IT Sector’s Contribution in GDP to Grow to 13% by 2025: MoITT

The Ministry of Information Technology and Telecommunication (MoITT) has estimated that the contribution of digital and information technology (IT) sectors to the Gross Domestic Product (GDP) will increase to 13 percent by 2025 as the scale of the digital economy expands sharply in the next five years.

Official documents of the ministry reveal that as the integration of digital technologies deepens in Pakistan, the scale of the digital economy will expand sharply in the next five years. The contribution of the digital economy to GDP will continue to grow in the coming years.

The contribution of the Information and Communication Technology (ICT) core industry to GDP will increase from 1.2 percent to 8.15 percent while the contribution of digital and IT sectors to GDP will increase from 2.7 percent to 13 percent.

Based on the available data, Pakistan’s digital economy is measured in two folds, i.e. ICT core industry and digital and IT sectors. In 2019, the contribution of the ICT core industry to the overall GDP was 1.2 percent. The contribution of the IT and Telecom sector to Pakistan’s GDP is 2.7 percent.

With the maturity of four enabling technologies—IoT, cloud computing, big data analytics, and AI—modern ICTs’ potential will be further realized to accelerate economic and social progress.

According to Huawei’s study, modern ICTs will lead to a digital economy valued at $23 trillion in 2025. It is predicted that there will be 100 billion connections by 2025, helping to drive digital transformation in domains including public utilities, transportation, manufacturing, healthcare, agriculture, and finance. By that time, 85 percent of enterprise applications will be on cloud, 86 percent of global companies will adopt AI, and data utilization rates will skyrocket to 80 percent. This means 180 billion terabytes of data will be generated every year, which in turn will act as a constant source of innovative intelligence and value creation.

ICT infrastructure and services are the foundation for countries to develop a digital economy and increase their overall economic well-being and competitiveness. They can help reduce poverty and hunger, boost health, create new jobs, mitigate climate change, improve energy efficiency, and make cities and communities sustainable.

Mobile continues to be the primary way in which many users access the internet in low and middle-income countries (LMICs). According to the Information Technology University (ITU), in 2019, mobile accounted for 87 percent of broadband connections in developing countries. Mobile devices and networks are increasingly driving economic growth, connecting people and businesses, and delivering public and private e-services in various sectors.

The mobile ecosystem in Pakistan plays an increasingly important role in economic growth, through its direct contribution to GDP and through driving productivity and efficiency gains across different sectors of the economy, it added.

Currently, 4G serves as the foundation of mobile broadband in most countries around the world, and its penetration rate is still growing. At the same time, the world is witnessing a transition from 4G to 5G.

According to the latest research of GSMA, in 2019, 4G for the first time accounted for more than 50 percent of mobile connections globally. 82 percent of the population in low and middle-income countries (LMICs) was covered by 4G, compared to 90 percent for 3G. It has taken LMICs around seven years to reach more than 80 percent coverage for 4G, compared to 10 years for 3G.

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