Towards a digital economy

Pakistan has to embrace digital technology in order to compete with the rest of the world

Towards a digital economy


et’s look first at the basics. How often and in what ways do Pakistanis use digital technology in everyday life? Where does the rest of the world stand in adopting digital technology? How will our future be shaped if we adopt the latest digital tools? Can we compete with rest of the world in this respect?

Over the last couple of years, many developing countries including Pakistan, have seen a surge in the use of digital technology, especially through mobile phones. What exactly is digital technology and in what ways is it shaping our lives and economy?

Digital technology is “the use of advanced information and communication technology to collect, store, analyse and share information in each link of the product value chain, providing important technical support for innovation in various fields.”

With every passing day, digital technology is making the word faster, easier and more innovative. Impact of digital technologies, a United Nations paper, says that technologies can make our world fairer, more peaceful and more just because “digital advances can support and accelerate achievement of each of the 17 Sustainable Development Goals — from ending extreme poverty to reducing maternal and infant mortality, promoting sustainable farming and decent work and achieving universal literacy.”

As businesses rely heavily on digital technologies for fast dissemination of information and products, adaptation of digital technology can make a real difference in e-commerce, especially for countries like Pakistan. The UN paper rightly says, “By enhancing connectivity, financial inclusion, access to trade and public services, technology can be a great equaliser.” This has already been proven in health, agriculture and environment sectors.

But we have been slow in realising the place digitisation has acquired in today’s economy. The digital policy announced in May 2018 takes into account the centrality of digital advancement in our socio-economic sustainable development. “Given the augmented IT demand and growth, it has become imperative to reformulate the Digital Pakistan Policy: one that takes into account its increasingly transformed role across all sectors of socio-economic development; their accelerated digitisation and transformational modernisation into integrated components of a holistic knowledge based economy,” the policy paper says. “With this in mind, the Ministry of Information Technology and Telecommunication has formulated this policy document based on a multi-stakeholder model,” it adds.

Towards a digital economy

We have been slow in realising the place digitisation has acquired in today’s economy. The digital policy announced in May 2018 takes into account the centrality of digital advancement in sustainable socio-economic development.

In the words of MIT Technology Review, “Digital technologies will be key to the net-zero transition. They enable de-carbonisation with their ability to process more data more effectively, identify problems faster, and test solutions virtually.” And that will be possible when, “Energy-intensive systems will increasingly find efficiency gains from digital and Web3 technologies, such as cloud and edge computing, artificial intelligence and machine learning, internet of things sensors and block-chain technology.”

Nodir Ruzmatov, co-founder and CEO of RevoTech, regards digital technology as a game-changer. Writing in Forbes (March 6) in an article titled, Digital technology is a must for inclusive growth, he says, “A game-changer has arrived in the form of digital technology. It is the backbone of the most rapidly growing industry sectors, contributing to the reduction of cost and enhancement of transparency and efficiency in operations. The Covid-19 pandemic further underscored the criticality of digital technology.”

A digital business is defined as a process of applying digital technology “to reinvent business models and transform a company’s products and customer experiences — innovating products that create new value and connecting people with things, insights and experiences.”

Digital businesses help in tracking and streamlining various stages of a business, in maintaining data flow and managing contacts and data about employees. The increased efficiency reduces costs, enabling the business to grow rapidly.

The World Bank report, Digital Pakistan: A Business and Trade Assessment, is a soft reminder for Pakistan to embrace digital technology. “Pakistan should seize digital trade opportunities as they are becoming increasingly important for the world economy. Between 2004 and 2017, the share of world ICT services exports in global GDP more than doubled from 0.30 percent to around 0.66 percent.”

The document says, “As global value-added of both ICT goods and services is growing, the sector is an important contributor to higher value-addition overall. The current share of ICT value-added in the OECD stands at 6 percent. That share is likely to be lower for poorer countries such as Pakistan. That does not mean, however, that the sector is unimportant for Pakistan’s development strategy.”

Digitisation of services in Pakistan, a State Bank of Pakistan document, is a ray of hope. It says Pakistan is among the economies where digitisation “is triggering changes in some components of the services sector. The shift is most prominent in domains like e-commerce, fin-tech, and e-government, where new ventures and approaches to deliver services are picking up. Specifically, the market size of e-commerce has grown significantly over the last few years, transforming the way consumers interact with – and especially pay – businesses.”

The national economy has to catch up with the latest digital technology changes in order to compete with the rest of the world.

Towards a digital economy