Home Finance & Investing Business How digital transformation impacts businesses? | The Express Tribune

How digital transformation impacts businesses? | The Express Tribune

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How digital transformation impacts businesses? | The Express Tribune

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KARACHI:

E-commerce is already growing rapidly in Pakistan, and it is expected to continue to grow in the coming years. This will create new opportunities for businesses to sell their products and services online.

Artificial intelligence (AI) is a rapidly developing technology that has the potential to revolutionise many industries. In Pakistan, AI is expected to be used to improve customer service, automate tasks, and streamline business processes.

Cloud computing is a growing trend in the country, as it offers businesses a number of advantages, such as scalability, flexibility, and cost savings. The digital economy is growing rapidly, and it is expected to contribute significantly to the country’s economic growth in the coming years. Pakistan is a developing country with a population of 240 million, 65% of whom are between 15 and 40 years old. It has a growing internet penetration rate of 23% year-on-year, and a vibrant mobile market with more than 170 million subscribers.

The government has launched its Digital Pakistan Vision to transform the country into a knowledge-based economy and leverage the potential of digital technologies for socio-economic development.

The vision aims to create a harmonised regulatory environment, enhance digital skills and awareness, foster a culture of research and innovation, and implement a smart government ecosystem for efficient and transparent service delivery.

Digital transformation has already started to impact various sectors of the economy, such as transport and logistics, finance, education, healthcare, agriculture, and manufacturing. According to a report of PwC, digitalisation can help Pakistan increase its GDP per capita by 3-5% over the next three years.

Some of the key technologies that hold transformation potential for Pakistani businesses include mobile internet, cloud computing, big data, AI, fintech, internet of things and remote sensing, advanced robotics, and additive manufacturing. These technologies can enable businesses to improve their productivity, quality, agility, customer experience, and market reach.

Daraz is a leading e-commerce platform in Pakistan. It has helped thousands of businesses to reach new customers and expand into new markets. In 2022, Daraz generated over $1 billion in sales and employed over 10,000 people.

Similarly, foodpanda is a food delivery platform that has revolutionised the way people eat in Pakistan. It has helped restaurants to reach more customers and increase their sales. In 2022, foodpanda delivered over 100 million meals in the country and employed over 10,000 riders.

According to a report of the Pakistan Software Houses Association (P@SHA), the IT export revenue of Pakistani businesses reached $3.5 billion in 2022, up from $2.5 billion in 2020.

Businesses that have invested in digital transformation have seen a higher rate of growth in their IT exports than those that have not. Businesses that have implemented digital technologies such as cloud computing, big data, and AI have seen an average increase of 30% in their IT exports in the past year, compared to 20% for businesses that have not implemented these technologies.

The global IT services market is expected to grow from $1.3 trillion in 2022 to $2.1 trillion by 2025.

Digital transformation also poses some challenges and risks for Pakistani businesses. These include cybersecurity threats, data privacy issues, regulatory uncertainty, digital divide, skills gap, resistance to change, and the lack of infrastructure.

To overcome these challenges and reap the benefits of digital transformation, the businesses need to adopt a strategic approach that involves assessing their current capabilities and readiness, identifying their goals and opportunities, selecting the appropriate technologies and partners, implementing the solutions effectively and securely, and monitoring and evaluating the outcomes.

Digital transformation is not a one-time event or a single project. It is an ongoing journey that requires continuous learning and adaptation. Pakistani businesses that embrace digital transformation can gain a competitive edge in the global market and contribute to the economic growth and social welfare of the country.

To sustain this momentum and leverage the full potential of digital transformation and IT export for economic development, there are several challenges and opportunities that need to be addressed.

One of the key issues is the human resource gap in the IT sector, which requires investment in education, training, and skill development of the existing and future workforce. Another issue is the availability and affordability of IT infrastructure and services, such as broadband internet, mobile connectivity, cloud computing, data centres, etc, which are essential for enabling digital access and inclusion across urban and rural areas.

Moreover, there is a need for a conducive regulatory environment that supports innovation, protects intellectual property rights, ensures data security and privacy, facilitates online payments and transactions, and promotes cross-border trade and collaboration.

Digital transformation and IT export are vital for economic growth and competitiveness in the 21st century. By analysing the previous data, we can see that Pakistan has made significant progress in this sector in recent years.

By predicting future trends, we can anticipate that there will be more opportunities and challenges for Pakistani businesses in this sector in the coming years.

By examining the social, political, geographic and economic values of this sector, we can appreciate that it has had a positive impact on various aspects of Pakistan’s society and economy. Therefore, it is imperative for all stakeholders to work together to create a digital Pakistan that is inclusive, innovative, and prosperous.

The writer is a member of PEC and has done Masters in engineering

Published in The Express Tribune, November 6th, 2023.

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