How does digital transformation affect businesses? | Express Tribune

Karachi:

E-commerce is currently growing rapidly in Pakistan and is expected to continue to grow in the coming years. This creates 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 several benefits such as scalability, flexibility and cost savings. The digital economy is growing rapidly and is expected to greatly contribute to the country’s economic growth in the coming years. Pakistan is a developing country with 240 million people, 65% of whom are between 15 and 40 years old. Internet penetration is growing by 23% year-on-year and the mobile market is vibrant with over 170 million subscribers.

The government has 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, enhance digital skills and awareness, promote a culture of research and innovation, and implement a smart government ecosystem to deliver efficient and transparent services.

Digital transformation is already starting to affect various sectors of the economy such as transport and logistics, finance, education, healthcare, agriculture and manufacturing. According to a PwC report, digitization can help Pakistan increase its GDP per capita by 3 to 5 percent over the next three years.

Some of the key technologies that have transformative potential for Pakistani businesses include: mobile internet, cloud computing, big data, artificial intelligence, fintech, IoT and remote sensing, advanced robotics, and additive manufacturing. These technologies can enable businesses to improve productivity, quality, agility, customer experience and market access.

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

Similarly, Foodpanda is a food delivery platform that has revolutionized the way people eat in Pakistan. This has helped the restaurants to attract more customers and increase their sales. In 2022, Foodpanda delivered more than 100 million meals in the country and employed more than 10,000 riders.

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

Businesses that have invested in digital transformation have seen higher growth rates in their IT exports than those that have not. Businesses that have implemented digital technologies such as cloud computing, big data and artificial intelligence have seen an average 30% increase in their IT exports over 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 challenges and risks for Pakistani businesses. These include cyber security threats, data privacy issues, 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 includes assessing current capabilities and readiness, identifying their goals and opportunities, selecting the right technologies and partners, implementing solutions effectively and securely, and monitoring and evaluating results.

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

To maintain this momentum and use the full potential of digital transformation and IT exports for economic development, there are numerous challenges and opportunities that must 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 phone connectivity, cloud computing, data centers, etc., which are necessary to enable digital access and inclusion in urban and rural areas.

In addition, there is a need for an enabling 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 cooperation.

Digital transformation and IT exports are critical to economic growth and competitiveness in the 21st century. By analyzing the previous data, it can be seen that Pakistan has made significant progress in this sector in recent years.

By anticipating future trends, it can be predicted that there will be more opportunities and challenges for Pakistani businesses in this sector in the coming years.

By examining the social, political, geographical and economic values ​​of this sector, it can be seen 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 an inclusive, innovative and prosperous digital Pakistan.

The author is a member of PEC and has done his Masters in Engineering

Published in The Express Tribune, November 6the seventh2023.

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