The fast-paced development of digital technologies and the impact of the COVID-19 pandemic have served to transform the economy of Pakistan in a manner in which it is both necessary and urgent to adapt to the current circumstances of technological change. It is imperative that the government must act in a manner that anticipates the complex and changing nature of the economy via technology to develop the necessary regulations and policies to facilitate a thriving and flourishing digital economic ecosystem.

OICCI Digital Report 2022 offers key recommendations on the various facets of the digital transformation of economy including digital infrastructure and connectivity, government, private sector, mass digital use cases, and emerging web 3.0 technologies for the government and policymakers to experience a key paradigm shift and accelerate innovation in Pakistan. While these recommendations are by no means comprehensive in nature, they reflect the key sectors and segments of the economy that the OICCI member companies believe can be leveraged to create the most impact for the future.

At present, internet penetration has grown to 49% and the rate of cellular mobile connections is approximately 82%, with 31.5% constituting active social media users. Whilst the digital infrastructure and connectivity have improved over the last few years, the gender and geographical gaps in fiber optic connectivity are huge. Therefore, we recommend creating a favorable investment environment, reducing the import duty to promote local development of fiber optic cable, and ensuring 4G for all before rolling out 5G to improve connectivity.

In recent years, there has been tremendous development in Digital Financial Services and Fintech. However, Pakistan is still a cash-based economy. The lack of data to evaluate credit performance of the consumers and complex regulatory regime are big hurdles to the growth of Fintech. Introducing tax incentives for merchants to adopt electronic payments, improving the regulatory framework for Fintechs to work independently, and expediting the establishment of Fintech Facilitation Desks at federal and provincial levels to support access to funding, mentorship and training will create a significant impact on upgrading this segment into a major contributor in economic transformation and uplift.

Notably, Pakistani E-Commerce market grew at 29% in 2021, which also contributed to worldwide growth. However, regulatory hurdles to integrating platform business models, e-commerce taxation, difficulties in cross-border funds movement, and warehouse management have created resistance to the growth of such platforms. Keeping this in view, the government needs to simplify the regulations, encourage international e-commerce companies to set up regional offices in Pakistan, and support startups and initiatives aimed at digitizing SMEs with enhanced cybersecurity.

Rapid digitalization is generating new business models, cutting the costs of trade-in services, and offering new opportunities. Therefore, to increase the export of IT and IT-enabled services, we suggest to promote training and capacity building in collaboration with universities and other educational institutions, reduce custom and import duties on computers and laptops, provide innovation grants and other incentives to support R&D in software development, and technologies which will create a shift and significantly impact the IT ecosystem.

An effective digital harassment policy, relaxed regulations around financial trading, improved access to regulators, and proactive anticipation of future digital trends are essential for a successful digital revolution. Staying updated on global and regional regulations on emerging technologies will aid in achieving the vision of a digital Pakistan.

Government and social sectors can be huge beneficiaries of digitization. It can bring a lot of efficiency to government services, increase agriculture productivity, and help expand health and education services to far-flung and backward areas of the country. To reap these benefits, investing in human capital, improving consumer access to e-government services, dedicated cell for AgriTech startups, adopting phased-wise digitization of the education and health sectors, preparing National electronic health records, and arranging capacity-building workshops for teachers, doctors, farmers, and females can play a huge role in the uptake of digitization in government and social sectors.

The global shift towards Web 3.0 presents a once-in-a-lifetime opportunity for Pakistan to capitalize on this movement and bring the nation out of its current economic situation. To reap the benefits of these developments the policymakers should create an enabling environment to thrive and innovate, develop facilitative regulations to promote local and foreign investment, consider including modern technologies in the school and college curriculum, and support startups working on modern technologies through investment, grants, and subsidies.

The digital revolution can take place only in an environment that is evolving, robust, and supports digitization. An effective digital harassment policy that ensures online safety via simplified processes is the first step in that direction. Other measures to expedite digitization include relaxing of existing regulations around financial trading, improved access to regulators which allows effective coordination amongst different regulatory and governmental bodies, and anticipation of future developments by developing a shared understanding of emerging digital trends. Further keeping up-to-date with global and regional regulations on developing technologies will also aid in accomplishing the vision of a digital Pakistan.