duties for equipment Pakistan' technologies to be used in Telecom- is a real problem. Establish a government practice precision farming. that is not manufactured locally. munication industry, to encourage local manuf- backed VC Fund for investment in ICT startups acturing. directly or provide local business the leverage to 37. Resolve IoT Spectrum allocation matter 42. Incentivize establishment of domestic invest in startups (shared risk). for transition of urban centers into smart cities. data centers; remove prohibition of Govt. 28. Focused and sustained attention of relevant services/content to be hosted at NTC; allow non- ministries towards improving Pakistan's 32. Increased Government spending on R&D Long Term Impact Interventions sensitive content to be hosted by private entities annual rankings in global indicators innovation to spur labor productivity and e.g. PTCL, other private sector providers. pertaining to ICT. Assign lead role and integration of ICT with broader economy. 38. Addition of new STZs in other major cities responsibility to MoITT for ICT sector indicators across Pakistan. 43. Direct all government functions to be monitoring and improvements. 33. Accelerated adoption of rapidly developing digitalized and automated (not just e-office, technologies such as Robotic Process Autom- 39. Decide and define Pakistan's stance on but rather all internal and citizen facing 29. Addition of new STZs in all provincial ation, AI, Machine Learning, IoT, and 5G cyberspace sovereignty; specify policy and functions); target a truly digital governance

95 96 25. Provision of legal and professional advice to capitals. Also convert all provincial capitals as technologies. legislate laws on the subject; thereby enforcing software houses. ICT Cities. legislated regulations upon foreign content and 34. Mandate Electronic Health Records to be service providers. 26. ICT industry leaders to meet regularly 30. National ICT Policy/Digital Pakistan maintained and telemedicine facilities provided through MoITT, PSEB, PASHA or any other ICT Policy 2021 to be formulated afresh, with at all public and private hospitals. 40. Reset and redefine fiber/terrestrial broad- related governing body for bridging the gap industry input, accompanied by sector-wise band penetration targets; adopt aggressive between Government and private sector. strategy documents that set targets, specify 35. Special courts with requisite ICT sector targets; maximize broadband penetration by implementation mechanisms and assign knowledge to expedite dispensing justice and incentivizing investment on fiber optic connec- Medium Term Impact Interventions responsibility to Ministries/Departments, e.g. resolving any disputes related to ICT sector. tivity infrastructure (bring best in the region OFC National AI Strategy, National Broadband penetration in next three years). 27. Expand domestic ICT sector market size Strategy, National ICT Skills Development 36. Promoting Agri-tech startups and innovation, by adopting 'Made in Pakistan' policy for all Strategy, etc. Public sector ICT projects and promoting Precision Farming adoption to 41. Incentivize additional submarine cables public sector ICT related projects. ICT sector funding (e.g. IGNITE, HEC, etc.) to be linked to reduce water wastage in Pakistan's agriculture to land in Pakistan (Pakistan has 6, India has tenders/RFPs to mandate 70% budget to be National IT Policy and sector-wise Strategies. sector and increase in crop yield, education of 20, Oman has 13). Incentives should include tax spent on Made in Pakistan software products farmers on precision farming techniques, holiday on setting up Submarine landing station /services; Mandate that at least 30% 'Made in 31. Access to capital for start-ups and SMEs access to knowledgebase, training and tools to and relaxation in import duties for equipment Pakistan' technologies to be used in Telecom- is a real problem. Establish a government practice precision farming. that is not manufactured locally. munication industry, to encourage local manuf- backed VC Fund for investment in ICT startups acturing. directly or provide local business the leverage to 37. Resolve IoT Spectrum allocation matter 42. Incentivize establishment of domestic invest in startups (shared risk). for transition of urban centers into smart cities. data centers; remove prohibition of Govt. 28. Focused and sustained attention of relevant services/content to be hosted at NTC; allow non- ministries towards improving Pakistan's 32. Increased Government spending on R&D Long Term Impact Interventions sensitive content to be hosted by private entities annual rankings in global indicators innovation to spur labor productivity and e.g. PTCL, other private sector providers. pertaining to ICT. Assign lead role and integration of ICT with broader economy. 38. Addition of new STZs in other major cities responsibility to MoITT for ICT sector indicators across Pakistan. 43. Direct all government functions to be monitoring and improvements. 33. Accelerated adoption of rapidly developing digitalized and automated (not just e-office, technologies such as Robotic Process Autom- 39. Decide and define Pakistan's stance on but rather all internal and citizen facing 29. Addition of new STZs in all provincial ation, AI, Machine Learning, IoT, and 5G cyberspace sovereignty; specify policy and functions); target a truly digital governance

95 96 model in the long run. Pakistan's ICT sector. Visa regime assistance also required for the ease of shuttling of ICT 44. Regulate and license property agents, resources. digitize land parcels. 47. Enabling access to risk capital for encou- 45. Steady inclusion of renewable sources in raging innovation and entrepreneurship. Govt. power infrastructure, reducing lines losses and should set up a large fund or leverage Ignite's infrastructure inefficiencies, bring power tariffs to fund for seed money to be given to the regionally competitive levels. Incubators for investing in startups. This fund should also help startups to file for the 46. Improve brand image of Pakistan, utilizing international patents where the Government embassies and foreign missions to promote the bears the cost for such IP filing.

ANNEXES

97 model in the long run. Pakistan's ICT sector. Visa regime assistance also required for the ease of shuttling of ICT 44. Regulate and license property agents, resources. digitize land parcels. 47. Enabling access to risk capital for encou- 45. Steady inclusion of renewable sources in raging innovation and entrepreneurship. Govt. power infrastructure, reducing lines losses and should set up a large fund or leverage Ignite's infrastructure inefficiencies, bring power tariffs to fund for seed money to be given to the regionally competitive levels. Incubators for investing in startups. This fund should also help startups to file for the 46. Improve brand image of Pakistan, utilizing international patents where the Government embassies and foreign missions to promote the bears the cost for such IP filing.

ANNEXES

97 Annex A Annex B

Program Top Global Outsourcing Destinations 7th October 2020 Factors: Financial Aracveness, People Skills and Availability, Business Environment and “Digital Resonance” Time (Hrs) Activity Remarks

0915-0945 Arrival of Participants/Registration Javed Sultan (JS) Hall, ISSRA

1000 Arrival of Guest of Honour VIP Reception NDU

1000-1015 Discussion of Guest of Honour with President NDU President NDU

and DG ISSRA Oﬃce

1015 Arrival of Guest of Honour JS Hall, ISSRA

1015-1020 Recitation of Holy Quran ‘’

1020-1100 Interactive Session ‘’

1105 Arrival of Chief Guest ‘’

1105-11 15 Welcome Remarks by President NDU ‘’

1115-1145 Presentation by NDU (Maj Gen Asif Ali, HI (M), DG ‘’ ISSRA): Findings/Recommendations on the Subject (30 Mins)

1145-1200 Address by Chief Guest Chief Guest Departs at 1200

1200-1230 Tea Break ISSRA Lounge

1230 Departure -

99 100 Annex A Annex B

Program Top Global Outsourcing Destinations 7th October 2020 Factors: Financial Aracveness, People Skills and Availability, Business Environment and “Digital Resonance” Time (Hrs) Activity Remarks

0915-0945 Arrival of Participants/Registration Javed Sultan (JS) Hall, ISSRA

1000 Arrival of Guest of Honour VIP Reception NDU

1000-1015 Discussion of Guest of Honour with President NDU President NDU and DG ISSRA Oﬃce

1015 Arrival of Guest of Honour JS Hall, ISSRA

1015-1020 Recitation of Holy Quran ‘’

1020-1100 Interactive Session ‘’

1105 Arrival of Chief Guest ‘’

1105-11 15 Welcome Remarks by President NDU ‘’

1115-1145 Presentation by NDU (Maj Gen Asif Ali, HI (M), DG ‘’ ISSRA): Findings/Recommendations on the Subject (30 Mins)

1145-1200 Address by Chief Guest Chief Guest Departs at 1200

1200-1230 Tea Break ISSRA Lounge

1230 Departure -

99 100 Annex C Annex D

Top Global Outsourcing Destinations Factors: Financial Aracveness, People Skills and Availability, Business Environment and “Digital Resonance”

101 102 Annex C Annex D

Top Global Outsourcing Destinations Factors: Financial Aracveness, People Skills and Availability, Business Environment and “Digital Resonance”

101 102 Annex E Annex F

103 104 Annex E Annex F

103 104 Annex G Annex H Internet Speed of Peer Group Countries

Country Terrestrial Broadband Mobile Broadband Pakistan 9.02 Mbps 13.55 Mbps

Bangladesh 22.13 Mbps 10.23 Mbps

Vietnam 38.64 Mbps 24.60 Mbps

Nepal 20.38 Mbps 10.70 Mbps

Laos 19.27 Mbps 27.18 Mbps

Indonesia 19.09 Mbps 11.77 Mbps India 30.74 Mbps 10.63 Mbps

Singapore 191.93 Mbps 50.43 Mbps Taiwan 151.75 Mbps 43.66 Mbps

South Korea 156.18 Mbps 97.44 Mbps

The terrestrial broadband is generally faster and cheaper than mobile broadband. Source: Speed test Global Index (July 2020)

105 106 Annex G Annex H Internet Speed of Peer Group Countries

Country Terrestrial Broadband Mobile Broadband Pakistan 9.02 Mbps 13.55 Mbps

Bangladesh 22.13 Mbps 10.23 Mbps

Vietnam 38.64 Mbps 24.60 Mbps

Nepal 20.38 Mbps 10.70 Mbps

Laos 19.27 Mbps 27.18 Mbps

Indonesia 19.09 Mbps 11.77 Mbps India 30.74 Mbps 10.63 Mbps

Singapore 191.93 Mbps 50.43 Mbps Taiwan 151.75 Mbps 43.66 Mbps

South Korea 156.18 Mbps 97.44 Mbps

The terrestrial broadband is generally faster and cheaper than mobile broadband. Source: Speed test Global Index (July 2020)

105 106 Annex I Annex J Domestic Capacity Building

Domestic Revenues & Exports are co-related $1bn Domestic: $3bn Exports Because Domesc Supports Capacity Building: o Exports Capacity o Import Substuon o Employment Creaon o Skill Development o Build Proﬁle/Brand o Product Development & Local Innovaon

107 108 Annex I Annex J Domestic Capacity Building

107 108 PICTURE GALLERY PICTURE GALLERY

National Defence University Islamabad-Pakistan