by Dr. Iftikhar Ahmad
Pakistan has avenues with enormous potential for development. The IT sector is one of the promising sectors where SEZs (Special Economic Zones) have yet to emerge. An SEZ has been proposed to be set up in Islamabad under the CPEC-priority SEZs . Nevertheless, due to certain issues (firstly financial and secondly the non-availability of land), there has been no tangible progress on the federal SEZ. Still in the policy circles there are proposals that the federal SEZ should be an IT based SEZ. It is high time to look for viable alternatives to save infrastructural and land investments which might further delay the project given the financial crunch currently being experienced by the federal government.
Provided that the government brings necessary amendments to the SEZ Act, introduction of flexibility for IT based SEZs can bring positive business activities to the economy including job creation, enhanced productivity and forex earnings. IT SEZs have the potential to serve as catalysts for software development and IT solutions. Its domestic use can harness exportable surplus, especially if it could find inroads into the Chinese markets.
Once the government relaxes the area requirement (50 acres of land) for IT SEZs, the next step is to identify where an IT SEZ could be set up. We would need a well-connected, existing building/facility. Government finances would be saved as would hassle of facilitating any business entity envisioned in the SEZ Act. Software parks as well as universities appear to be best candidates for hosting federal IT-SEZ.
Higher Education Commission has set up incubation centers at various universities (such as NUCES-FAST, COMSATS, NUST, Bahria etc.). These provide new graduates with a dedicated space to work and get trained, straight after graduation. The same facility can be extended to IT graduates and professionals to establish new businesses as allowed at SEZ location. Stationing professionals at such facilities will provide the much-needed connectivity, as universities are well connected premises. Moreover, such a setting will ensure instant provision (and backup) of utilities and infrastructure facilities. They would also be places with regular stream of new talent in the form of fresh graduates.
The startups will get a relatively inexpensive, energetic workforce while youth (with fresh ideas) will get instant placements to refine and polish their skills. As far as the One-Window facilitation is concerned, the “Office of Research, Innovation and Commercialization (ORIC)” at selected universities can do the job by providing the necessary connectivity to all concerned. In addition, incubators currently based with Management Sciences faculties, will bring new opportunities for management graduates.
IT SEZs can involve and benefit from the experience of Pakistan Software Export Board (PSEB) and National Incubation Centre (NIC). Government can engage PSEB in marketing end products in domestic and foreign markets. Additionally, such a setting would also act as a bridge between academia and the industry. The IT SEZs, while looking for opportunities, are expected to engage with local and international industry (to market the products) and learn about industry needs, which ultimately will get communicated to academia (through ORIC) for getting in line with industries’ needs.
Although, there are ample incentives for the IT sector (100% equity ownership, 100% repatriation of capital and dividends, and income tax exemption for IT exports till June 2025), the IT SEZs at universities will bring additional benefits (highlighted above) and help streamline activities with national goals. In short, the said idea could be tested at federal universities initially, and if successful, the model could be adopted in other cities.
Keywords: SEZ, ICT Industry, Industry-Academia Linkages