I am going to be withdrawing an exports marketing program proposal from Federal Government that was designed to help SMEs in IT sector so they can travel internationally to exhibitions, conferences and networking events and try to win business. I am quite depressed while apologizing to these small firms. They may have to stick to online sales and may have to limit themselves to small ticket sales items, as they have always been.
The people at the top are filled with Academicians, Bankers, Economists with fancy degrees who have never done a single Rs of exports, nor created a company from scratch in Pakistan to understand what a small company of 5-10 people have to go through in Pakistan to create a viable exports business. What it’s like to fight with the world for their share with a Pakistani Passport, while fighting with our own crooked system. Unfortunately, these SMEs are at their own.
90% of our IT/ITeS industry comprises of SMEs that are less than 25 people in size. International presence for them is a luxury and with all the costs at hand, they can’t travel often. Result is under-developed Founders who are restricted to small ticket sales of 20,000 dollars and less from online channels. Hence not only their sales are underwhelming, the workforce they employ also does not grow due to lack of vision/exposure of their leadership.
Billions have been handed out as funding for R&D and other academic centric/supply side activities that yield no result to date. While our decision makers have all sorts of perverted questions in mind when it comes to IT SMEs and businesses i.e.:
- What if they go to Disney Land instead of IT conference
- What if they fail to win business in their very first international participation
- Why should we bother with such companies that can’t even afford to do their own international travel and marketing
The problem is two fold:
- Socialist mindset: Business is bad, businessmen are crooks. We want them to do exports and pay taxes and create jobs for Pakistan, but we don’t want them to make any money or get any benefit form the system.
- Industrial mindset: Only decades old traditional models to incentivize business are acceptable. These are from the time of Gen. Ayub Industrial era reforms. i.e. How to reduce cost of doing business (input tax, subsidies etc), How to give incentives (cash rewards, trade-shows etc), How to create HR supply (skill development trainings, short courses etc). Most people sitting at top are like “lakeer kay faqeer” for whom how it’s been done for past few decades is the only kosher way of doing it. Any innovation, any new model will be seen negatively and casted away. This puts IT companies at a disadvantage since none of the industrial era models work effectively for services and IT/ITeS sector. And none of these folks at the top understand IT and services sector.
I am pretty sure if I keep pushing for it, i’ll be talking to NAB and Judges instead of these people, and they have no better understanding either. So while I keep fighting for what needs to happen to bring Pakistan’s IT export to $10B, it’s a small blow to future of our IT exports 🙁
While our neighbors including India, Bangladesh and other countries like Hong Kong and Romania find excuses to incentivize their firms and reduce their costs while incentivizing their international presence to give them unfair advantage, we may still be asking each other five years from now, Why have we lagged behind in IT exports?
The writer is Chairman of P@SHA & Chairman of Prime Minister’s Task Force on IT & Telecom.