Amir Saeed

The Information and Communication Technology (ICT) industry has reached a milestone, with exports surpassing $3 billion in FY 2024. However, despite this achievement, the industry’s growth rate has hit a decade low. Talking to WealthPK, Anees Amin, Chief Executive Officer (CEO) at TechScape Private Limited, said the ICT industry had been a significant contributor to the country’s economy, with exports growing steadily over the years. However, the latest figures show that the growth rate has slowed down significantly. In 2023, the growth rate was 2.5 percent, the slowest in 14 years. Furthermore, the telecom services exports fell unexpectedly by 0.5 percent, in contrast to the industry’s generally strong growth. This contradiction illustrates the sector’s challenges, with exports hardly moving forward, marking the slowest growth phase in more than a decade. He said the ongoing global macroeconomic slowdown, marked by mild recessions in key markets and high interest rates, has had a ripple effect on the ICT industry. As a result, the discretionary spending has been curtailed, leading to a slowdown in the sector. This phenomenon is not unique to the country, as even global giants like Infosys and Tata Consultancy Services are experiencing unprecedented sluggishness, underscoring widespread impact of the economic downturn on the technology industry.

The TechScape Private Limited CEO pointed out that the ICT sector was also facing challenges from the ongoing global digital transformation, which was changing the way the businesses operated. The industry needs to adapt to the changes and invest in new technologies and innovations to remain competitive. He suggested that the country had to learn from the success stories of Japan, Poland, and Romania, which had grown their ICT exports exponentially in recent years. To revitalize the sector’s growth, the government should implement policies that foster innovation, entrepreneurship, and international collaborations rather than relying on short-term gains, he added. Talking to WealthPK, Maher Nafees, a software engineer at the software development company Tkxel, said despite achieving a milestone of $3 billion in exports, the sector’s growth rate was vulnerable to domestic economic fluctuations due to its small size, with most firms generating less than $100,000 in revenue. He insisted upon the need for diversification and value addition.

The ICT industry must expand its export markets beyond the traditional hubs of the US and UAE. Moreover, it needs to invest in value-added services like software development, data analytics, and cybersecurity to move up the value chain. The industry relies heavily on a stable internet connection to deliver services, and disruptions lead to substantial losses in productivity, revenue, and reputation. Prioritizing internet infrastructure development is crucial to ensuring a reliable and resilient connection that supports the growth of the ICT industry. “There’s a need to do more to address the challenges facing the industry. The government should provide more support for research and development, improve the business environment, and promote the industry globally,” he asserted.

Credit: INP-WealthPk