Technology in Pakistan: A Slow March

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Technology in Pakistan: A Slow March

Pakistan’s startups need government help to foster innovation and protect intellectual property.

Technology in Pakistan: A Slow March

Prisoners attend a computer course at Swaqa Correction and Rehabilitation Center, near the city of Karak, Pakistan (November 30, 2015).

Credit: REUTERS/Muhammad Hamed

Technology, including the IT industry, in Pakistan has enormous potential for growth. But teething problems, especially a lack of funds and encouragement for product development, have deterred start-ups from moving forward with disruptive innovations or technologies. While Pakistan’s technology sector struggles to get off the ground, Indian IT exports have reached more than $100 billion.

However, Pakistan can turn a corner by investing in tech start-ups and disruptive technologies, providing facilities like incubators, office space, and financial leeway. Such measures could not only promote entrepreneurship and innovation-based critical thinking but would also clean the Augean stables of poverty and unemployment. Technology is sine qua non for the 21st century and ignoring it could result in unquantifiable lost economic opportunities.

Pakistan has a very robust youth population and with measures like incubators and financial assistance the country can create a roadmap toward innovation-based technologies and breakthroughs– much like the United States did at the start of 20th century and India did in the early 1990s.

Technological innovation can be classified in different ways: product vs process, disruptive vs sustaining. It is imperative that government should enable institutions and corporations working on all types of innovation based technologies and, importantly, the processes involved.

Another important step to enhance innovation would be to have a legal framework to protect intellectual property (IP) rights. Such framework would not only penalize IP rights infringement (which is currently quite prevalent in corporate circles of Pakistan) but would also help in creating an atmosphere for innovation.

It is important for the government to understand the importance of IP rights. IP protection and the related legal framework could not only enable innovation based thinking, businesses, and products but would also help develop the IP industry in Pakistan. IP, in the form of patents, contributes enormously to national and state economies, but for now, Pakistan’s IP is stuck leap years behind other countries.

The strength of the U.S. IP industry and accompanying legal framework show in the data. According to the Global Intellectual Property Center, IP intensive industries employ 55 million Americans and are worth $5.8 trillion, more than the nominal GDPs of France and Britain. IP accounts for 72 percent of all U.S. exports, which amounts to nearly $1.5 trillion. All that is possible because the U.S. government understands the importance of mechanisms that enable IP rights protection and further technological innovation.

It is noteworthy that the American founding father so recognized the importance of innovation that they ensured IP protection for authors and inventors even centuries ago, ultimately making the United States the world leader in innovation and disruptive technologies – a fact borne out by the overwhelming number of patents, copyrights, and trademarks filed by the United States year after year.

In comparison, it should be disappointing for Pakistan’s government to know that only 10 percent of the 50,000 patents registered in Pakistan since 1947 are local, while the rest are foreign (filed by individuals based in other countries).

Beside the United States, if Pakistan can follow the example of Israel, the results could very well turn out to be eye-catching. Israel, dubbed the “Startup Nation,” has a very robust start-up culture and very strong IP protection mechanisms. With a population of slightly over 8 million, Israel has an estimated 5,200 startups, nearly all in the high tech field. Today, more than 250 global companies have R&D labs in Israel, with 80 of them being Fortune 500 companies. Two-thirds are American tech giants such as Facebook and Apple, but there is an increasing presence by Chinese and Korean players such as Huawei and Samsung and LG. Underlying this success, again, is the government’s understanding and acknowledging the importance of technology.

It is a pity that Pakistan is ranked 131st out of 141 countries in the 2015 International Innovation Index. The low ranking is evidence of the fact that innovation-oriented policies are missing from mainstream education and business.

Importantly, Pakistan can learn a great deal from the Indian IT sector and what India has achieved in last decade or so. Indian culture is far more similar to Pakistan’s than Israel or the U.S., but today, India is among the five largest startup communities in the world, with the number of startups crossing 5,000. It’s no coincidence that Google and Microsoft’s CEOs are Indian-Americans.

It is not surprising that research has been the main catalyst for India’s rise. Quality and meaningful research has created an environment for innovation, thus, increasing India’s overall IT exports and promoting startup culture.

Another significant difference is the quality of education. India’s tech education is based on groundbreaking and innovative advances in the software market while Pakistan is still following the same old 20th century methods, especially at the college level.

Another factor that has stalled innovation in Pakistan is the lack of investment in human development. In India, Flipkart is the most valuable startup, with an estimated worth of over $15 billion. Pakistan does not have any startup worth that much — or even coming close. The ostensible reason: A flawed approach and system that does not promote innovation and entrepreneurship. It is of vital importance that the people of Pakistan and government must recognize that this is the century of the tech entrepreneurs. Embracing this idea intelligently by studying others’ successes and mistakes will only speed up Pakistan’s evolution.

There is a reason why Pakistan is not producing products or companies like Uber, Dropbox, or even Google. All these companies were once small start-ups based on the principle of disruptive innovation. Steve Jobs, founder of Apple and responsible for Apple’s iconic success, once said, “Innovation distinguishes between a leader and a follower.” Without government policies to foster an innovate environment, Pakistani companies will be stuck in the role of followers.

Technology is the core growth driver in the 21st century. The Pakistani government and policymakers can’t ignore its interplay with entrepreneurship and focus solely on “motorways and metrobuses” — without the viable use of technology even they cannot survive.

Pakistan’s IT exports stand at $2.2 billion. To increase these exports, Pakistan must take concrete steps, perhaps by studying the successful models of India and Israel. Investing more in research and development, creating R&D centers for Pakistan’s technical force, would not just enhance their technical capabilities but would provide them much needed hands-on experience and exposure.

Another significant step would be to revamp and reform the educational system to a more modern and research based syllabus. This would certainly create an environment for meaningful research and innovation, thus impacting exports and even the business landscape.

It was quite encouraging to see Google coming to Pakistan and arranging university seminars and talks with young Pakistani university graduates. The government should pull all possible levers to attract more tech companies into Pakistan, and make policies and mechanisms that enable tech giants to set up R&D centers.

The wish list could go on. It is time for the government and the startups in Pakistan to step up to the plate and avail themselves of the enormous opportunities the tech world is offering. The benefits are not just increasing exports, but playing a constructive role in the 21st century tech economy.

Maqsood Ahmed is a technology consultant/enthusiast based in Islamabad.