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AI Revolution: Pakistan’s path to economic growth

With a predicted Compound Annual Growth Rate (CAGR) of 25.26% from 2024 to 2030 and a forecasted market volume of US$772.50 million by the end of the decade, the AI market in Pakistan is on the edge of rapid growth. This article looks into the growing AI ecosystem in Pakistan, highlighting the opportunities and challenges it faces, and the potential it holds to become a significant player in the global AI market.
Government incentives, technological advancements, and innovative thinking are set to drive the AI industry in Pakistan to unprecedented growth rates. Leading academic institutions, including ITU, NUST, LUMS, PUCIT, and FAST, are at the forefront of addressing fundamental AI challenges and contributing to the global IT ecosystem.
The government plays a key role in the advancement of AI through initiatives such as the Pakistan Artificial Intelligence Initiative (PAII) and the Presidential Initiative for Artificial Intelligence and Computing (PIAIC). Alongside these initiatives, a regulatory framework focused on AI exists to ensure data protection and the ethical use of AI. Although a comprehensive national AI strategy is not yet in place, such a strategy could encompass promoting AI research and development, creating incentives for AI adoption across sectors, and supporting ethical deployment policies and data governance frameworks.
Motive (formerly KeepTruckin), a success story in the AI sector, showcases the benefits of AI applications in increasing productivity, safety, and efficiency in industries like trucking and construction. The talent pool in Pakistan is a significant driver behind such innovations.
AI is transforming traditional practices across various sectors in Pakistan. The technology is transforming hiring processes, predicting economic trends through satellite imagery analysis, and streamlining HR procedures for more effective recruitment. The potential of AI research to boost Pakistan’s GDP by $150 billion by 2030 underscores the significant economic impact AI has had on the US economy.
Despite the high potential, Pakistan’s AI industry is growing more slowly than necessary due to several factors, including the absence of a national AI policy, inadequate infrastructure (like reliable data centers, powerful computers, and fast internet connectivity), and a labor shortage. Addressing these issues requires deliberate investments in infrastructure, seed capital, regulatory frameworks, and workforce training.
AI’s impact on the labor market introduces both the risk of job displacement in industries susceptible to mechanization and new opportunities in AI-related fields. Industry, government, and academic institutions can collaborate to promote an environment those upskills individuals most at risk from mechanization. These partnerships focus on training and skill development.
By 2027, 23% of jobs are expected to change due to workplace evolutions, creating 69 million new jobs while eliminating 83 million. In Pakistan, the manufacturing, customer service, and agriculture sectors, which account for about 17% of all jobs, are the most affected by mechanization and AI.
Between 2014-15 and 2020-21, employment decreased in the manufacturing, wholesale retail, and agriculture sectors. Conversely, the real income of highly qualified technicians and professionals rose by almost 19% between 2018-19 and 2020-21, while real wages for service and sales staff, plant and machine operators, and craft workers decreased by 5% to 8%. Data science, AI development, and ethical AI governance are promising career paths requiring skills such as computer literacy, adaptability, and critical thinking.
It’s crucial to compare Pakistan’s current data protection regulations with international standards like the General Data Protection Regulation (GDPR) and assess the measures being taken to strengthen data security and privacy in light of AI advancements. Although the Pakistani Constitution of 1973 recognizes privacy as a fundamental right, the country lacks a unified national data protection law. The issue of privacy rights is also prominent in discussions on AI’s potential to collect personal data without consent.
As Pakistan adopts AI, it must consider both the benefits and challenges. Strategic initiatives can maximize AI’s potential and promote innovation, economic growth, and societal benefits by addressing concerns over job displacement and ethical AI usage. Beyond data protection, AI’s ethical risks, such as continuing social prejudices, dual-use hazards, and transparency in AI systems, and algorithmic bias, require careful consideration. Establishing ethical AI governance frameworks that adhere to international standards is vital as AI influences numerous industries. Promoting trustworthy AI that matches societal values demands cross-industry collaboration.
Encouraging international cooperation and Pakistan’s engagement in AI ethics and standards is essential for enhancing its position in the field. Through information sharing, collaborative research projects, and participation in global AI governance forums, Pakistan can become a significant force shaping the future of artificial intelligence.