Pakistan's digitally smart youth need government support, jobs

Many freelancers in Pakistan are young adults, under 30, looking to get a foothold in the domestic market.

By Waqar Mustafa

Published: Wed 28 Aug 2019, 8:00 PM

Last updated: Wed 28 Aug 2019, 10:35 PM

Pakistan is ranked fourth in the world in the growth of freelance earnings in the 2019 second quarter, raking up 47 per cent more than it did the same quarter in 2018, according to the global payment platform Payoneer's Global Gig Economy Index. The first three fastest-growing markets are the US with 78 per cent growth, the UK with 59 per cent and Brazil at 48 per cent. Many freelancers in Pakistan are young adults, under 30, looking to get a foothold in the domestic market, which according to Eyal Moldovan, general manager of Payoneer, isn't big and developed.
Pakistan entered quite late in the global Business Process Outsourcing (BPO) industry that had gained traction in Asian countries a few decades ago. Then, the country was hamstrung by an inadequate telecom infrastructure and a slow pace of skill-building of the human resource causing losses to the nascent export-oriented IT and IT-enabled service industry. However, in recent years, Pakistan's service-oriented information and communications technology (ICT) industry has reemerged, courtesy an improved telecommunication infrastructure, a growing focus of young people on technology, and a gradual improvement in the country's perception as a BPO destination.
Now, there are around 200,000 freelancers and more than 7,000 registered small and medium enterprises (SMEs) in the South Asian nation of 207 million people. A State Bank of Pakistan report says, Pakistan's ICT exports have touched $1 billion in the fiscal 2018. It's a first for the country. The report, however, cites industry experts placing the total size of Pakistan's ICT exports at around $2.5 billion. "Roughly $1 billion is attributed to SME exports in the grey market, and the remaining $0.5 billion is accounted for by freelancers in the IT and IT-enabled services (ITES) space that serve international clients."
The pace at which digital freelancing, which typically involves remote working for businesses and individuals from across the world, has thrived at in Pakistan is a good portent for the country's prosperity. But for a country with a majority of its population young, it also necessitates a robust strategy towards developing talent and skills to tap the potential freelancing offers. BPO is still not being pursued as a long-term career in Pakistan. New entrants lack technical and professional capacities. And so, focusing on skill building and improvement of payments infrastructure would be the key, according to the central bank.
Pakistan's Digital Pakistan Policy provides multiple tax incentives to the industry and envisions a strong interplay between IT firms, cellular operators, and government institutions. The central bank wants the government to embrace the idea of technology-centric Special Economic Zones (SEZs), where companies can take advantage of IT-ready plug-and-play clusters and operate under a one-window structure with the government.
The Ministry of Information Technology and Telecommunication and associated private enterprises have launched National Incubation Centers and the Digital Skills Training Program. Pakistani freelancers find massive open online course providers like Coursera, edX, Alison, etc. useful in improving and learning skills. Last year, Coursera collaborated with Pakistan (among six other countries) to provide training to 3,000 young professionals. Local universities that specialise in IT also need to focus more on the education quality, especially on developing programming/ coding skills in demand in the global market.
Although exchange services of intermediaries such as Payoneer and Skrill are available for individuals and startups associated with the freelancing and BPO industry, the State Bank of Pakistan sees the absence of PayPal - which both employers and freelancers consider relatively more convenient, cheap and safe - as a major concern. To facilitate freelancers and the BPO industry, SBP has recently allowed commercial payments through the bulk payment processing channel under the Pakistan Remittance Initiative (PRI), which may not perfectly substitute PayPal but can potentially provide some relief in the form of lower financial charges relative to other channels.
Digital freelancing holds significance for developing economies such as Pakistan's because it can generate employment at a very large scale. Enhanced internet access to more than 2,000 cities across Pakistan has resulted in a large number of young people entering the workforce. Improving the industry's fundamentals will mean going forward for millions of educated young people who are waiting in the wings to turn into productive individuals.
Waqar Mustafa is a multimedia journalist and commentator based in Lahore, Pakistan

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