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Information Technology Jobs Moving From India to Pakistan?

Outlook India recently ran a story headlined "Noida to Islamabad". It suggests at least anecdotal evidence of information technology jobs beginning to move from India to Pakistan. The number of jobs is only 125 but could it be the tip of a larger iceberg? Are western companies finding Pakistan becoming more competitive with India in terms of cost and skills on offer? Let's try and answer these questions.

Noida to Islamabad:

Outlook India report said 125 employees at a US-based information technology service provider were laid off in Noida in New Delhi, India, and the very next day an equal number of workers started working for the company in Islamabad, Pakistan. Here's an excerpt of Outlook India story:

"On the night of November 1, stretching into early next morning, close to half the workforce at the Noida office of a US-based IT service provider was informed that their services were no longer needed. A former employee says salaries for the staff at the Noida office were declared delayed by a day on October 31. The official explanation was that the servers were not working. “They weren’t clear about how many people were going to be laid off,” he says. The next night, they “axed 125 people in half-an-hour.” They all got a severance package—a cheque for October and another two months of salary—and a termination letter. Rumors of layoffs had started doing the rounds four to five months ago. The talk was that the company was opening offices in a neighboring country. Curiously, the day the workforce in Noida was sacked, almost the same number of employees for the same low-level IT-enabled jobs logged into their systems, 676 kilometers away, in Islamabad, Pakistan. Job cuts have plagued the Indian IT sector for about two years now and have begun to get pretty serious from the start of this year. “Bloodbath in Bangalore” has been the recurring headline. But the trend of these jobs going to techies in Pakistan is more recent. Away from all the noise of ceasefire violations and surgical strikes, where Pakistan could really hurt India is in taking away low-end IT jobs. The neighbor has a budding IT industry, growing in its own space, looking to emulate the Indian IT success story where right now data operators and BPO callers come much cheaper."

The story did not identify the company by name.

Pakistan: The Next Software Hub?

There are tens of thousands of Pakistani IT engineers working in the West, particularly in Silicon Valley, the high-tech capital of the world. The popular entertainment industry recognizes this fact by featuring a Pakistani-American software engineer in lead role played by a real-life Pakistani-American Kumail Nanjiani in HBO's "Silicon Valley" serial.  Articles like the New York Times Op Ed piece in 2015 titled "Pakistan, the Next Software Hub?" have helped raise the profile of Pakistan's information technology industry in the West.

Afiniti and Careem: Tech Unicorns Made in Pakistan:

Afiniti and Careem are two technology unicorns engineered in Pakistan by Pakistanis. AI (artificial intelligence) startup Afiniti software has largely been engineered in Lahore while taxi hailing service Careem's technology has mostly been developed in Karachi.

Careem is a taxi hailing app that is giving its American competitor Uber a run for its money in a region stretching from Pakistan to the Middle East and North Africa. The company cofounded by Mudassir Sheika, a Pakistani national, is headquartered in Dubai in the United Arab Emirates.

Careem's software has been developed by its technology partner VentureDive based in Karachi, Pakistan.  VentureDive was started by serial Pakistani entrepreneur Atif Azim who sold his earlier startup Perfigo to network equipment giant Cisco for $74 million in 2004, according to a report in Tech in Asia.

Washington D.C. based AI technology firm Afiniti, founded by serial Pakistani-American entrepreneur Zia Chishti, has filed for initial public offering (IPO) at $1.6 billion valuation, according to VentureBeat. The company has grown out of the technology used in the Pakistan-based call center business of The Resource Group (TRG) also founded by Zia Chishti.

Bulk of the Afiniti development team is located in Thokar Niaz Baig, Lahore. In addition, the company has development team members in Islamabad and Karachi.

Numbers,  Skills and Cost: 

Pakistani universities are producing over 10,000 IT engineers annually. Many of them have demonstrated their quality and skills by freelancing for American and European companies. Pakistani freelancers consistently rank among the top three year after year.

In terms of cost, Pakistani engineers cost significantly less than engineers in India and elsewhere. The average salary of a software engineer ($110,000) in Silicon Valley is about 20X more than the average salaries in India ($6,875) and Pakistan ($4,770), according to Glassdoor.

Source: Glassdoor

Summary:

Recent move of 125 IT jobs from Noida to Islamabad in an indication that  Pakistan is becoming an attractive destination for software and information technology companies looking for highly skilled talent at significant discounts. It is an emerging center of technology with at least two unicorns, Afiniti and Careem, engineered by Pakistanis in Pakistan.  With growing numbers of young homegrown Pakistani technologists, a highly skilled diaspora and an evolving startup ecosystem with incubators, accelerators and investors, the country is beginning to demonstrate its vast potential as a vibrant technology hub of the future. Provincial governments, particularly those in Punjab and KP, are showing leadership in encouraging this trend. The main ingredients are all coming together to make things happen in Pakistan.

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Comment by Riaz Haq on November 26, 2017 at 8:34am

The computer services exports of Pakistan have seen an increase of 32.11 percent during the first two months of the current fiscal year 2017-18, as compared to the last year, according to the report of Pakistan Bureau of Statistics (PBS). Pakistan has earned $111.38 million against the services worth $84.31 million during the period.

During the past 4 years, IT Industry has contributed 98% to Pakistan’s economy by foreign exchange earnings, as stated by Minister for IT Anusha Rehman. IT industry in Pakistan is flourishing as Pakistan has earned $54.37m by exporting software consultancy services, showing growth of 69.22 percent as compared to exports of $32.126m last year.

According to the data revealed by PBS, hardware consultancy services exports have also seen an increase of 144.41 percent to $0.72 million as compared to the last year’s export of $0.3 million of the same services. Similarly, the maintenance and repair services for computers also seen a slight increase of $0.39 million as compared to $0.23 million of last year, showing growth of 68.97 million.

In general, the exports of the country have earlier seen a decline by 12% in the past fiscal year 2015-16, while the current fiscal year seems to get a boost by the export services of IT and Telecom sector. However, the trade of computer software services observed a negative growth of 1.01 percent during first two months, declining to $40.766 million this year from $41.181 million during the last year.

However, the export of telecommunication services has not been a much success for Pakistan. The export of telecom services from the country decreased by 0.93 percent by going down from the trade of $63.43 million last year to $62.84 million during the current fiscal year.

It must be noted that general services exports from Pakistan have seen an immense increase by 4.94 percent during the period under review while comparing to the same period of last year. With this considerable increase of $816.27 million of this year, compared to the exports of 777.84 million in last year, Pakistan is witnessing the great potential of its IT and Telecom sector in this era of digitalization.

https://www.techjuice.pk/pakistan-earned-111-million-computer-servi...

Comment by Riaz Haq on November 26, 2017 at 8:49am

#Pakistan #IT services #exports register 14.5% growth in fiscal Q1 to reach $252 million. On track for exporting over one billion US$ in FY2017-18 https://pakobserver.net/icts-services-exports-register-14-5pc-growt... … via @PakObserver

The exports of Information and Communication Technology (ICT) services and related sectors have registered a double digit growth of 14.5 per cent, surging to US $ 252 million during first quarter of this year.
During same period of July to September 2016-17, the exports recorded in this domain were US $ 220.2 million.
The statistics issued by State Bank of Pakistan have showed that local companies and startups related to Information Technology (IT) and similar sectors have continued to expand their market share in foreign market as value of exports recorded double digit growth.
Pakistani companies usually export ICT services to United States, Middle East and North African countries. Major heads of exports included software and hardware consultancy, telecommunication services, call center services and export of software.
In last financial year 2016-17, IT exports and related services touched nearly US $ 1 billion reaching an all-time high. It is expected that exports will cross the US $ 1 billion mark this year.
According to Pakistan Software Exports Board (PSEB), Pakistan’s has been showing a healthy growth rate of IT & ITES exports in South Asia during the last three years. It grew by 71 per cent from June 2013 to June 2016.
In last financial year as well, Pakistan’s IT and related services exports have grown at a faster pace than India and Sri Lanka. Pakistan’s growth rate during 2016-17 was 16 per cent whereas Sri Lanka was at 5 per cent.
The statistics of IT services exports are usually labelled as remittances under IT sector but the industry strongly believes that overall exports are three times higher than the reported numbers which includes exports of services by freelancers and various IT services in different sectors such as financial and textile sectors.
Accordingly, the exports of IT and related services stand US $ 756 million by end of first quarter of 2017-18, which will likely to touch a mark of US $ 3 billion as per estimates.
In this regard, the central bank is working to bring IT companies and service providers on-board. It has designed a reporting structure of inflows that will help in increasing inflows of IT sector in future if companies follow this pattern.—APP

Comment by Riaz Haq on December 28, 2017 at 7:43am

International conference on emerging technologies: Chairman HEC for translating opportunities into reality

https://www.pakistantoday.com.pk/2017/12/28/international-conferenc...

Higher Education Commission (HEC) Chairman Dr Mukhtar Ahmed has stressed on the need for translating the opportunities created by new technologies into reality while ensuring a positive use of advanced gadgets.

He said that the HEC is committed to facilitating universities and encouraging research activities. “We need to conduct researches that cast positive impacts on society and mitigates the miseries of humanity,” he underlined.

He expressed these views while speaking as a chief guest at the two-day 13th International Conference on Emerging Technologies (ICET) jointly organized by the Capital University of Science and Technology (CUST), in collaboration with the HEC and Institute of Electrical and Electronics Engineers (IEEE) Islamabad. 

CUST Vice-Chancellor Dr Mansoor Ahmed, Professor Aamer Iqbal Bhatti, ICET General Chair and a large number of faculty members and students were also present on the occasion.

The HEC Chairman pointed out that water and food security will become vital issues in the near future. He emphasised that the solution to all social ills including terrorism, poverty and unemployment lies in the promotion of education. 

“It is the era of a knowledge economy and no nation can make progress without promoting education,” he stated. He said that the universities are responsible for imparting education, creating knowledge and integrating it into society. He urged the faculty to pay special attention to the training of students, as training is imperative for a peaceful society.

Shedding light on the achievements of the HEC during the last 15 years, the chairman said that HEC set off on its journey when Pakistan had only 59 universities, adding that the number of universities in the country has now reached 188. He maintained that the HEC has been putting strenuous efforts to promote ICT in the country.

“Pakistan has one of the best ICT setups of South Asia”, he informed.

He also announced that the HEC plans to establish centres of excellence in data and artificial intelligence. 

Sharing the background of the conference, Professor Aamer Iqbal Bhatti said that the first international conference on emerging technologies was held in 2005. He said CUST lays great emphasis on applied research and the 13th ICET is a testimony to that fact. He appreciated the role of the HEC and IEEE Islamabad in collaborating to organise the conference.

Comment by Riaz Haq on December 28, 2017 at 10:05am

#India's #IT layoffs in 2017 top 56,000, led by Infosys and Cognizant — Quartz. #unemployment #technology

https://qz.com/1152683/indian-it-layoffs-in-2017-top-56000-led-by-t...

For Indian techies, 2017 was the stuff of nightmares.

Since Trump took office, the fate of the H-1B, a six-year temporary work visa that Indian IT companies heavily depend on, has been hanging fire.

In March 2017, the US government stalled the premium processing of this visa category.

The criteria for computer programmers to apply for the H-1B visa became tougher. In April, Trump signed the “Buy American, Hire American” executive order, promising to bring jobs back to the country, putting migrant workers in jeopardy. In November, the judicial committee of the US House of Representatives gave its nod to the Protect and Grow American Jobs Act (titled HR 170) which classifies any company that has more 15% of its workforce working on-site as “visa-dependent.” With this, the pressure is mounting on Indian outsourcing giants which sometimes have over 50% of their manpower working on-site.

Even the current workers have cause for concern—to clamp down on visa fraud, the United States Customs and Immigration Services (USCIS) plans to double the number of visits to workplaces. “Indian IT companies, thus far champions of IT-based outsourcing, have been forced to go back to the drawing board in order to reposition themselves higher up in the value chain,” Anshul Prakash, a partner at Mumbai-based legal services firm Khaitan & Co, told Quartz.

---------------
One of the top employment generators until a few years ago, India’s $160 billion IT industry laid off more than 56,000 employees this year. Some analysts believe this spree was worse than the one during the 2008 financial crisis. Meanwhile, hiring plummeted, with entry-level openings having more than halved in 2017, according to experts.

Tata Consultancy Services (TCS) and Infosys, two of India’s largest IT companies and once leaders in job creation, reduced their headcounts for the first time ever. Even mid-sized players like Tech Mahindra retrenched several employees. (However, TCS’s staff addition recovered after a fall during April-June 2017 and rose 0.8% in the following quarter).

“Digitisation and automation brought about disruption in traditional roles, which means that most of the IT firms found themselves reassessing the capability of the talent pool to stay market relevant,” Arun Paul, vice-president of human resources at Incedo, an IT service management company, told Quartz.

When hell broke loose
Compared to the normal rate of forced attrition (i.e. asking non-performers to leave) of around 1% in earlier years, 2017 saw Indian IT companies letting go of between 2% and 6% of their employees, said Alka Dhingra, general manager of IT staffing at TeamLease Services.

Infosys cut 9,000 jobs in January. “Instead of 10 people, what if we have three people to work on (a project). If we don’t have the software, then some others will take the advantage (away from us),” Vishal Sikka, the former CEO of the Bengaluru-based company, said in February.

Meanwhile, around 6,000 Indian employees at Cognizant reportedly lost their jobs to automation. Mumbai-based Tech Mahindra implemented a cost optimisation plan of increasing automation and reducing manpower. It turned ugly in July when the firm made headlines over a controversial audio clip that featured an HR personnel purportedly coercing an employee into quitting by 10am the next day, or risk being fired.

Moreover, it wasn’t just about those at the bottom of the IT pyramid. Pink slips were doled out to even senior employees with outdated skills.

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