The Chronicles of Our IT Sector and Freelancers – Roadblocks, Potential

Written by: Nayyar Qureshi The chronicles of a giant, called the IT sector of Pakistan, despite all challenges, hold an exceptional future. With a population of over 230 million with above 60% below the age of 30, the workforce is readily available and tech-friendly. The use of the Internet has been highly increasing, and the freelance market is in operation. Freelancing platforms i.e. Upwork and Fiverr rank Pakistan as one of the leading freelancing nations, while our start-ups in fintech, e-commerce, and AI are slowly making their mark around the globe. The IT exports crossed the US$2.5 billion mark last year, according to the Pakistan Software Export Board, depicting gradual growth. Initiatives such as the Special Technology Zones Authority and IT export taxation exemptions also denote that the government indebts the due appreciation of this sector. This is nonetheless a fraction of what it should be when compared to regional competitors like India, which exports $200 billion in IT exports annually. I can still recall how one late night my cousin Ali, a freelance web developer from Karachi, was just frustrated that painfully slow internet speeds delayed his work. His business required the product to be delivered in the nick of time, and the coincidence of government-imposed VPN restrictions and reduced internet speed had left him in tatters. Ali’s story is like numerous others from Pakistan’s IT sector blend of seeming paradox, huge potential being harnessed by systemic constraints. Ali started his freelancing career with tiny projects, but within a couple of years, he handled many contracts across Europe and North America, which showed his steady growth, representing the growing trend in Pakistan. Around 1.5 million freelancers in Pakistan contribute to the gig economy globally. Pakistan’s IT sector with exports of over $3.2 billion in the fiscal year 2023-24, is among those sectors that are resilient to broader economic challenges and issues. Yet, this progress may decline if structural inefficiencies persist. Unfortunately, like many other sectors, the policies, rules, and regulations in this sector are also formulated with the interests of large corporations of software houses, leaving the freelancers on an uneven playing field. Policies often turn out to be a roadblock for freelancers to thrive well in the business. The fact remains a fact that a series of blows over the last year has delivered a heavy blow to growth in the IT industry in Pakistan. The internet speeds were downed by as much as 40 percent, somewhat because of faults in two international submarine cables and an increased tendency to depend on VPNs in order to bypass restrictions on various platforms including WhatsApp and X (formerly Twitter). Government efforts to hone digital security have had the undesired consequence of crippling businesses reliant on consistent internet connectivity. Freelancers like Ali, using VPNs to communicate with foreign clients have become part of his daily frustration as connections become unpredictable and slow. A few days ago, the introduction of compulsory VPN registration was significantly criticized and not well taken. For freelancers using VPNs to connect to foreign clients due to the nature of their tasks find the whole registration process cumbersome and another bureaucratic hurdle that delays work for them and many other start-ups that are in dire need of uninterrupted and unrestricted access to global platforms. While many big-wigs are thinking of switching to some other friendly destinations to overcome this issue, where the freelancers and new start-ups will go? Are we going forward or backward? For Freelancers, these are more than just technical roadblocks; Bro, real money vanishes. According to the Pakistan Software Houses Association-P@SHA- slow and congested internet has resulted in losses of approximately $500 million in the last six months alone. Well, the reputational damage is far more than this, about which no one cares in Pakistan, many international clients discourage outsourcing projects to a country having unstable and low connectivity. To address these ongoing challenges, the Ministry of IT & Telecommunication has announced several counteractive measures. Submarine optic fiber cable repairs are underway, and the government is also planning to have more optic fiber cables to enhance internet connectivity which will help to expand broadband to cover all parts of the country to boost the digital infrastructure. Likewise, old government, the current government is also hopeful but all these actions are insufficient, if the root cause is not properly addressed. Deviation and Policy changes, irregular laws, and unforeseen changes in taxation laws, are the main hindrance to attracting foreign investment and a major source of frustration for local entrepreneurs. A stern issue in Pakistan is that policies are formulated at the wrong time which ultimately have a bad impact on the sector. Policies, rules, and regulations support and channel growth and have a positive impact, if drafted meticulously. We desperately need a long-term and stable policy framework as a nation to attract foreign and local investment. Tax exemption to freelancers and start-ups, even processes for earning exports, and less bureaucracy may help a lot. Sudden shifting of rules erodes confidence and disrupts operations. The desired growth result cannot be achieved without the required infrastructure development. I think, if the decision-makers are thinking that with the current infrastructure, we can achieve the desired IT export results, then it’s not possible at all. The government should focus on repairing cables that were bitten by sharks every time. Expansion of the fiber-optic coverage should be prioritized to bridge the urban-rural digital divide. Expanding Internet broadband into rural areas and introducing 5G services can democratize access to IT opportunities. According to HEC, we are producing up to 30,000 IT graduates annually but the real figure is way higher. According to the report, only 10% of these graduates possess the necessary skillsets to be employed, which, in other words, means that almost 90% of the IT graduates from our lot are either totally useless or only good for clerical jobs of data entry. This itself is a big question mark on our whole higher educational system and Universities. It’s said one cannot raise the quality just by packing it nicely if the product is substandard. It is expected that raising the quality of universities will provide a basis for getting over this issue. Like other sectors, the IT sector, particularly freelancers, has many dependencies such as Banking or Payment mechanisms, which directly influence the growth of freelancers. Many previous head-honchos of relevant ministries claimed to bring the world-renowned ‘PayPal’ payment platform to Pakistan, but it was all political claims and didn’t actually materialize. Although, PayPal is available in over 200 countries and to utter shock to the Pakistani public it is even available in countries like Nigeria and Kenya but not in Pakistan, I don’t know who the actual culprit is. I can vouch that the day PayPal is available, we will witness a massive growth in IT exports. These facts are evidence of the resilience of Pakistan’s IT professionals and industry but also their vulnerability against systemic hurdles. No doubt, with Pakistan’s young population base and an increasing global footprint, our IT sector is well-positioned to be strongly economic. This can only be materialized, if the government enhances the infrastructure, mitigates policy inconsistencies, and the digital divide. To enjoy the full economic benefits of the IT sector, Pakistan should adopt and implement policies that are particularly friendly for freelancers and the IT industry and attract FDI to help the country sail smoothly from this economic crisis. Nayyar Qureshi is a dynamic entrepreneur and tech enthusiast, showcasing a robust career in finance, assurance, and corporate governance. As the visionary founder of Nano Cyber, he leads a cutting-edge organization dedicated to Cyber R&D, cyber awareness sessions, and cybersecurity training. Beyond his professional roles, Nayyar serves as a motivator and life coach, inspiring individuals to achieve holistic personal development and resilience. His comprehensive profile reflects a leader who seamlessly blends entrepreneurship, tech innovation, financial proficiency, and ethical business practices, leaving a lasting impact on both industry and individuals alike.