Unprecedented Boom in Pakistan's Technology Sector

[Riaz Haq]

Pakistan's technology sector is in the midst of an unprecedented boom. It is being fueled by the country's growing human capital and rising investments in technology startups. A recent tweet by Swedish fund manager Mattias Martinsson captured it well when he wrote, "Have followed Pakistan for 15 years. Can't recall any time time when VC activity was anywhere near we've seen in the last few months. Impact of reforms kicking in?".  New laws have made it easier to create startups and offered greater protection to investors.  Digital infrastructure has expanded with over 100 million smartphones and an equal number of broadband subscriptions. 

Source: Twitter

Pakistan is churning out more than 30,000 information technology graduates every year. Over three-quarters of Pakistanis in the top three metros of Karachi, Lahore and Islamabad are regularly using the internet. Technology startups are on track to attract more than $230 million in venture capital investments this year, almost 5 times greater than vc investments last year. Technology exports are increasing by double digits every year, reaching $2.1 billion in the fiscal year that ended in June 2021.  Pakistani freelancers' revenue grew 47% last year, the highest growth in Asia and the fourth highest in the world. 

Over Half of All Pakistanis Are Connected to the Internet. Source: Google-Kantar

Pakistan has seen a phenomenal growth of 3500% in broadband subscriptions over the last 8 years . Pakistanis now own more than 103 million smartphones with mobile broadband subscriptions. In a Youtube presentation of the report, Faraz Azhar, Industry Head, Performance, South Asia Frontier Markets, Google said: “With half of its population on the internet - Pakistan is now online!"  

Pakistan's Middle Class Growth Among World's Fastest

Google Search and YouTube are the most popular Internet applications in Pakistan, according to the study. YouTube is used by nearly 90% of all internet users in Pakistan for streaming music and watching video/TV, and 38% of Pakistan's internet users go to YouTube in the research phase of their shopping journey. 

Pakistan has also experienced an e-commerce boom in the midst of the COVID pandemic. 71% of Pakistani shoppers find purchasing products or services online easy, while 66% find it convenient. Another 54%  find that online shopping websites or apps give personalized product recommendations, which answer common questions. Two-thirds of consumers believe that online shopping is the way forward. They say they will continue to buy products or services online after the COVID-19 pandemic.    

Faraz Azhar, Industry Head, Performance, South Asia Frontier Markets, Google said: “With half of its population on the internet - Pakistan is now online! This is the first time Google and Kantar released a study to understand more about Pakistan’s internet population. But it’s not only about people getting online, this research has uncovered new insights and behaviors that show how COVID is impacting online behaviour and the digital opportunities waiting to be unlocked.” 

Global Investors of Pakistani Startups. Source: Google-Kantar

"More people are coming online in Pakistan, creating a great opportunity for eCommerce businesses - if they are ready to seize it. As we see more exploration of the internet beyond social, e-retailers can capture natural cross-category purchasing on its rise, but only if they have first established themselves and their product offering in an online marketplace," he said.

Pakistan Startup Funding. Source: Google-Kantar

With expanding Internet infrastructure and rapidly growing user base, Pakistan is now seeing robust growth in venture money pouring into technology startups. Pakistani startups are on track to attract more than $230 million in funding in 2021, more funds than all the money raised by Pakistani startups in their entire history. A recent example is Kleiner Perkins, a top Silicon Valley venture capital investment firm, that led a series A round of $17 million investment into Pakistani start-up Tajir. The startup operates an online marketplace for small store merchants in Pakistan. The announcement came via a tweet by Mamoon Hamid, a Pakistani-American Managing Partner at Kleiner Perkins who led the investment. Last year, Tajir raised a $1.8 million seed round.  The company's revenue has increased by 10x since its seed round. 

Pakistan Technology Exports Trend 2007-2021. Source: Arif Habib

Pakistan's technology exports are experiencing rapid growth in double digits over the last decade. Total technology exports jumped 47% to $2.1 billion in fiscal year 2020-21. 

Pakistan University Enrollment Growth. Source: Encyclopedia of High...

The foundation for Pakistan's digital transformation was laid with the higher education reform and telecommunications deregulation and investments starting in the year 2001 on President Musharraf's watch. With a huge increase in higher education funding, Higher Education Commission Chairman Dr. Ata ur Rehman succeeded in establishing 51 new universities during 2002-2008. As a result, university enrollment (which had reached only 275,000  from 1947 to 2003) soared to about 800,000 in 2008. This helped build a significant human capital that drove the IT revolution in Pakistan.      

 

Please watch the following video presentation for more details on Pakistan's technology startup ecosystem:

https://youtu.be/ePApXOM3vkQ

http://www.youtube.com/embed/ePApXOM3vkQ"; title="YouTube video player" width="560"></iframe>" height="315" src="https://img1.blogblog.com/img/video_object.png" width="560" style="cursor: move; background-color: #b2b2b2;" /> 

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Riaz Haq's Youtube Channel

PakAlumni: Pakistani Social Network

[Riaz Haq]

There are about 10 million college graduates in Pakistan in 2020, according to Pakistan Bureau of Statistics.

About 7 million have a bachelor's degree and another 3 million have master's or PhDs.

https://www.pbs.gov.pk/sites/default/files//tables/EDUCATED%20POPUL...

[Riaz Haq]

There are 10 million college graduates in Pakistan, including master's and PhDs.

The median age in Pakistan is about 22 years....meaning 50% of Pakistanis make up the denominator to calculate the percentage of college graduates in the country.

That means there are 10 million college grads in a little over 100 million population. The percentage of college grads in the country works out to a little less than 10%.

The figure of 10% college grads is in the same ballpark as India's 8.15% population with college degrees.

https://www.thehindu.com/news/national/only-815-of-indians-are-grad...

Despite a big increase in college attendance, especially among women, fewer than one out of every 10 Indians is a graduate, new Census data show.

Over the weekend, the office of the Census Commissioner and Registrar-General of India released new numbers on the level of education achieved by Indians as of 2011.

They show that with 6.8 crore graduates and above, India still has more than six times as many illiterates.

[Riaz Haq]

About 2 million Americans graduated from colleges in 2018.

Half of them (1.01 million) had two-year degree called Associate degree.

0.82 million got 4 year degrees while 0.18 million got master's and PhDs.

https://educationdata.org/number-of-college-graduates

Nearly 94 million, or 42%, of Americans ages 25 and over have a college degree of some type.

Nearly 94 million Americans ages 25 and over, which is about 42% of the total U.S. population in that age demographic, had an associate, bachelor's, graduate, or professional degree, according to U.S. Census Bureau's most recent data.

https://www.bestcolleges.com/news/analysis/2021/07/01/how-many-amer...

[Riaz Haq]

Only 4.5% Population in India is Graduate or Above: Census

https://www.ndtv.com/india-news/only-4-5-population-in-india-is-gra...


Only 4.5 per cent of the population in the country is educated up to the level of graduate or above while a majority of 32.6 per cent population is not even educated up to the primary school level.

According to the census data for 2011 on literacy, workers and educational levels, released by the Registrar General and Census Commissioner of India, literate population who are presently attending any educational institution in the country, below primary occupies the major share of 32.6 per cent.

It was followed by primary (25.2 per cent), middle (15.7 per cent), matric (11.1 per cent), higher secondary (8.6 per cent) and Graduate and above (4.5 per cent).

During the decade 2001-11, improvement is observed at middle and above educational levels and decline in percentage share at lower levels (below-primary and primary).

The improvements at higher educational levels are indication of educational advancement in the country during the decade 2001-11.

The data on workers by five categories of literates namely literate but below matric/secondary, matric/secondary but below graduate, technical diploma or certificate not equal to degree, graduate and above other than technical degree and technical degree or diploma equal to degree or post-graduate degree have also been released.

The data that distributes the population, main workers, marginal workers, non-workers, marginal and non-workers seeking/available for work by literacy status and educational levels separately for total, scheduled castes and scheduled tribes population is also released.

The data reveals that during the decade 2001-2011, there is an overall improvement in literacy status and educational levels of various types of workers and non-workers among total and SC/ST population.

Census 2011 has further exhibited that out of about 55.5 million Marginal workers seeking/available for work in India, the majority of 21.9 million (39.4 per cent) are illiterates followed by 20.9 million (37.6 per cent) literates but below matric/secondary and 8.0 million (14.5 per cent) matric/secondary but below graduate.

[Riaz Haq]

Pakistan's educational attainment progress from 2010 to 2020:

Education Attainment 2010 to 2020

No schooling 18.5% to 21.75%

Below Primary 38% to 18.3%

Primary 19.3% to 30.14%

Secondary 22.5% to 23.85%

College 1.7% to 5.96%

Sources:

Barro-Lee Educational Achievement Dataset

http://www.barrolee.com/

Pakistan Bureau of Statistics

https://www.pbs.gov.pk/sites/default/files//tables/EDUCATED%20POPUL...

[Riaz Haq]

#Pakistan: #NADRA launches #smartphone app for biometric #ID verification. The mobile app helps capture #biometrics and scan doc­u­ments digitally by using #smartphone camera. #DigitalPakistan #technology #fintech #productivity #economy https://www.dawn.com/news/1643738

Keeping pace with technological adv­a­nce­ments, the National Dat­abase and Registration Auth­ority (Nadra) on Tues­day introduced an innovative application enabling pe­o­­ple to use their smartphones for biometric verification.

Talking to Dawn, Nadra chairman Tariq Malik said that by introducing the app, Pakistan has accelerated mo­v­ing towards the digital identity lifecycle. “It is a game-changer as it helps create trust in a variety of transactions between people, ide­n­tity providers, and public and private sector,” he said.

Prime Minister Imran Khan launched Nadra’s Pak-ID mobile application to facilitate applicants of National ID card using Pak-ID portal.

“Inaugurated PAK-ID Mobile App by NADRA. A revolutionary step in providing convenience, especially to Overseas Pakis­tanis,” he tweeted. “Applicants of http://id.nadra.gov.pk can now capture fingerprints, photograph and documents using mobile phone. Great initiative by Tariq Malik & NADRA team.”

The mobile app helps capture biometrics and scan doc­u­ments digitally by using the camera of smartphones.

The prime minister lau­ded Nadra Chairman Tariq Malik’s innovative idea of mobile app which he said was a step towards impleme­nting his vision of inclusive registration and digital Pakistan.

Pakistan becomes trailblazer in ID Management Industry by launching a mobile app which captures biometrics- fingerprints, facial recognition and scan documents needed for processing citizens’ ID cards and documents.

By using the digital app on smart phones, all citizens including expatriates will be able to digitally capture fingerprints, photographs and documents. This is a leap forward putting an end to conventional method of using specialised equipment or physical paper for processing ID documents in Nadra.

Nadra Chairman Tariq Malik said: “The innovation will revolutionise the National ID Eco System in Pakistan by providing public convenience.”

He said the digital dividends of such technology innovation would yield positive results in financial inclusion, ease of doing business and e-governance initiatives by offering remote identification and e-KYC.

The Nadra chairman said that it would open new vistas for businesses allowing them to be rapidly onboard users and provide modern password-less authentication.

This app Pak Identity can be downloaded from Google Play Store (Android) and Apple Store (iOS).

[Riaz Haq]

Pakistan Raises $279 Million in Airwaves Sale With Single Bidder - Bloomberg


https://www.bloomberg.com/news/articles/2021-09-11/pakistan-raises-...

Pakistan raised $279 million in a sale of telecom spectrum at the base price, with Pakistan Telecommunications Mobile Ltd. the sole bidder in an auction that was snubbed by the country’s three other major phone operators.

Pakistan Telecom’s unit Ufone won nine megahertz in the 1,800 megahertz band, the Pakistan Telecommunication Authority said in a statement late Friday. Pakistan Telecom will pay half the bid amount within 15 days and the rest over five years, according to the statement. The total value of both bands of spectrum on offer was $832 million at base price, the regulator said, adding that no offer was made for the 2,100 megahertz band.

Jazz, a unit of Veon Ltd., China Mobile Ltd.’s Zong and Telenor Pakistan -- which are all in a legal battle with the regulator over renewal of their existing spectrum fees -- didn’t take part in the process, the first such auction since Prime Minister Imran Khan came to power three years ago. Veon Chief Executive Officer Kaan Terzioglu earlier this month said Pakistan’s telecom spectrum should be priced in rupees rather than dollars as the pricing is not sustainable.

The spectrum policy, pricing and rollout obligations deterred Telenor from participating in the airwaves sale, spokesman Saad Warriach said after the bidding was closed Thursday. “The existing circumstances did not present the economic viability to invest in the spectrum during this year’s auction,” he said.

Pakistan’s mobile subscriber’s base has reached 84.4% of the country’s 220 million population, according to Pakistan Telecommunication Authority data.

[Riaz Haq]

36 Pakistani varsities feature in Times Higher Education ranking

https://www.geo.tv/latest/368489-36-pakistani-varsities-feature-in-...

Two universities featured in the 301-400, five in the 401-600, nine in the 601-800, ten in the 801-1,000 and nine in the 1,001+ rank band.
Pakistan is one of the world’s fastest-improving nations on key metrics for universities, says Shafqat Mahmood.
The overall ranking includes 1,117 universities from 94 countries and regions.

Thirty-six public and private sector universities of Pakistan were featured in Times Higher Education Ranking 2021, marking a significant improvement in the global standing of the country's varsities.

One university featured in the 201-300 rank band, two in the 301-400, five in the 401-600, nine in the 601-800, ten in the 801-1,000 and nine in the 1,001+ rank band.

Education Minister Shafqat Mahmood shared the news regarding Pakistani varsities making it to the global ranking.

Mahmood tweeted: “Last three years have seen a greatest upward movement of Pakistani universities in global rankings. We still have ways to go, but the direction is right, the pace is good. Credit to PTI government and the universities that made us proud.”

Sharing a link to the report on Twitter, the education minister said: “Pakistan is one of the world’s fastest-improving nations on key metrics for universities. We are among the top five nations for improvements in research citations and industry links.”

According to the global ranking, the National University of Sciences and Technology (NUST) featured in the 300 rank band, while the University of Agriculture, Faisalabad, and COMSATS University Islamabad featured in the 400 rank band.

The University of Lahore and NED University of Engineering and Technology were in the 401-600 rank band, while Fatima Jinnah Women University, Jinnah Sindh Medical University and the University of Sargodha were in the 601-800 rank band. The Iqra University, Dow University of Health Sciences and Quaid-e-Azam University were in the 801-1,000 rank band.

The Times Higher Education Impact Rankings is the global performance index that assess universities against the United Nations’ Sustainable Development Goals (SDGs). The assessments are done across four broad areas — research, stewardship, outreach and teaching.

The 2021 Impact Rankings is the third edition and the overall ranking includes 1,117 universities from 94 countries and regions.


https://www.timeshighereducation.com/rankings/impact/2021/overall#!/page/0/length/100/locations/PK/sort_by/rank/sort_order/asc/cols/undefined

[Riaz Haq]

Big Tech wants to build the ‘metaverse.’ What on Earth does that mean?
Microsoft, Facebook and other tech companies claim a virtual reality universe is the future of the Internet.

https://www.washingtonpost.com/technology/2021/08/30/what-is-the-me...


What is the metaverse?
The term was coined by writer Neal Stephenson in the 1992 dystopian novel “Snow Crash.” In it, the metaverse refers to an immersive digital environment where people interact as avatars. The prefix “meta” means beyond and “verse” refers to the universe. Tech companies use the word to describe what comes after the Internet, which may or may not be reliant on VR glasses.

Think of it as an embodied Internet that you’re inside of rather than looking at. This digital realm wouldn’t be limited to devices: Avatars could walk around in cyberspace similar to how people maneuver the physical world, allowing users to interact with people on the other side of the planet as if they’re in the same room.

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The 2018 sci-fi film “Ready Player One” offers a glimpse of what many technology companies prophesy is the Internet’s next big thing.

Inspired by a 2011 Ernest Cline novel, the film’s orphaned teenage hero flees his bleak real-world existence by immersing in a dazzling virtual reality fantasy. The boy straps on his headset, reminiscent of a pair of VR goggles, and escapes into a trippy virtual universe, dubbed “OASIS.”

“People come to the OASIS for all the things they can do, but they stay for all the things they can be,” the main character says in the trailer.

A number of sci-fi-inspired tech CEOs say that one day soon, we will all be hanging out in an interactive virtual reality world, complete with games, adventures, shopping and otherworldly offerings, just like the characters in the movie.

Instead of OASIS, they call it the metaverse.

The metaverse is different from today’s virtual reality, where clunky headsets offer siloed experiences and few chances to cross-play with people who own other gadgets. Instead, the metaverse would be a massive communal cyberspace, linking augmented reality and virtual reality together, enabling avatars to hop seamlessly from one activity to the next.

It’s a huge undertaking that would require standardization and cooperation among tech giants, who are not prone to collaborating with competitors — though it hasn’t stopped many from saying the metaverse is just around the corner.

Facebook should be known as a “metaverse company,” CEO Mark Zuckerberg said in July on an earnings call. The goal, he said, is to populate this virtual world by enticing new users with cheap headsets. Eventually, Zuckerberg hinted, this robust user base would prove an adverting boon: “hundreds of millions of people” in the metaverse “compounds the size of the digital economy inside it.”

Facebook moved closer to this vision in recent weeks, revealing a virtual reality workspace for remote workers. The company is also working on a smart wristband and VR goggles that project the wearer’s eyes. The company is investing billions of dollars into the effort.

The metaverse doesn’t exist today, and there’s no clear date for its arrival. Augmented reality and virtual reality have yet to woo the masses and remain a niche interest, despite Zuckerberg’s pledge in 2017 to bring a billion people onto Oculus headsets.

[Riaz Haq]

Exit strategy post blitzscaling

Access to capital has become easier as we are seeing many foreign VCs showing interest in Pakistan

https://www.dawn.com/news/1646134

Some might deem this conversation to be a little premature but as more and more Venture Capital (VC) money is coming into Pakistani startups and at higher valuations, one has to ask: how do they plan on making returns? Most of these well-funded companies are being built on the premise of blitzscaling, which involves a high cash burn and (supposedly temporary) disregard for profitability to focus on top-line growth. That basically leaves two ways for financiers to make money on the deals. The first is to take the entity public and sell the stake. Alternatively, dilution through mergers and acquisitions (M&A).

Let’s take the first one: very few tech companies to this date have considered listing on the Pakistan Stock Exchange (PSX) as clear from the particularly small number of scrips in the sector, let alone direct-to-consumer or product-based startups. There is obviously a good reason for that since most of these young organisations require lots of risky money which is the domain of venture capital firms, who are often willing to accord head-scratching valuations otherwise unlikely to be perceived the same way by the general public. Just take Airlift’s latest $85 million Series B which put the grocery deliverer at $275m barely a year into operations and a fleet that takes some effort to spot on Karachi’s roads at least. In comparison, Airlink, the mobile distributor and manufacturer, raised $39m in its initial public offering after over a decade of business and a healthy bottom line.

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That still leaves with the second option, M&A, to investors to make a return. However, there again, Pakistan hasn’t been the hottest market in any sector, forget tech. One glimpse of hope has come from the Middle East where VC-funded startups with lots of cash are eyeing for regional expansion to help them raise subsequent investment rounds and are on the lookout to eat up smaller players in their sectors.