Pakistan’s Software Industry

``tomorrow can and will be radically different``. This is what we should hope for and work towards .......

nice informative article.
I do however, wonder why we are always behind in technological changes?. Is it our education system, our political system or our lack of interest?

sajal

There three questions that I want to ask:

1. Are you a graduate of the PAF`s college of aeronautical engineering........

2. Why does Pakistan keep comparing it`s IT industry with India. Why not compare it with other closer competitors, which are in the same league, like Estonia, and Phillipines etc.?

3. How is travel in the Western world, with Osama as a name. I have always wondered about that..........

I have been looking for sometime to find out, how many engineers graduate each year from Engineering Colleges in Paksitan, I would appreciate the link to the source and the answer?

Thank you.
Anil Kapuria

re: Athar

A very informative article indeed. Do you know if a similar study has been done for the BPO industry especially call centers in Pakistan?

#1 by sajal

``I do however, wonder why we are always behind in technological changes?.``

Firstly, Pakistan is not behind in all technological changes. In the telecomm sector, for example, Pakistan is keeping pace with Europe.

Speaking of IT, the number one reason that America is leading the technological revolution is availability of Capital. Capital is the mother`s milk of innovation. And in America there was plenty of capital to finance all types of ventures, in the form of venture capitalists, angel investors and investment banks.

In contrast, Pakistani capital markets faced a several crisis during the 1990s. Bad debts had crippled the lending capability of Pakistani banks (thanks largely to Mian Nawaz Sharif, the Chaudhries, and dozens of industrialist-turned-politicians). Moreover, investment banking and venture capital in Pakistan is virtually nonexistent. A prospective entrepreneur has to bear the entire risk of his venture. On top of that, Pakistanis are also notorious for being bad business partners.

The recent upswing in Pakistan`s IT market is largely because capital markets are getting healthier in Pakistan. Interest rates have fallen. Still this growth is rather limited because not everyone can get a bank loan. To further fuel the growth, we need atleast half a dozen venture capital funds such as TRG. Pakistani expatriates in the U.S. can play a big part in this. Pakistani expatriates in USA have a capital base of $250 billion (according to Shahid Javed Burki, ex-World Bank official). Most of this capital is invested in housing, life annuities and small family businesses. If even 1% of this capital is invested in Pakistan`s IT industry, the industry will break the 200-employee barrier as well as the revenue ceiling.

HisExcellency #4: ``Capital. Capital is the mother`s milk of innovation.``

This is probably true in general. But do you think it is true for IT. Specifically for the software side. Even more specifically for the services side. And even more specifically for off-shore services..........

Is it Capital or Human Resources that is the mother`s milk for the software services industry. Obviously both. But I would tilt towards human resources. For example, I am currently looking for some Venture funding. Before the .com bubble burst, any Tom Dick and Harry could get five million dollars. And legitimate entreprenuers got many times that.

Now, it is impossible to get any Venture funding, unless one has a technical innovation (more on the hardware and networking side), or if one is beyond the pre-profit stage and actually has profits on a stable business model (i.e one is already through the stage where Venture money is the most needed). For purely services, it is even more difficult. If not impossible.

So will the future of a services company be decided by how much Capital it can or cannot get. Or by how good the people are at what they do? i.e. Are average HR with above-average Capital going to be more successful than above-average HR with average or below-average Capital (specifically in the software services industry), which resembles the art industry, in some ways, i.e. material is cheap, human skills are expensive?

What do you think.........

Here we go again...Capt Clueless pretending he has a clue..trying to pass himself off as an IT businessman...

#2 by Romair on March 11, 2005 11:19am PT


2. Why does Pakistan keep comparing it`s IT industry with India. Why not compare it with other closer competitors, which are in the same league, like Estonia, and Phillipines etc.?


Yes...why don`t we? As this Kearney report makes clear, Phillipines is way out of your league...As is Costa Rica...


For example, I am currently looking for some Venture funding.


Venture capitalists don`t fund dunkin donuts franchises...

why don`t you just stick to telling us how south Indians aren`t good at running IT companies and how for an IT company to work, you need Pakistani leadership skills....

Rather than blindly copying the already well-established countries and players, we must think creatively to devise a model that best suits our own strengths and weaknesses.


So what are you strengths? your analysis doesn`t make that clear...

If you are grouping companies, you can add another grouping to your study....companies founded and led by inventors i.e. guys who really get it..guys who started their company after doing some kick-butt coding...These companies are the most innovative because the CEO usually gets it...
Then there are IT companies started by industrial powerhouses that are not in the business of IT...These companies usually poach talent from other companies...

what happened to Avaz Networks who claimed dev. in Lahore deveoping chip-sets? (Shafi of AST was the founder ?)

Athar Osama:
This is the kind of articles CHOWK needs. Productive, purposeful, and upbeat.

The ``psychoanalytical`` type of third rate intellectualism that gets prominence here is by non-achievers who were ``employed`` but had never a chance to use their brains.

Pakistan needs more `doers` the technological types ( polytechnic ones) rather than afsar-shahi
``engineers`` (the Thhupaa lagaaoo-paper pushers & moneymakers). There is need to learn from our advanced mazdoors, and farmers rather than from some westernised ``reasearchers``.

Is`nt it is a surprise that the goraa travels all over the world bears the sun, snow & rain; talks to our ``common`` ( read uncommon & brilliant) man on the street, farm, and factory and LEARNS from them . Then he reapackages this ``knowledge`` as his & teaches it to our
anglo-freaked Ba Ba Blacksheep lowlifes.

The entire western pharmacopia, IT ( Ramanujan) and every field of knowledge has been colonised & harvested by the Western thuggs & like the Lankashire Mills this is being resold to the starving ( brain-drained) and famine-stricken ( looted advanced civilisations) nations of the world.

It is this Westernised mindset among us that has to be crushed in our homelands.

PS: Safi Qureshi is a great example. Polytechnic guy. bearded. Fundamentalist practicing proud muslim.CBC even showed him offering his prayers, when they ran a eulogising documentary on him.Advisor to Clinton one time ( I heard so)..and thoroughly muslim & Pakistani.

Pakistani software industry will not take off until they get Osama monkey off their backs.
All it takes is a warning from Western governments to dissuade Western companies from doing business. It is not like firms in the West do not have other alternatives.

`` Why does Pakistan keep comparing it`s IT industry with India. Why not compare it with other closer competitors, which are in the same league, like Estonia, and Phillipines etc.? ``

Estonia has a population of 3-4 million. Find someone else to compare to. Philippines has a good call center industry. It fits in well due to their English skills and knowledge of American culture. I do not know of any major concentration of software development.

Romair#2

IT is one sector of the economy where Pakistan can truly leverage its relationship with India in a huge way. Indian IT companies can provide the capital necessary to invest in Pakistan and setup joint ventures with Pakistani businesses. That would open up an additional pool of labor to Indian companies and open new sources of revenue and income for both Indian and the Pakistani economies. In addition, the knowledge transfer would help Pakistan catch up much faster than if it tries to do everything on its own.

Pakistan could reciprocate for the above by doing three things - setup gas pipelines as per the vision of the energy corridor to India, allow transit of Indian goods to Central Asia with protections against smuggling and thirdly offer MFN status as a way to take the commercial relationship to a new level. Of course, we can add the standard disclaimer that the two parties will continue a sustained composite dialogue on Kashmir, but it is now high time that the two countries exploit the commercial ties to the fullest extent.

On a side note, I read that a Pakistani visitor to Mohali received free abdominal surgery just because he was a guest from Pakistan, while Pakistanis in general have been overwhelmed with the freebies being given to them by everyone!! Just shows how much goodwill is there between the two people.

HisExcellency #4

`` Firstly, Pakistan is not behind in all technological changes. In the telecomm sector, for example, Pakistan is keeping pace with Europe. ``

In what sense ? Does Pakistan have the same density of telephone lines or same number of cellphone users as Europe ? What good are all those telephones and cellphones if you are chatting aimlessly ? What good are those broadband connections if it is only used for smut.

`` Speaking of IT, the number one reason that America is leading the technological revolution is availability of Capital. Capital is the mother`s milk of innovation. And in America there was plenty of capital to finance all types of ventures, in the form of venture capitalists, angel investors and investment banks. ``

True. But you do not need large amounts of financial capital for outsourcing industry.

`` In contrast, Pakistani capital markets faced a several crisis during the 1990s. Bad debts had crippled the lending capability of Pakistani banks (thanks largely to Mian Nawaz Sharif, the Chaudhries, and dozens of industrialist-turned-politicians). Moreover, investment banking and venture capital in Pakistan is virtually nonexistent. A prospective entrepreneur has to bear the entire risk of his venture. On top of that, Pakistanis are also notorious for being bad business partners.``

It could not be any worse than the BCCI.

jang #7

`` what happened to Avaz Networks who claimed dev. in Lahore deveoping chip-sets? (Shafi of AST was the founder ?) ``

I remember visiting their website 2 years ago. They were making SONET chipsets which are useless since telcos are moving to IP centric networks.

#10 by amit on March 11, 2005 3:28pm PT


IT is one sector of the economy where Pakistan can truly leverage its relationship with India in a huge way.


We`re talking pakis here...

Jihad before Java
Core Issue before core dump...

I`m sure some Paki here will tell you how Pakiland will share it`s technological expertise in the telecom industry(i.e. using Nokia gear for GSM networks) if only India would settle all outstanding issues(hint hint) with Pakistan....

Indian companies do a lot of business in China...Indian companies operating in China export 10 times more IT out of China than Pakistan exports in a year....

A mathematical model has its flaws. For example, what will be more reliable, a motorcar that is 75 years old, 50 years old, 25 years old or brand new? Based purely on maths, the oldest will be the most reliable, right?

Likewise, for an infotech location to succeed, assuming the easy availability of human capital at a reasonable cost, the primary ``non-math`` factors required would be:- good weather, enough bandwidth, decent power situation, an international airport within 2 hours driving time, some amount of gender freedom, access to good education for children and the infrastructure to spend the money that the people earn.

Also, a work climate which will encourage left-of-centre thought synchronised with profit for those who slog as the core business.

In addition, within the sub-Continent`s context, such a location would need to be a non-State/Central Capital (for reducing governmental interference), it would need to be near a military location (for availability of English speaking people), and it would need to have some amount of engineering industry nearby within 2 hours driving time (for availability of second generation logical thinking people). The existence of colleges/universities in the region would be of great help, too, though the radius for that catchment is now much bigger, esaily a thousand kilometres or more.

Almost everything else can be localised or ignored.

A lot, therefore, would be location specific. Good luck. In my opinion, the existing cities of Karachi, Lahore and Islamabad have their own existing inertia levels which shall NOT permit the evolution of the new-age industry methods.

Amit #10: The biggest gain for Pakistan`s IT industry, from India is in two areas:

- First and foremost, get professors from India to teach in Pakistan`s universities. This is probably the biggest shortage Pakistan faces, in growth of IT. The students are there, the buildings are there, the demand is there for students, the computers are there, but there is no one to teach. No Pakistani Ph.D. goes back from abroad, even though the professors` salaries in elite Pakistani institutions are higher than IITs (I actually compared them).

- Get spillover business from Indian IT companies, i.e. business that Indian companies do not want. Or business that Indian companies are having difficulty in competing in human resources for in India (i.e. areas where Indian programmers have become too expensive).

All of this should be done and supported by Pakistan, with or without a pipeline or anything else. It is just good business sense. However, other than the above two, I don`t really see where India would be interested in partnering with Pakistan, from a business point of view, in this area.

The main area where India needs Pakistan is energy. And it needs it big time. I read an interesting article on it, recently. If it is correct, then India cannot progress, as a whole, without access rights through Pakistan. India will not be able to grow unless it has natural gas and/or oil in very large amounts. However, it cannot get what it needs, for various reasons, from the MidEast oil fields or the gas fields in the East. It has only one path. And that is from Iran and Central Asia - both of which go through Pakistan.

To get a comparitive idea, India uses the same amount of gas as Pakistan, today, i.e. the average Pakistani has access to and uses seven times the natural gas as the average India. So India will thus need many times what it has now, in the coming days. This, alone is enough for India to want peace with Pakistan. And this business reason is perhaps a big driving force in India`s current peace overtures........