Pakistan Softwares Export Board – Exporting The Future

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    Interview with Mr. Zia Imran Managing Director Pakistan Softwares Export Board (PSEB)

    Please tell us about your educational and professional background?

    I am an engineer by profession. I completed my bachelors in Electrical Engineering from theUniversityofEngineeringand Technology (UET),Lahore. After my bachelors, I went toAmericafor a master’s degree in computer engineering fromCornellUniversity.

    After graduation, I worked for about 10-12 years in Silicon Valley (mostly inSan FranciscoandPittsburg-Pennsylvania). I mostly worked for the IT industry including Oracle, product management and consultancy. While I was working for Oracle, I also did my MBA in finance and entrepreneurship from theUniversityofChicago.

    I came back toPakistanin 2004. After coming back, I established a company for a friend who was residing abroad and wanted to have a team inPakistanto outsource projects. After that, I started my own software house with a partner which is still operational.

    I was also the Chairman for Pakistan Software Houses Association (pasha) for one year. In January 2010, I was appointed the Managing Director of PSEB.

    What are the objectives of the Pakistan Software Exports Board (PSEB)?

    PSEB basically handles the affairs of the software exports fromPakistan. These exports include IT and IT enabled services (business process outsourcing, back office operations, call centers etc). Our job is to facilitate the export of all IT and software services. We do not physically go and find buyers to export the products and services but facilitate the local industry. We conduct different kinds of programs to assist the industry.

    We try to increase the outreach of our companies by taking the local companies to international trade shows to exhibit their products and generate business leads.

    We also have local exhibitions where companies can exhibit their own products. We help our member companies to get space on subsidized rates and help them to setup their stalls.

    Another important venture is the online IT industry web portal project. The idea is to take the best products and services from the local industry and make them available online to sell in international market. The web portal will also have company’s directory with all of their previous projects details and interviews of CEOs. We also provide infrastructure for companies like high bandwidth or office space. Our agenda involves the capacity building of our companies. We facilitate them in getting international certification which helps them in selling their products.

    What is the present situation of IT industry in Pakistan?

    Overall, the IT industry has done considerably well in the last 2 years as compared to other industries of Pakistan (growth of 10% to 15%). The mobile applications have even grown by 40% on yearly basis. This can be seen in the increasing salaries of the employees hired in the companies. Half of an IT company’s cost comprises of the salaries of their employees. These employees charge more as they are highly skilled and it is a labor intensive business.

    According to the figures of State Bank ofPakistan, it is evident that the industry did not decline during the last 2 years of recession. On the contrary, it still expanded or at least remained in the same position.

    What are the major problems being faced by the software industry of Pakistan?

    In my opinion, the major problem is the shortage of quality human resource. The predicament is not the amount of acquired work but the amount which we can retain or get back. Another problem is that we are producing very few Tier 1 graduates.

    Do you think that our Tier 1 graduates usually go abroad for jobs and very less skilled workforce remains in Pakistan? Does this pose a problem for the industry?

    I do not believe that. If you seeIndia, half of their IT graduates are working in other countries .It is a blessing for their industry because those people will ultimately become the country’s brand ambassadors. Almost in every large IT multinational organization, one of the key decision makers is an Indian.  When a local company fromIndiaapproaches that particular company for business reasons, it becomes fairly simple for them to communicate and get business from them.

    The IT graduates working abroad are sending millions of dollars toPakistanwhich is beneficial both for the industry and the country. One cannot stop the brain drain. We should produce more Tier 1 graduates in the IT industry so that if some of them go abroad, there still will be enough to work for the local industry. The Higher Education Commission can play a vital role in this issue by increasing the quality of education.

     

    How much software does Pakistan export?

    According to our studies, last year’s revenue from software exports was $450 million which I think is less than actual figures. Software is a service and not a tangible product which makes it hard to measure the actual exports as many companies are selling their products to other countries from their homes through the internet.

    How can we increase the amount of software exports?

    First, we need to produce more quality graduates. From the PSEB perspective, we need to facilitate entrepreneurs to form companies by providing them improved infrastructure and IT parks. A large number of buyers do not visitPakistanbecause of the law and order situation. There should be a software park located in a secure compound, where the buyers can feel safe to visit.

    Another important factor is to provide better middle management training. There is a lack of efficient middle managers who can supervise the projects properly and who also know how to market the products.

    Tell us about your plans of starting IT parks?

    Our strategy is based on Build, Operate and Transfer basis which means the government provides the land to the investors of the private sector and then the investor constructs the building and rents it out to software companies. After a few years, the investor hands over the building back to the government also making some profit during the entire process.

    Right now, there are 2 IT parks inIslamabad, 2 large and 2 small IT parks inLahore, and 1 inKarachi. In total, we have around 50,000 square feet of office space.

    Apart from main cities like Islamabad, Lahore and Karachi, do you think there should be IT parks in other cities as well?

    I think establishing IT Parks should not be the first step. The entire procedure starts with a private individual or an enterprise taking an initiative in forming a company. The bottom 20% of our industry business is being operated from houses which show that some individuals are capable of working and making profit by working right from home. Internet connection is now available in almost every area ofPakistan. Private sector needs to invest and take initiative in this aspect. We need to create the variables that will increase the formation of companies in small towns. This industry does not require a large capital to start a company. All a person needs is an internet connection which is available in almost all the districts ofPakistan.

     

     

    How do you facilitate the foreign companies who are interested in investing in Pakistan?

    We are facilitating them by helping them in forming their joint ventures. Any company which is incorporate inPakistan, there is no tax on software export which is a huge facilitation our industry can offer to a foreign company. Many Pakistani expatriates have started their own software houses inPakistan.

    According to recent figures, around 20,000 software students are graduating every year in Pakistan. What steps is PSEB doing to help these students?

    As I have mentioned earlier, if you are an apt graduate, you can easily get 2 to 4 job offers instantly. We are producing a large number of Tier 2 graduates and it is the job of the Higher Education Commission to solve the problems of these students as the present education system has created these Tier 2 graduates.

    As a representative of PSEB, we are trying to solve this problem in a small way by providing internship and apprenticeship programs to the graduating students. Under these programs we are offering subsides of Rs. 12,000 per student in the form of their salary. For example, if a company cannot afford or find a Tier 1 graduate, the PSEB encourages them to hire Tier 2 graduates and also give Rs. 12,000 of the employee’s salary. If a company has hired an employee at Rs. 20,000 per month salary, the company will be paying only Rs. 8,000 and the rest Rs. 12,000 will be paid by PSEB as a subsidy. We have seen in these programs that the retention ratio is 80%. 80% employees remained in these companies to learn and don’t shift to other jobs.

    Academic institutions need to step up to take the initiative of improving the quality of education. If a student graduates from IBA or LUMS, he will definitely get a job as every company knows that he will be productive for their company. Government cannot do much in this aspect. The academic institutions owe to this country to at least produce quality graduates.

    PSEB also organizes small seminars in which industry professionals go to institutions and talk about their experiences, industry opportunities and software case studies.

    Many IT companies complain that the government is not playing its part to facilitate them. What is your opinion on it?

    I do not agree with it. The government is charging Zero tax from software exports which itself is a major relief for the IT/software companies. Government might have missed a few opportunities but it is wrong to say that it is not doing anything at all.

     

    What opportunities do you see in the software industry of Pakistan?

    These days’ mobile applications and casual gaming have great potential. Mobile applications for instance are expanding with mobiles like iphone. Companies which are working in these 2 areas have developed enormously.

    What is your short term and long term plans as the Managing Director of PSEB?

    I want to increase the digital reach of our companies and also launch our online portal very soon. In the long run my wish is to start a state of the art IT Park.

    What advice or suggestions would you like to give to the private sector of Pakistan?

    I want to give my message to the affluent individuals of this country. They should take 5 percent of their wealth and invest it in high risk ventures including technology related businesses instead of financing again and again in safe businesses like sugar mills, steel mills etc. If they take such risks, they might even end up with a company like Google.

    The IT companies are believed to be exceptionally high risk ventures. The ratio inSilicon Valleyis that only 2 out of 10 companies are successful and 1 or 2 will be moderate while the rest are considered failures. The government cannot provide this amount of capital to the entire industry. There should also be some participation from the successful private sector.

     

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