Pakistan’s economic future is increasingly being framed around keyboards rather than kilns, code rather than concrete. As growth in traditional sectors slows and global competition sharpens, economists and policymakers are turning their attention to high-tech services as a potential engine capable of lifting the country onto a more sustainable path.
That message came through clearly this week in Karachi, where leading voices argued that Pakistan’s long-term prospects depend on how boldly it embraces technology-driven industries.
A Lecture That Sparked a Broader Economic Rethink
The debate gained fresh momentum during the 25th Zahid Hussain Memorial Lecture, an event that has become a platform for critical reflection on Pakistan’s economic direction.
Speaking at the lecture, Amir Sufi, a professor of economics at the University of Chicago, delivered a pointed assessment of where Pakistan stands and where it risks falling behind.
According to Sufi, countries that are managing to grow consistently are no longer relying primarily on low-value manufacturing or asset-heavy industries. Instead, they are investing in high-tech services that reward skills, creativity, and adaptability.
Pakistan, he suggested, has not made that shift decisively enough.
One sentence from his remarks stood out. Growth today is built on ideas more than assets.
Why Traditional Models Are Losing Steam
For decades, Pakistan’s economy has leaned heavily on conventional sectors such as textiles, basic manufacturing, agriculture, and real estate. These industries employ millions and remain politically sensitive, but economists argue their capacity to generate sustained growth is limited.
Global markets have changed.
Low-cost manufacturing faces fierce competition from countries with deeper supply chains and more automation. Asset-based sectors, while profitable for some, do not scale easily or absorb educated youth in large numbers.
High-tech services offer a different profile.
They generate more value per worker, depend on human capital rather than land or machinery, and plug more naturally into global demand. Software development, IT services, digital platforms, data analytics, and creative tech exports can grow without the same physical constraints.
For a country with a young population and rising internet penetration, that matters.
Human Capital as Pakistan’s Untapped Advantage
Sufi emphasized that Pakistan’s real advantage lies in its people.
Each year, hundreds of thousands of young Pakistanis enter the workforce. Many are digitally literate. A growing number already earn income through freelancing, remote work, and IT exports.
Pakistan consistently ranks among the top countries for freelance activity on global platforms. IT exports have expanded steadily over the past decade, even during periods of broader economic stress.
Yet, experts say, this momentum remains underleveraged.
Without supportive policies, many tech workers operate informally, lack access to finance, and struggle to scale from solo operations into companies that can hire and train others.
That gap between potential and policy is where reform becomes urgent.
Financing Ideas in a System Built for Assets
One of the sharpest critiques raised during the lecture focused on Pakistan’s financial system.
Sufi argued that heavy reliance on collateral-based lending holds back innovation. Banks are comfortable lending against property, inventory, or machinery. They are far less willing to fund startups built on software, algorithms, or intellectual property.
For technology firms, that model doesn’t fit.
A startup’s main assets are often its code, its talent, and its customer base. None of those easily satisfy traditional lending requirements. As a result, many promising ventures remain underfunded or fail to launch at all.
This bias, economists warn, tilts the economy toward low-risk, low-growth activities while starving high-growth sectors of capital.
Changing that equation requires new lending frameworks, risk-sharing mechanisms, and a willingness to evaluate value differently.
The State Bank Signals a Shift
Officials from the State Bank of Pakistan attending the event said steps are already being taken to modernize the financial ecosystem.
They highlighted initiatives aimed at improving financial inclusion and easing access to credit for small and medium-sized enterprises, particularly those operating digitally.
Among the measures discussed were expanded digital payment systems, electronic know-your-customer processes, and regulatory support for fintech and digital banks. These tools are designed to reduce friction, lower costs, and bring more businesses into the formal financial system.
While still evolving, such reforms are seen as necessary foundations for a tech-driven economy.
One official described it simply. You can’t build a digital economy on analog rails.
IT Exports and Freelancing Offer Proof of Concept
Despite structural challenges, Pakistan already has examples of what a tech-oriented future could look like.
IT exports have become one of the country’s most resilient sources of foreign exchange. Freelancers provide services ranging from software development and design to digital marketing and data work for clients worldwide.
This ecosystem grew largely without heavy state planning, driven instead by individual initiative and global demand.
Experts argue that with better policy alignment, the sector could expand much faster.
Formal training programs, clearer tax treatment, easier cross-border payments, and access to venture financing could help freelancers transition into firms. Firms, in turn, could employ thousands, creating a multiplier effect across the economy.
The ingredients exist. Coordination has lagged.
A Broader Shift in Economic Thinking
The conversation in Karachi reflected a broader rethinking underway among economists and planners.
High-tech services are not seen as a replacement for all traditional sectors. Agriculture and manufacturing will remain important. But their role may change, becoming more technology-enabled rather than labor-intensive.
Precision farming, smart logistics, automation, and data-driven supply chains all blur the line between “old” and “new” sectors. At the center of that shift sits technology.
Countries that succeed, Sufi argued, are those that invest early and consistently in innovation, research, and skills.
Those that hesitate risk being locked into low-value niches.
Policy Choices With Long Shadows
The decisions Pakistan makes now could shape its economy for decades.
Investing in high-tech services requires patience. Returns are not always immediate. It also demands tolerance for risk and failure, something bureaucratic systems often struggle with.
But the alternative carries its own risks.
Continuing to rely on sectors with shrinking margins and limited scalability could leave the economy vulnerable to external shocks and internal pressure from a growing workforce.
As one participant at the lecture noted quietly, the real danger is not change, but delay.
A Window That May Not Stay Open
Global demand for digital services continues to rise, but competition is intensifying. Countries across Asia, Eastern Europe, and Africa are racing to position themselves as hubs for technology talent.
Pakistan’s window is real, but it is not endless.
The discussion at the Zahid Hussain Memorial Lecture underscored a shared view among experts: high-tech services are no longer optional add-ons to the economy. They are fast becoming its backbone.
