Mustafa Bilal / The Diplomat
New Delhi: In recent years, states have strived to harness digital innovation’s potential, transforming the global information technology (IT) landscape. One notable example is the strengthening IT cooperation between Pakistan and Saudi Arabia. This has been spearheaded by the LEAP technology conferences held in Riyadh, which are dubbed the “Digital Davos” as they are attended by hundreds of tech firms from across the world.
Pakistani IT companies generated leads worth over $100 million during last year’s event. Subsequently, LEAP 2024 in March served as a pivotal platform for globally marketing the potential of Pakistan’s IT firms. This year’s LEAP showcased a large contingent of 74 Pakistani firms, underlining the trend of Pakistan’s increasing engagement with Saudi Arabia on IT.
The Pakistan pavilion highlighted the country’s rapidly advancing IT ecosystem and signified its commitment to positioning itself as a tech hub in the region. It also facilitated meaningful interactions with industry leaders and potential investors. These engagements were crucial for opening new avenues for collaboration and attracting foreign investment to fuel Pakistan’s digital growth.
Several noteworthy agreements were inked during LEAP 2024, such as the memorandum of understanding (MOU) between the Pakistan Software Houses Association (P@SHA) and the IT Association of Bahrain, and the equity partnership between SuperNova Solutions and a Saudi investor group. Such deals underscore the growing confidence in Pakistan’s IT capabilities and are tangible manifestations of IT cooperation between Pakistan and its Gulf partners.
These partnerships are not only providing Pakistani start-ups with the necessary capital to scale-up their operations but are also offering access to the vast Saudi market and beyond. Multilateral forums such as the Digital Cooperation Organization (DCO) also aim to augment the bilateral digital cooperation between the two states.
Saudi Arabia’s ambitious Vision 2030 is underpinned by digital transformation, creating an attractive market for Pakistan’s growing digital sector. This is supported by reports that Pakistan’s IT exports to the Kingdom have increased by up to $100 million in the past two years. Overall, Pakistan’s IT exports are expected to top $3 billion in 2024, with the United States being the largest market to date.
However, as Saudi Arabia increasingly becomes the flag bearer of Pakistan’s IT capabilities, the overall digital ecosystem in Pakistan is poised to experience accelerated international outreach. This is aligned with the strategic objective of the Pakistan Software Export Board (PSEB) and P@SHA to promote Pakistan as an internationally attractive “Tech Destination.”
The establishment of the Saudi-Pakistan Tech House furthers this objective. It was announced in March 2023 by Prince Fahad bin Mansour Al Saud and will focus on talent development and capacity building. Its first branch will be in Lahore, Pakistan. This initiative was launched with a $100 million investment and is expected to create over 1,000 jobs. By creating a platform for joint ventures, the Tech House is set to catalyze growth in the IT sectors of both states and facilitate the exchange of human capital.
Indeed, the Pakistan-Saudi Arabia IT cooperation is not just about infrastructure and investments; a key focus has been on enhancing human capital. On its end, Pakistan is striving to ensure that its 75,000 annual IT graduates are prepared for current industry trends to meet the demands of Saudi Arabia’s Vision 2030 projects. This will not only aid in realizing the Kingdom’s ambitious development goals but also provide valuable employment opportunities for Pakistani professionals, thereby contributing to the economic development of both states.
To this end, an MOU was signed in October 2023 to facilitate small and medium-sized enterprises (SMEs) and create a special desk for streamlining the registration of Pakistani IT firms in Saudi Arabia. This underscored the bilateral recognition of the critical role start-ups and SMEs will play in driving digital innovation. By laying the groundwork for these entities to thrive, Pakistan and Saudi Arabia are thus nurturing the seeds of future technological breakthroughs that could have multi-sectoral benefits.
By collaborating on projects related to e-health, e-education and e-governance, Pakistan can accelerate its digitalization efforts and enhance the quality of life for its citizens. Pakistan should hence capitalize on the momentum in IT cooperation and leverage the financial backing of Saudi Arabia via the Special Investment Facilitation Council (SIFC) for expediting such projects. The Saudi Arabia recently announced plans to become the world’s largest player in artificial intelligence, with an initial investment of more than $40 billion.
To conclude, while Pakistan’s IT cooperation with Saudi Arabia is on an upward trajectory, navigating the opportunities and challenges in the digital frontier will require concerted efforts from all stakeholders. In this regard, it is commendable that during a meeting with a high-level IT delegation on March 28, Pakistan’s new IT Minister Shaza Fatimah assured that the government will facilitate the increase of IT exports by cultivating talent in the youth. Certainly, the untapped potential of Pakistan’s promising IT talent should be harnessed to materialize Pakistan’s envisioned digital aspirations and further strengthen the IT partnership with Saudi Arabia.
