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Software sector contributed over 50% to IT Exports in FY23

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Software sector contributed over 50% to IT Exports in FY23

Software sector contributed over 50% to IT Exports in FY23

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  • Pakistan’s IT sector maintained its focus on the software industry, contributing 52% of IT exports in FY23.
  • IT contributes 35% to service sector exports, ranking as the second-highest export sector after textiles.
  • Tufail Ahmed Khan, CEO of PAFLA, acknowledges freelancers’ significant role in IT sector exports.
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In FY23, Pakistan’s IT firms maintained their involvement in the software industry, accounting for 52% of IT exports.

Data from the State Bank of Pakistan (SBP) reveals that software consultancy and computer software exports reached $1.36 billion within the total exports of $2.61 billion for FY23.

Mainly focusing on software and related services, Pakistan’s exports are predominantly driven by its software industry due to the relatively underdeveloped hardware sector. Additionally, FY23’s official statistics encompassed export earnings of $743 million within the category of Other Computer Services.

According to a recent report by the central bank, an estimated $1.5 billion of IT (including software and software consultancy) and IT-enabled exports were potentially in the informal market in 2019. Current industry estimates suggest this figure could have expanded to $2.5 billion by FY22.

The majority of Pakistan’s IT exports are led by smaller software exporters, with most exporting less than $0.1 million annually. The report highlights a lack of diversification in IT exports, with the US accounting for over half of the share.

Noman Said, CEO of SI Global Solutions and a software exporter, emphasized the need for the government to establish a consistent policy that supports IT exporters. This policy should encompass foreign exchange accounts, incentives, and tax holidays, particularly focused on enhancing software exports.

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Said emphasized that Pakistan should broaden its horizons by targeting both traditional and non-traditional markets for software exports. This includes European countries, GCC states, African nations, and the Asian-Pacific region.

He further mentioned that all players in the IT sector, including educational institutions, should work together more closely to advance ICT education in the nation. This is vital to ensuring a consistent supply of new talent for the industry. To achieve this, offering short courses and boot camps in ICT should be a top priority for recent graduates. He also highlighted the importance of motivating graduates and professionals from non-IT backgrounds to acquire IT skills and initiate freelancing on basic IT projects.

With a notable 35% contribution, IT stands as a significant contributor to service sector exports. Following the textile industry, IT ranks as the second-most successful export sector.

Tufail Ahmed Khan, CEO of the Pakistan Freelancers Association (PAFLA), highlighted the noteworthy role of freelancers within the IT sector. Despite facing numerous difficulties and obstacles, freelancers make a considerable contribution to overall IT exports and bring in remittances.

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He suggested that the government collaborate with the private sector to motivate students and young professionals to become self-employed, offering their expertise on freelancing platforms across both technical and non-technical domains. This approach could help the country acquire essential foreign exchange.

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The surge in remote job opportunities has gained momentum as numerous prominent IT companies in developed nations opt to outsource their projects. According to him, Pakistani IT graduates should actively pursue these projects and aim to deliver top-notch work in large quantities. This concerted effort could position Pakistan as the preferred destination for foreign companies seeking outsourcing partnerships.

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