V Technology Geopolitics & AISouth Asia
ISSI finds Pakistan's digital exports stuck in small freelance jobs
- Institution
- Institute of Strategic Studies Islamabad (ISSI)
- Author
- Mian Ahmad Naeem Salik
- Country · language
- Pakistan · English
- Affiliation
- State-affiliated think tank
Summary
In a 4 November brief, ISSI researcher Mian Ahmad Naeem Salik argues that growth in Pakistan's information technology (IT) exports does not amount to a competitive digital economy. According to central bank (SBP) data, exports of telecom, computer and information services rose from $3.814 billion in fiscal 2025 to about $4.6 billion in fiscal 2026. That is 46% of total services exports of roughly $10 billion. The Economic Survey sets an annual target of $15 billion, while the August 2026 memorandum with Google sketches a broader $30 billion goal for 2030. The author notes that the two targets do not measure the same thing.
The brief's centre of gravity is the quality of those exports. According to a Pakistan Business Council (PBC) study, freelancer transactions made up 90.8% of recorded IT export entries in fiscal 2025 but only 24.1% of their value. The average freelance transaction was $359, against $12,618 in software consultancy. Median freelancer receipts fell from $106 in fiscal 2021 to $63 in 2025. The author says artificial intelligence could intensify this pressure, but adds that automation has not been shown to be the cause of the decline.
The second constraint is infrastructure. Of 160.9 million broadband subscriptions as of March 2026, only about 4.29 million were fixed-line. The March 2026 5G spectrum auction raised about $509.6 million; in the author's view, extra spectrum cannot make up for weak backbone connectivity. According to the PBC, only 10–12% of annual IT graduates are employable without further training, and R&D spending stands at 0.16% of GDP. The recommendations fall under three headings: faster fibre permits, lending that accepts software assets as collateral, and incentives tied to high value-added exports.
Blind spot
The brief does not mention internet shutdowns or platform access restrictions, which bear directly on foreign clients' view of country risk; for a state-affiliated institute, that silence is telling. There is no comparison with rivals such as India and Bangladesh. The annual growth rate the $30 billion target would require is not calculated. Nor does it discuss how the foreign currency shortage affects the repatriation of IT earnings.
Talay assessment
Bottom line
Pakistan's IT exports are growing, at about $4.6 billion, but the growth rests on small transactions: freelancers account for 90.8% of entries and only 24.1% of value. That structure is fragile at a time when artificial intelligence is cheapening routine digital work. With fixed broadband stuck at 4.29 million subscribers, the $15 billion annual target looks distant; the most likely path is slow but continued growth.
Likely effects
- Pakistan's FX earningsUncertain1–6 months
Because IT services carry 46% of total services exports, continued growth eases external financing pressure; the small-transaction structure, however, leaves revenue price-sensitive.
- Freelancer incomesNegative6 months+
If median receipts keep sliding from $106 towards $63 and AI cheapens routine work, households dependent on IT income will see their earnings squeezed.
- Telecom infrastructureNegative1–6 months
The fibre coverage target is 60% and the 5G auction raised $509.6 million; unless right-of-way permits speed up, the shift to data-intensive services will be delayed.
Possibilities, ranked
- 1Slow growth, unchanged structure55%
IT exports keep rising but the freelance weighting persists; the $15 billion annual target stays out of reach.
Watch: SBP's monthly data on telecom, computer and information services exports
- 2Shift to enterprise exports25%
Fibre permits accelerate, banks accept software assets as collateral and software consultancy's share of exports rises.
Watch: PTA and provincial rules easing right-of-way permits
- 3AI erodes earnings20%
Routine digital work gets cheaper, freelancer receipts fall and export growth stalls.
Watch: Annual change in FX inflows under the technology freelancer category
Probabilities are calibrated judgement based on the sources, not measurement, and are revised as new information arrives. Not investment advice.
Original publication: issi.org.pk · 11 November 2026
This page summarises the institution's view and does not reflect the view of Talay Insight. No direct quotation is used.