Tech sector at a crossroads: talent thrives, but policy lags

By Jawad Rizvi
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May 02, 2025
This photograph shows Pakistani employees of an online marketplace company in Karachi. — AFP

LAHORE: Pakistan’s tech ecosystem stands at a pivotal crossroads. The country boasts abundant talent, and global markets are taking notice. With the right policies and support systems, Pakistan’s tech sector has the potential to transform not only the national economy but also the country’s global standing, shares Usman Asif, founder and CEO of software company Devsinc.

“The next tech giant does not have to emerge from Bangalore,” Usman said with conviction. “It could just as easily start in Lahore, or even Rahim Yar Khan. But for that to happen, the system needs to grow and improve alongside the talent.”

Usman’s journey from a small-town dreamer to a global tech entrepreneur encapsulates both the immense potential and the persistent challenges facing Pakistan’s tech industry. “I borrowed money to buy my first laptop,” Usman recalled, reflecting on his humble beginnings. Raised by a single mother in a village near Rahim Yar Khan, he now leads a company operating in six countries, developing platforms that address real-world problems. His education at FAST-NUCES, LUMS Pakistan, and later Stanford University in the US enabled him to delve deeply into emerging and futuristic technologies.

Usman painted a picture of remarkable, untapped potential across the country. “In places like Rahim Yar Khan, young people are teaching themselves to code and launching tech startups,” he explained. Pakistan is home to one of the world’s largest and most successful freelancer communities, consistently earning top ratings on platforms like Upwork and Fiverr.

Despite this wealth of talent and the potential to produce global tech giants comparable to India’s Infosys or Tata, Pakistan is falling behind. Usman highlighted a key obstacle: the need to stabilise the policy framework. “The dollar retention account policy is perhaps our biggest hurdle,” he said. Designed to help exporters retain a portion of their earnings in US dollars for essential services such as cloud computing and international marketing, the policy’s implementation has been far less effective than intended. “The system is bogged down by red tape, inconsistent enforcement and mandatory currency conversions that ultimately hinder success rather than enable growth.”

The core philosophy of building start-ups is scalability -- for outreach, employment and earning foreign exchange -- but these financial restrictions have created a paradox where Pakistan excels at producing freelancers yet struggles to build scalable companies. “Freelancing has opened economic doors for thousands,” Usman acknowledged, “but it does little to create long-term, scalable tech companies that drive national growth and generate employment at scale.”

Comparing India’s IT sector success with Pakistan’s, Usman noted: “Our neighbour established national institutes of technology offering IT qualifications as early as the 1950s. They have since overtaken many economies and now compete fiercely on the global stage. India’s IT boom wasn’t just about talent -- it was driven by policy, infrastructure and government support.” In contrast, Pakistan has the talent but lacks a clear roadmap. “There’s little understanding of this sector’s immense potential and hardly any support for those willing to take on global challenges. Due to the limited scope or delays, much of our talent is shifting priorities.”

Employee retention has also become a major challenge. As more Pakistani tech professionals opt for remote work with global companies that pay in US dollars, local start-ups struggle to compete on salary. “We invest in training young developers, only to see them leave after a few months for better-paying offers abroad,” Usman lamented. “It is nearly impossible to scale teams, complete large contracts, or meet global standards. Our policies are producing gig workers,” he added.

Pakistan must overhaul its Digital Readiness Assessment (DRA) system, streamline visa processes, and offer smart salary incentives to support local tech talent -- or risk missing out entirely. “A dedicated tech diplomacy wing within the Ministry of Foreign Affairs could be transformative,” he suggested, “helping to streamline visa processes and fast-track cross-border collaborations”.

Promising opportunities continue to arise through global geopolitical shifts. US-China trade tensions are reshaping supply chains, prompting Western tech firms to explore alternative markets, including Pakistan. “Even Elon Musk recently commented on the potential of South Asian talent in shaping the future of AI and automation,” Usman noted with cautious optimism.

Saudi Arabia also represents a particularly promising market under its ambitious Vision 2030 initiative, which is driving significant investments in digital transformation, AI, fintech and edtech. However, bureaucratic hurdles continue to undermine potential gains. “Visa issues are devastating our competitiveness,” Usman revealed. “We lost a million-dollar deal simply because we couldn’t secure a visa in time for the final pitch. This kind of logistical failure translates directly into policy failure.”