What Pakistani startups can learn from India

Updated July 05, 2016

Email

Should we be looking to the Indians as a role model? —Illustration by Fahad Naveed/Dawn.com
Should we be looking to the Indians as a role model? —Illustration by Fahad Naveed/Dawn.com

Let’s begin with hard facts. There are reasons, simple reasons why the Indian tech industry, as of now, is far ahead of the Pakistani tech industry.

The number and quality of education in engineering institutes in both the countries differ immensely. In India, the state of Andhra Pradesh alone has more than 700 engineering colleges.

Pakistan, on the other hand, has 178 higher education institutions that have the ability to award degrees. The number of tech and engineering institutes in Pakistan is certainly a handful — some being relatively new.

Research, the main factor

India’s education system is based on what is new and innovative in the software market and we, Pakistanis, are still following the same old syllabus, especially at college level.

This makes it harder to grow. There is a need for change, even though the number of PhD scholars have gone up in recent years, we need to create an environment towards meaningful research in Pakistan.

Also read: The sorry state of research at our universities and how to fix it

India is one among the first five largest startup communities in the world, with the number of startups crossing 4,200 — there is a reason why Google’s CEO is Indian.

Flipkart is India’s most valued startup with an estimated worth of over $15 billion. Our version of Flipkart is Daraz.pk, which is still relatively new. Pakistan’s IT Service Exports are a total of $2.2 billion, whereas India's was $82 billion last year.

According to experts, government policies are imperative for an environment to allow for economic and entrepreneurial growth.

In 2014, according to the Economist Intelligence Unit, Pakistan was ranked 74 out of the 84 countries in being the most business friendly. In comparison, India has been ranked among the three most attractive destinations for inbound investments.

Pakistan’s major problem is its neglected human resource development.

Internet connectivity is the basis for a healthy tech industry. Pakistan, with an estimated population of over 180 million individuals, has almost 20 million broadband users. The ministry is now developing a comprehensive strategy for governing the Internet here.

Mobile phone penetration is high in both countries, Pakistan has the highest in South Asia with over 90 per cent geographically coverage areas and 140 million subscribers.

One of the problems the mobile app market is facing as of now is saturation, meaning there are too many applications doing the same thing, or something incredibly similar to another application. There is a dire need for new ideas that serve our market.

The problem with Pakistani startups is that a lot of the companies that exist, outsource and don’t develop product locally. The question that Pakistani startups need to ask themselves:

“Is the product perfect for the market or is it needed by the market?"

Most startups worldwide aren’t able to understand their consumers, and create products that are useless in the market.

Pakistan’s IT industry faces issues in terms of technicality, a lack of trained professionals. There is also a lack of linkage between universities and the budding tech industry, and the sad reality is that technical schools produce low quality education.

Students from prestigious universities are recruited by the tops firms, or end up leaving the country because software engineers are in high demand abroad.

An inherent brain drain

Pakistani professionals feel useless in a market that won’t understand and value their worth.

A good website developer will get up to PKR 25,000 for a beautiful website in Pakistan. The same developer can get up to $2,000 from the States! The choice is obvious: go where the money is.

Indians are highly saturated in international software houses. Also, while the largest software house in Pakistan has almost 250–300 employees, India’s largest software company, Tata Consultancy Services has over 333,843 employees.

There is a lack of hardware components at times and companies here develop their own hardware from level zero. The non-availability of components sets us back, often for months on end.

In such cases, our companies are forced to reinvent the wheel to complete projects on time. This is because many of the components needed aren’t manufactured here, and have to be imported, and taxes take a toll on companies.

Also read: 15 start-ups that are changing the way Pakistanis live

A simple example: The basics of every tech company starts with a computer. The government’s policy towards Information Technology is harsh towards computers and peripherals, as of now, there is a 17 per cent of GST on all hardware purchased in Pakistan.

With overheads as high as these, there is little to no incentive to develop hardware. Other than this, a whopping 40 per cent of the Pakistan IT services industry has moved to the United Arab Emirates, because of the 8 per cent additional tax, this tax is fatal for small budding startups.

So, should we be looking to the Indians as a role model?

Pakistan stands at the 20th position, whereas they stand number one as software exporters. I, for one, feel that if there are positive lessons to be learned about the software industry then Pakistan should humbly learn them.


This piece first appeared on MIT Technology Review Pakistan and has been reproduced with permission.