What is the impact of digital transformation on businesses? | The Express Tribune
KARACHI:
E-commerce is already growing rapidly in Pakistan and 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 revolutionize 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 many benefits, such as scalability, flexibility, and cost savings. The digital economy is growing rapidly and 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. The country has a growing Internet penetration rate of 23% year-on-year and a dynamic mobile market with more than 170 million subscribers.
The government launched its Digital Pakistan Vision to transform the country into a knowledge-based economy and harness the potential of digital technologies for socio-economic development.
The vision aims to create a harmonized regulatory environment, improve 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 transportation and logistics, finance, education, healthcare, agriculture and manufacturing. According to a PwC report, digitalization can help Pakistan increase its GDP per capita by 3-5% over the next three years.
Some of the key technologies that present transformational potential for Pakistani businesses include mobile internet, cloud computing, big data, AI, fintech, Internet of Things and remote sensing, advanced robotics and manufacturing additive. These technologies can enable businesses to improve productivity, quality, agility, customer experience and market reach.
Daraz is one of the leading e-commerce platforms in Pakistan. He has helped thousands of businesses reach new customers and expand into new markets. As of 2022, Daraz generated over $1 billion in sales and employed over 10,000 people.
Similarly, foodpanda is a food delivery platform that has revolutionized the way Pakistanis eat. This helped restaurants reach more customers and increase sales. In 2022, foodpanda delivered more than 100 million meals in the country and employed more than 10,000 passengers.
IT export revenue of Pakistani companies reached $3.5 billion in 2022, up from $2.5 billion in 2020, according to a report by the Pakistan Software Houses Association (P@SHA).
Companies that invested in digital transformation saw a higher growth rate in their IT exports than those that did not. Companies that have implemented digital technologies such as cloud computing, big data and AI have seen their IT exports increase by an average of 30% over the past year, compared to 20% for companies that have not. 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 certain challenges and risks for Pakistani businesses. These include cybersecurity threats, data privacy concerns, regulatory uncertainty, digital divide, skills gap, resistance to change and lack of infrastructure.
To overcome these challenges and reap the benefits of digital transformation, businesses must adopt a strategic approach that involves assessing their current capabilities and readiness, identifying their objectives and opportunities, selecting appropriate technologies and partners , implement solutions efficiently and securely, and monitor and evaluate the results.
Digital transformation is not a one-off event or a single project. It is an ongoing journey that requires continuous learning and adaptation. Pakistani companies that embrace digital transformation can gain a competitive advantage in the global market and contribute to the country’s economic growth and social well-being.
To maintain this momentum and exploit the full potential of digital transformation and the export of information technologies for economic development, several challenges and opportunities must be addressed.
One of the key issues is the lack of human resources in the IT sector, which requires investment in education, training and skills development of the current and future workforce. Another issue is the availability and affordability of IT infrastructure and services, such as high-speed internet, mobile connectivity, cloud computing, data centers, etc., which are essential to enable access and digital inclusion in urban and rural areas.
Furthermore, it is necessary to establish a regulatory environment conducive to innovation, protection of intellectual property rights, data security and privacy, facilitation of online payments and transactions and promoting cross-border trade and collaboration.
Digital transformation and the export of information technology are essential for economic growth and competitiveness in the 21st century. Analyzing the previous data, it can be seen 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 years to come.
By examining the social, political, geographical and economic values of this sector, we can understand that it has had a positive impact on various aspects of Pakistani society and economy. It is therefore imperative that all stakeholders work together to create an inclusive, innovative and prosperous digital Pakistan.
The writer is a member of PEC and has done a master’s degree in engineering
Published in The Express Tribune, November 6th2023.
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