Page 79 - CMA Journal (Nov-Dec 2024)

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SWOT Analysis of IT Software Industry in Pakistan

STRENGTHS WEAKNESSES

 Pakistan’s IT industry benefits from a large pool of skilled  Intellectual property and cybersecurity risks in a
and affordable software developers. fast-evolving digital landscape.
 Growing number of tech startups, particularly in Fintech,  Gaps in digital literacy among parts of the population,
EdTech and mobile banking. which can limit market adoption of tech products.
 High demand for software services in international markets  Talent retention issues, with skilled tech professionals
due to competitive pricing. often migrating for better opportunities abroad.
 Increasing internet penetration and digital infrastructure  Lack of sufficient venture capital and support for
support growth. early-stage tech startups.
 Strong presence of tech incubators and accelerators  Heavy reliance on international markets for funding and
promoting entrepreneurship. technology adoption.
 Government support through policies and initiatives aimed at  Limited infrastructure and resources in certain regions
the digital economy in years ahead. can hinder broader adoption of technology.
 Freelancing sector growth, with Pakistan being one of the  Cumbersome foreign exchange controls, complex
top countries for software outsourcing. licensing, and outdated labor and tax regulations
weaken internal efficiency and hinder IT sector growth.
 Advanced software solutions being developed for key
sectors such as healthcare, finance, and education  Fragmented digital ecosystem, making it harder for
startups to achieve scale quickly.
 Strong academic and research institutions contributing to
the development of IT talent.  Challenges in the accessibility of cutting-edge
technology for smaller startups.
 Highly dynamic startups like Careem, Daraz, and Bykea
having novel business models.  Slow pace of innovation in certain traditional sectors
and industries, restricting the potential of tech
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SWOT
OPPORTUNITIES O T THREATS

 Pakistan's software market is set to reach US$1,045.00  The absence of clear thematic and operational linkages in
million in revenue by 2025 the National IT Policy and its alignment with other sector
policies.
 Enterprise software is expected to lead the market with a  Rise in Intellectual property risks and the potential for
projected revenue of US$480.30 million in 2025. digital piracy threatening business integrity.
 Government support through policies like 0.25% corporate  Brain drain of skilled professionals seeking better
tax and initiatives like Techlift boost industry growth. opportunities abroad, leaving a talent gap.
 Pakistan’s tech-driven economy is attracting global players  Extensive internet censorship, frequent firewall
seeking affordable software solutions. disruptions, inadequate data protection, and government
surveillance undermine global competitiveness and deter
 Developing cybersecurity expertise addresses global security international investment.
needs and positions Pakistan as an emerging tech player.
 Job displacement from automation may lead to social
 Hosting global tech events like APICTA and participating in unrest and economic inequality.
GITEX and LEAP enhances Pakistan's global presence.  Political instability hinders long-term industry
 International collaborations with countries like Saudi development.
Arabia, UAE, Bahrain, Brazil, and Jordan boost IT  Increasing competition from regional tech hubs, such as
outsourcing growth. India, which offer similar or more advanced services.
 Public-private partnerships involving P@SHA, MoITT, PSEB,  The challenge of competing in international markets while
and private sector firms will drive industry growth. maintaining high-quality standards.
 Policy barriers for Payment Service Providers (PSPs) and
 The software market in Pakistan, valued at $3.2 billion, Operators (PSOs) may hinder e-commerce and digital
continues to grow despite macroeconomic challenges.
transactions.
 As per P@SHA 2023 report, Pakistan's ICT sector is expanding  Global economic downturns and internet service
with over 19,000 registered companies, driving innovation interruptions reduce demand for Pakistani IT products and
and collaboration. services.

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