ISLAMABAD, Nov 30 (INP-WealthPK): By unlocking digital potential Pakistan can accumulate a whopping Rs9.7 trillion ($9.7 billion) in annual value by 2030, enabling it to address the long-term implications of the Covid-19 pandemic and gain a sustained economic resilience. The digital transformation can potentially benefit the sectors of agriculture and food; consumer, retail and hospitality; and education and training. These projections have been made in a report titled ‘unlocking Pakistan’s digital transformation: the economic opportunities of digital transformation and Google’s contribution’ released by Google and AlphaBeta. The report sizes the potential economic value of technology applications for Pakistan, and identifies key actions needed to capture this opportunity. The report, prepared by economists at AlphaBeta, notes that the country’s vibrant technology sector has grown significantly in recent years and is well-positioned for further growth. The country is home to more than 300,000 Information Technology (IT) professionals, produces over 25,000 IT graduates annually, has nurtured over 700 tech start-ups since 2010, and has the fourth-highest-earning IT workforce in the world. Pakistan’s technology sector also has a large export element, with annual revenue from exports of IT and IT-enabled services (ITeS) accounting for over $2.1 billion in 2021 – which has grown at around 15% per year since 2010. In the past year alone, exports of IT and ITeS increased by 47%, driven by the Covid-19 pandemic which boosted the reliance on technology. Exports are expected to continue growing to reach $3.5 billion in 2022. Furthermore, the government has identified the creation of a holistic digital ecosystem – most prominently in its ‘Digital Pakistan Policy’ – as one of the key levers of economic growth. The Google report notes that despite these significant achievements, the country can go further in its digital transformation journey as Pakistan’s online population has grown rapidly at 68% per annum from 2016 to 2019, and the Internet penetration rate reached 54% in 2021. However, the country faces several hurdles to full digital transformation. For example, the World Economic Forum’s “Global Competitiveness Index 2019” ranked Pakistan as 73^rd out of 141 countries on the ability of the active working population to possess and use digital skills. Ensuring that all firms benefit from digital skills is also important in Pakistan given that micro, small and medium enterprises (MSMEs) constitute 90% of all enterprises, employ 80% of the non-agricultural labour force, and contribute to 40% of national GDP. Furthermore, digital transformation will be important to boost its economic recovery efforts and enhance the long-term resilience of businesses in adapting to future “black swan” events in the post-pandemic era. For example, the pandemic has caused severe disruptions to the business operations of MSMEs, heavily impacted the tourism sector, and driven the rapid growth of digital freelancing in Pakistan. These impacts can be managed by adopting digital technology applications that allow businesses to engage customers digitally, such as e-commerce platforms, or applications that create personalised experiences for customers in the tourism industry, such as big data analytics and virtual reality technologies. The report notes that there is a significant economic prize attached to accelerating Pakistan’s digital transformation. If fully leveraged by 2030, digital technologies could create up to Rs9.7 trillion ($59.7 billion) in economic value. This is equivalent to about 19% of the country’s GDP in 2020. According to the report, the machine learning algorithms have shown to be beneficial for the agricultural and food sector, where AI-powered technologies can monitor ecological conditions to determine whether crops need irrigation or not, reducing water use. The report identifies three areas where action is required to fully capture its digital opportunity, including developing infrastructure to support the local tech ecosystem; creating a conducive environment for IT exports, and promoting innovation and digital skills. The report notes that a range of policies has already been introduced by the Pakistani government to accelerate digital transformation such as the “Right of Way” policy, which expedites the expansion of telecom infrastructure, and the “Brand Pakistan” campaign, which promotes the country’s exports via digital platforms. However, there is further scope of actions for Pakistan to consider such as increasing Internet availability through infrastructure investments, especially in rural areas, creating an accommodative tax framework and easing restrictive data policies, and forging close public-private partnerships to improve the relevance of skills trainings. Farhan Qureshi, Regional Director, Pakistan, Bangladesh and Sri Lanka, Google, believes that despite the setbacks caused by the pandemic, the future for Pakistan's digital economy is bright. “At Google, we aim to play our part by equipping Pakistanis with helpful products and tools, tech know-how, and online safety skills. Going forward, we will continue working with partners like Pakistan Software Houses Association (P@SHA) and the various government agencies to help fulfill the “Digital Pakistan Vision.” Mr Qureshi says, “In order to be effective, digital transformation has to be inclusive. It is essential to make digital training opportunities accessible also to underrepresented communities and vulnerable groups. We recently launched a pilot programme with the National Rural Support Programme to equip more Pakistanis with online safety skills and digital literacy and reached more than 1,000 students in just two months. Our Grow-with-Google programme has trained over 5,500 SMEs on how to leverage digital tools to support the development of a digitally skilled workforce.” Commenting about the report, President Dr Arif Alvi said: “I was encouraged to see AlphaBeta’s finding that digital transformation could create Rs9.7 trillion in annual economic value in Pakistan by 2030. Realising this goal and the vision of Digital Pakistan will require a whole-of-nation approach, from both the public and private sectors. The efforts of groups like Google and P@SHA will be key. It is heartening to note that over 410,000 jobs are supported in Pakistan’s economy through the use of Google's products.” Badar Khushnood, Chairman P@SHA, says: "P@SHA represents thousands of technology companies and has been at the forefront of the #DigitalPakistan revolution. Our industry has seen record-breaking growth over the last few years and we strive to take it to the next level. P@SHA envisions to unleash the potential of IT and ITeS industry in Pakistan from all perspectives. To stay true to our vision, we focus on leading the industry narrative. From policy advocacy to ecosystem enablement and in-depth research and insights, P@SHA interventions have had a significant impact over the last two decades.” Krinza Momin, a data scientist at Afiniti, a multinational data and software company, says: “With the efforts that Google is plugging in for Pakistan, I am glad that we are part of platforms such as Google Developer Student Clubs, Google Developer Groups, Women Techmakers and Google Developer Experts. These programmes have enabled me and many others to have conversations with industry experts in Pakistan and worldwide, which have also created global avenues for us to learn from. Pakistan can truly position itself around startups and innovation to fuel economic prosperity.”