Pakistan is rapidly emerging as a key digital hub in the region, with 30,000 IT companies and over 75,000 graduates entering the IT field each year. Globally, it is recognized as the second most financially attractive destination for offshore IT and ITenabled services, and it ranks second in software and tech services, underscoring its pivotal role in the industry. The country is also the fourth fastest-growing in freelancing, supported by the fourth largest workforce worldwide.
This dynamic growth has cemented the IT sector as one of Pakistan’s top five export industries. Enhanced by a robust infrastructure that includes over 40 Software Technology Parks and Special Technology Zones in all provinces. The growth in the IT sector is clearly evident. According to the Economic Survey of Pakistan 2024-2025, the IT and IT-enabled Services (ITeS) sector achieved a trade surplus of $1,996 million, the highest among all service sectors, representing 87.4% of total Information and communications technology (ICT) exports during July-March FY2024. ICT export receipts surged by $339 million (17.4%) to $2,283 million during FY2024. Pakistani freelancers contributed $350.2 million in foreign exchange through remittances during the same period.
The Pakistan Software Export Board (PSEB) launched the first women’s software technology park at the Women’s University of Bagh, AJK, in February 2024. By March 2024, 8 National Incubation Centers (NICs) throughout Pakistan had incubated over 1,480 startups, with more than 710 graduating successfully. These startups generated over 128,000 jobs, attracted investments exceeding Rs 23 billion, and reported combined revenues of over Rs 16 billion. Over 2,800 women entrepreneurs have been empowered through the program. Additionally, the telecom sector showed resilience, generating revenues of Rs 735 billion during July-March FY2024. Pakistan is also rapidly becoming a leading destination for IT investments.
According to Kearney’s 2023 Global Services Location Index, Pakistan is the world’s most financially attractive destination for IT and ITeS outsourcing. The International Labor Organization’s 2021 Flagship Report ranks Pakistan as the second largest supplier of digital labor services. Our eastern neighbor India with more than 1.25 lakh firms, has become the third largest startup ecosystem globally. Pakistan’s effectiveness in growing its IT industry is also apparent. Government of Pakistan is actively supporting the IT sector through a range of sustainable development initiatives and accelerated digitization projects.
These efforts include the establishment of software technology parks, provision of subsidized bandwidth, and support for international marketing and certifications. Additionally, government is enhancing the industry’s capacity through research and innovation programs, as well as offering internships and training opportunities to nurture talent and foster growth in the sector. Pakistan’s tech landscape is set for a major transformation with the establishment of the largest IT Park in the federal capital, marking a significant milestone in technological innovation.
Concurrently, an agreement to develop Pakistan Digital City in Haripur, Khyber Pakhtunkhwa, as a special technology zone aims to generate $25-50 million in annual exports. The Special Investment Facilitation Council (SIFC) is at the forefront of these developments, driving initiatives to create a conducive business environment and enhance investor confidence in Pakistan’s IT sector. The SIFC plans to establish over 10,000 E-Rozgaar centers to provide essential workspaces for freelancers and has secured crucial economic agreements with U.S. IT companies while forging strategic alliances with Saudi Arabia, UAE, and Kuwait.
Furthermore, the launch of the PayPak Service facilitates seamless foreign payments for freelancers, and a national policy for high-speed internet fiber is being implemented to ensure widespread connectivity, supporting education, employment, and communication. The government is also preparing to introduce 5G services next year, with policy guidelines and spectrum identification already in progress. In a bid to nurture innovation and support the startup ecosystem, the SIFC has introduced the Pakistan StartUp Fund, aimed at transforming creative ideas into successful ventures. The SIFC is also spearheading the development of a semiconductor industry, with initiatives including the introduction of foreign currency retention accounts, the establishment of training programs, and the creation of co-working spaces.
Additionally, a strategic partnership between PayPal and Payoneer has been established to enhance financial capabilities for freelancers. 800 delegates and 74 firms from Pakistan’s IT sector attended LEAP 2024 in Riyadh. Delegates of major global IT and ITeS importing organizations from a variety of verticals paid a visit to the nation’s pavilion.To further promote the IT sector, Pakistan’s top 10 creative enterprises, along with expert delegates, participated in the Tech Destination Pakistan Pavilion at the Collision Conference in Toronto from June 17–20 2024. These comprehensive efforts underscore the government’s dedication to advancing the IT sector and driving economic growth through technological innovation. IT companies have been granted the ability to retain 50% of their funds, leading to a significant increase in IT exports from November 2023 to January 2024.
This retention policy is projected to help IT exports surpass $4 billion in the next year. The Special Investment Facilitation Council (SIFC) and the strong network of National Incubation Centers have restored foreign companies’ confidence in Pakistan’s IT and other sectors. As a result, more businesses are relocating to Pakistan, attracted by its growing capacity, skilled youth, and new opportunities. European companies are increasingly interested in investing in Pakistan’s IT sector, with the Czech software company IceWarp planning to establish a data center in Karachi in partnership with local software firm Hexalyze. The country’s favorable government regulations, cost-effective labor force, strategic geographical location, and vast pool of skilled professionals make it an attractive hub for IT investments.
The expansion of Pakistan’s IT sector presents numerous opportunities for both local and international investors. Maximizing the potential of this industry could significantly enhance Pakistan’s appeal to foreign investors and foster strategic partnerships, thereby contributing to economic growth and helping the nation navigate its financial challenges. With its promising trajectory, Pakistan’s IT sector is poised to become one of the country’s largest export industries.
