Is Pakistan Ready for Digital Transformation? | Conversations@Jazz

Our next conversation is with a power panel of three key drivers from the start-up community, the technology and innovation sector and the government. Zulfiqar Hussain Bukhari, Special Assistant on Overseas Pakistanis and Human Resource Development, Parvez Abbasi, Project Director NIC, and Zouhair Khaliq, Co-Founder and Partner – TeamUp, joined us at the Graduation Ceremony of the 3^rd startup cohort at the National Incubation Center.

In this episode, the speakers discuss how start-ups help the country in bringing technology to the common people and how it contributes to the over-all socio-economic landscape. Bukhari explained how the government is committed towards digitalization and building capacity for local human resource. He shared the government’s vision and plan on encouraging talented overseas Pakistanis to come back to their homeland to prevent brain-drain. A veteran in the start-up sphere, Abbassi, shared how Jazz has contributed to Pakistan’s digital-startup ecosystem. Khaliq, the tech guru known for his leadership in the telecom and digital industry of Pakistan shares his views on the significance of platforms like the NIC and contributions of companies like Jazz that prove to be catalysts in bringing about the real change in Pakistan’s socio-economic landscape.

This conversation is a reassurance of Jazz’s commitment towards the digital universe. Jazz, along with its core business of being a digital company is also tapping into other areas that will boost the economic activity of Pakistan and create a culture of entrepreneurship and growth for start-ups.

 

Aisha Sarwari: Thank you for being here with us today. This is Aisha Sarwari, Head of Communications and Sustainability at Jazz. We are here with three special guests. We are here to talk about the celebration which we had regarding 2^nd cohort of the NIC graduating. These are about 20 startups that have graduated and are ready to launch their products. We have already done your introductions before this so we’ll directly start off by Mr. Zulfi. Tell us what the government is doing to make sure that Pakistan’s digital ecosystem is not restrictive but enabling?

Zulfiqar Bukhari: First of all, Pakistan system at the moment, you have to understand where are we starting from. We are newly formed government. We are trying to create policies which were never there before. First and foremost, we need to fix our own house. This is the first time that the PM has given the directives where he wants entire government, all the ministries and the departments to be running on e-governance. It is very important in, when you see countries abroad, they have a lot of support from government departments. Because those government departments are usually working within IT sector.

Aisha Sarwari: We have also digitalized layers before. So, we are ahead.

Zulfiqar Bukhari: Correct. They even get it before when it comes to open market. But that is not the case with Pakistan and other developing countries. In order for us to get on board and help, we need to train our own people. Having said that we want to push the IT sector, aggressively. Within 100-days, the IT ministry is coming up with several plans. But one of the main one is to go into e-governance.

Aisha Sarwari: Mr. Zouhair if I can ask you, I do not know whether you have read the book Sapiens by the author Yuval Noah Harari.

Zouhair Khaliq: I have it on my bookshelf. But haven’t read it.

Aisha Sarwari: I am assuming you are doing the stuff that he’s telling in the book. So, recently there’s a New York Times article today that talks about how the author said that techies are separatists. Because they not only disrupt but they take power from the elite and spread it across. The 20 young startups that have graduated today, do you think they are at that level. Are they disruptors? Are they separatists? Do they have the ability to challenge the status quo?

Zouhair Khaliq: I do believe that they do. A lot of the technology that we come across here today in Pakistan is not necessarily rocket science. It is not breaking the frontiers of science, in any shape or form. But what they all are doing is introducing technology to Pakistan which hasn’t been there before. Years before there was a whole explosion in the ownership of mobile phones for everybody. And we are at a tremendous figure, 160 million people own a mobile phone somehow or the other. So, these young people are really just enabling technology in many fields whether it is to enable people at home or in living. We are looking at people who are doing e-commerce. We are looking at people who are doing robotics. But in the Pakistan’s context, we are coming a long way. Because suddenly you have people who have access to technology. They have access to building a business and the knowledge behind it. And they are going out into the rest of the country now. To not only proliferate that technology but also offer jobs to other people and create new jobs. I think, they are going to have huge impact on the social scene as well. It will impact the way other people do their businesses. All of this is going to be very exciting in the future.

Aisha Sarwari: If I understand you correctly the answer to that is no. They are not exactly separatists which is a very advance level thing and we are just at the starting point.

Zouhair Khaliq: We are at the starting point. And probably at this point, they are going to be seen as people who are inclusive. Inclusive of the population around us. Bringing a lot of other people onto the technological platform. And also enabling an average customer to participate in something that he hasn’t been doing.

Aisha Sarwari: And to improve the capacity.

Zouhair Khaliq: Absolutely.

Aisha Sarwari: Mr. Parvez, I will come to you and ask. This is a very unique place where we are sitting. Behind you is the first, second, third and the fourth revolution in terms of industrial growth. Would you think that this is a success where government and two private sector organizations come together, and they are building something together? Have you got adequate support from the government, from private sector and from the academia as well?

Parvez Abbassi: For me, obviously, I have vested interest and biased. But if you take feedback from the people who visited today and from the people who have visited over the past couple of years, we had nothing but positive feedback. Not only for the physical ambiance and the environment that we have created but also for the curriculum and some of the startups that we have helped to graduate. As, I mentioned earlier today, if you look at the return on the investment, this is a government building. It’s managed and developed by support of the government. And remember, this building was empty for 8 years prior to us taking it over.

Aisha Sarwari: And it is thriving. It looks like the Silicon Valley really, especially with that foosball.

Parvez Abbassi: It was thriving before, but we had cockroaches and rats at that time. But the point I am trying to make is that through public-private partnerships and if you have right kind of environment where you can come up with the right players. You can create these types of environments. As, I mentioned in my talks earlier, it is not just the physical environment. It is the curriculum that we have managed to develop. The induction process etc.

Aisha Sarwari: It really is about the process because anyone can replicate the ABCs. It is really about following the SOPs, monitoring and quality assurance, etc.

Parvez Abbassi: Absolutely. And also, access to the right kind of mentors. For example, as Jazz is our partner so we have access to their mentors, their staff and team members who have decades of work experience. Be it domain experts in IT or in marketing and finance etc. So, I think this is a unique kind of environment. It’s been successful and hence, it’s being replicated in other markets. We just need much more of them because the size of our country.

Aisha Sarwari: So, the brief answer is yes. It is a successful model and we are taking it forward across Pakistan. But we won’t be able to do it without government’s support. Private sector, on its own, in a vacuum does not create any change. Mr. Zulfiqar, can you shed light on the fact that your government’s mandate was anti-corruption. But economists say that the cost of incompetence is far greater than any corruption cost. Particularly, that is something that goes along with developing countries. How are you measuring the cost of incompetence? And what that is about the surge of people that are at the helm of affairs, who might not have the understanding of disruptive technology? So, how are you catering to capacity building of the institutions?

Zulfiqar Bukhari: I will break it down into two questions. To your first question, I do not know who the economist was but incompetence is also created by corruption. Incompetence comes but when you have the system where there is checks and balances, incompetence can’t stay for long, because it falls behind. The only time it does is when there is not financial corruption but also moral and academic corruption. All these things are combined when you talk about the corruption. Corruption actually brings incompetency along. It is very rare that I have seen a non-corrupt state but also completely noncompetent. It is a rare example, I haven’t seen one. So, corruption brings it about. Tightening the screws on corruption is not only financial. It’s also when you are going through entire bureaucracy. It is politicized. Politicization is also a form of corruption. So, we have to see which person is in which department that has been there due to his links and has nothing to do with merit. Hence, incompetence is created. So, they go hand in hand. Coming on to your second question which was, what are we doing to…

Aisha Sarwari: … capacity building. For example, if bureaucracy is the beast in every nation. It is very difficult to create change because it is very large. How are you training the people who are already there and who are unlikely to move?

Zulfiqar Bukhari: Just today, in the cabinet, we were told by the IT minister that in order to get the right e-governance system in, we need to train 3000 to 4000 boys and girls trained to run this e-governance system for the entire country. At the same time, your capacity building will come when you start picking up people in the right areas with merit. Then you have trickledown effect. At the same time, what we are trying to do is to send them to right universities so that they get the right courses. Then again, we had people who had gone abroad and took courses that had nothing to do with their actual work. So, we are training them right by increasing their level of capacity in our schools. We’ve had schools that were dormant. Skill schools, that come under education ministry, are skilling people to become better, in the country and those who we wanted to send abroad. A study shows that when a skilled labor comes back from abroad and starts working here, he skills 10-12 people underneath him. So, it’s important that we send them to get skilled and then they get further experience. I think the government, at the moment, is trying to take the policy of merit and also what we are doing, we are doing our public service’s policy which is to give them security. So, we are still debating whether it should be one or three years on government jobs which gives them security in that position.

Aisha Sarwari: World over the government jobs are becoming contractual because they are realizing that security should be tied to competence and ability to perform. But I agree. It’s a give and take. It is a challenge.

Zulfiqar Bukhari: But the problem is that there is no metric to show competence as such.

Aisha Sarwari: So, your plan is to bring e-governance, measure it and then bring policy change.

Zulfiqar Bukhari: No, first thing is to bring the policy change. E-governance is coming through IT ministry. The first thing is to bring in the right policies. I disagree. We had a long meeting even today. I completely disagree with bringing in a tenure policy that you are talking about. I think that is irrelevant. I think that should come right at the end. First, we need to see the policy making. The right pay packages. There are a lot of bureaucrats that are hardworking are burnt out. They are working 16 to 18 hours a day on not a very good pay package. They have got two kids. Obviously, they are 20, 21 grade officers. They want to send their kids to other places, and they do not have the right package. So, you are creating an environment for them to do other things. So, I think the tenure, let it be contractual or permanent, these things are minute that come right at the end after your policymaking.

Aisha Sarwari: But you are definitely basing those policies on the data.

Zulfiqar Bukhari: Yes, we have to. The world is at a place where you have to know.

Aisha Sarwari: So, Mr. Zouhair you are one of the pioneers of the tech in Pakistan. Ten years ago, you were a name synonymous with the phone. We are at 113 out of 127 in innovation index which is very down with most of the war-torn countries. We are a functional democracy. Why are we so low?

Zouhair Khaliq: I think we have a lot of catch up to do. We lost few years in the middle somewhere where there wasn’t enough focus on this. But in the last 3 to 4 years, you have seen that we are regrouping. The National Incubation Centre is an excellent example of that. As a result, there was replications in other four provincial capitals as well. There are several others which are privately run. We are catching up. But yes, it is not a nice number to have it.

Aisha Sarwari: But the regional averages are much better. Their poverty rates are lower, but their innovation rates are higher. So, it’s not infrastructure, it’s not money but something else. What is that something else that we are lacking?

Zouhair Khaliq: Part of it is just the basic curriculum at school which doesn’t prepare young people to go into this particular field and innovate. A lot of it also has to do with, and something that I will talk about more later is incentivization, the tax regime itself, the ability of freelancers to export software and get paid for it. Some of these issues are very common. Everybody knows about them and there is a lot of discussion going on at this point. But I think we need to change all of this very quickly. We have no dearth of talent, I can assure you that. I have realized that, and I am sure Parvez would agree on that. I have been in and out of this technology business for 27 years. A lot of it is in Pakistan and some of it we see in other countries as well. One gets a chance to compare. I can tell you this that we have amazing talent. We have the skill sets. We just need to provide them the platforms and some changes in the legislation, taxation and so on which would spur rapid growth very quickly.

Aisha Sarwari: So, you are hopeful.

Zouhair Khaliq: Always.

Aisha Sarwari: Mr. Parvez, one more question before we move to the last round, as I realize you have limited time. What’s the one thing that you would change in this entire digital ecosystem? If you had a magic wand and you want to bring about few changes: would it be a person, or would it be an infrastructure policy? What would be that magic bullet?

Parvez Abbassi: If we had to fire a bullet at somebody, I cannot obviously take their name here but that would be a good start. Having said that, I think policymaking is very important. I will give this government the credit that they already have set a task force. And, I happened to read the names of the task force and it was very reassuring that they have the people who are experts, have proven track record and are apolitical. So, I am very optimistic that we are moving in the right direction. One thing that I want to touch upon is that if you look at Pakistanis, who have moved abroad, are very successful. We had Ashar Aziz from FireEye Sky Electric this morning and he shared his journey. He started his journey from Islamabad, then went to MIT, became a billionaire and came back to Islamabad, Pakistan. So, what is that makes him successful? This is a very critical question that we are looking at. There are two factors, as far as I am concerned, that makes him successful. One is that Pakistanis are generally creative and hardworking. But the second most important thing is that, abroad gives them ecosystem and environment to maximize their talent. NIC is an oasis that is trying to create same environment for them so that we can hopefully replicate those successes. The more we try to create such environment, I believe, we are going to have more of those successes. Success breads more success.

Aisha Sarwari: Once you create a cohort, they go from there. Mr. Zulfi, the task force that Mr. Parvez mentioned has one woman. You didn’t find others?

Zulfiqar Bukhari: Which taskforce? There are many taskforces.

Aisha Sarwari: The IT taskforce.

Zulfiqar Bukhari: You know I am not the IT minister.

Aisha Sarwari: I understand. But since you are a government representative.

Zulfiqar Bukhari: I am for overseas. It is unfortunate that there is only one woman.

Aisha Sarwari: Is there? I am pretty sure there are others, one woman added to the list.

Zulfiqar Bukhari: I do not know even know who is on the taskforce.

Aisha Sarwari: Jahanara, it is.

Zulfiqar Bukhari: And there is only one female? Look I am not aware of whether there is only female or two.

Aisha Sarwari: But just your stance on that.

Zulfiqar Bukhari: Personally, I think if you are making a taskforce, you are just need the best. If it’s all women, then it’s all women. If it’s all men, then it’s all men. If it is a mixture, then it is a mixture. I am not an expert on how many women are very tech savvy in Pakistan. I do not know if it’s one or it’s thousand. I do not know. So, I can’t comment on it really.

Aisha Sarwari: So, when you talk about tech, you talk about failure. A lot of CEOs start off with oh let us celebrates failure. But when people fail, they are really punished for that. What is the government doing in your ministry or something that you are introducing or in something that you have directions from Prime Minister that says that it is okay to fail if you are creating change? Is there any example that you can particularly share with us particularly with tech?

Zulfiqar Bukhari: No. I do not have tech example. I have invested a lot in tech.

Aisha Sarwari: So, personal example is fine.

Zulfiqar Bukhari: A lot of investments have failed as well. I did mention it in the speech, but you just ridiculed it now by saying that a lot of successful people talk about their failures first. But it is the truth. I mean it really is.

Aisha Sarwari: Did you penalize someone for the failures, is my question?

Zulfiqar Bukhari: Look the penalization always go towards the leader. It is always the case. There are people below you who follow you. The leader has to take the success, he has to take the failure as well. So, if I am running a department, my Prime Minister at least did say to me that it may not go according to the plan. I wanted to do a thousand initiatives. Some of them fail, at the end of the day even if you have given it all and done everything right. And at the end you learn from it. Yesterday, we just launched an initiative called Calling Naya Pakistan. It is the first digital data base where all the top people sitting abroad can send in their resumes. And, we get it stored. And what we do is that we take those resumes. We have already accepted 30 resumes and forwarded them to the other departments and we’ve forwarded their resumes to other departments, let’s say energy, petroleum or whatever. We see that if the guy has a good CV then we forward it. So, we are taking ownership of them. Secondly, we are giving them a data base where they can come to and we also get to enrich ourselves with that talent. So that is one initiative. There is one much harder initiative that we are trying is Invest Pakistan, which is going abroad and getting high profile guys to come back an create a Silicon Valley for us and do something.

Aisha Sarwari: And they want to do that.

Zulfiqar Bukhari: And they want to. Now, what can happen is that Manmohan Singh tried this in India where he went big and wanted NRIs to come back. When they came back, there was too much of red tapism and there weren’t enough jobs. So, it was a big failure. And it went a massive thing against him in the next elections. Now, that can happen, and people can use this example. But the point is that he tried. There was a bureaucracy and system within a system that was running in India and he failed at it. But he gave it his all. Now, we might all fail. The BOI may fail in doing it. But the fact is what do we do? Sit hand in hand idle or we keep on trying? The point is that we have five years. By the grace of God, we have a Prime Minister for the first time, where the oversees wants to get engaged, come in and start a new initiative. Young people want to come in and start new initiatives, new techs, startups and everything. I may be biased, but I think they are more comfortable and enthusiastic about it now, then ever. So, we need to cash on that.

Aisha Sarwari: I have been an oversees Pakistani myself. And I think one thing is that money flows where credibility is. When one has a stellar record, people want to be there. Consistency of policy, I think is very important.

Zulfiqar Bukhari: It is. Just to give you one small example. I was talking to Mr. Pervaz on the way that if you had NIC or something like this, in some other country, I would invest my money here and say that let me diverse the risk. Let me give you x amount over here and put it over 20 different startups. Let me get hit with one of them and recover my money and make a lot more. This is quite appealing to a lot of people abroad. I think if we brand it and just promote it, we will do it right.

Aisha Sarwari: Especially for the mentorship part that we do. Mr. Parvez your last words on the things that you would want in 2019 for the NIC to be?

Parvez Abbassi: I think, it’s full steam ahead. We are fortunate enough to build a base. Now, we need to continue that growth. I think with the new vision and new government, especially the oversees Pakistanis, it is not just their money. It is their intellect that they bring to Pakistan.

Aisha Sarwari: And their time…

Parvez Abbassi: And their time. But also, there is good return on their investment. Things are not working well in U.S. Brexit is happening in Europe. So, there is a lot of uncertainty.

Aisha Sarwari: A lot of opportunity for the brown people.

Parvez Abbassi: But also, for your money as well. I often say this that Pakistan is the center of the next half of the population of the world, China, India and Iran etc. So, there is good opportunity to invest. What I would like to suggest to the government is to try to create an ecosystem and environment to facilitate and reduce that red-tape. Make it easier for the people. People who have already successfully done that journey, maybe they could be engaged in some sort of the taskforce. To ask how did you do it? What do you recommend etc.

Aisha Sarwari: Mr. Zouhair, your comments on domestic investors. Are the domestic investors happy in Pakistan? Because people always talk about bring stuff in from outside. There is no dearth of amazing entrepreneurship and money here. Are they happy?

Zouhair Khaliq: Depends on what you mean by happy. A lot of domestic investors are not yet attuned to investing in startups or new technology, for example. There are much easier ways to double the money.

Aisha Sarwari: Land.

Zouhair Khaliq: Land for example.

Aisha Sarwari: Speculative investments

Zouhair Khaliq: Yes. And stock exchange for an example. But again, attitudes are changing. I think. I talk to a lot of people and they get very excited with the new technology coming up when they meet some of our startups. They are very pleasantly surprised. There are so many now who are saying that show me a way to do this. And this is one of the things that we will work on is to build on venture capital fund in 2019. And hopefully, build it in a way that domestic investors will have the confidence to come in and say that I want to be a part of this. And say that yes this might not double my money this year but what it would have social impact and get substantial revenue in one, two or five years. So, that’s what are looking to do.

Aisha Sarwari: And social impact. You are making a change in place that needs it.

Zouhair Khaliq: Oh absolutely. Look there are obviously particular startups in National Incubation Centre here which are focused on social impact. But my argument is that any technology or the startups they you bring in Pakistan at the moment, is going to have a social impact. Because ten to fifteen years from ago, the ability to own the mobile phone itself created social impact. It changed the way people did the business. It changed their lives. I think that is going to happen again in next couple of years. But I am excited about it and it keep me going.

Aisha Sarwari: Mr. Zouhair, Mr. Zulfiqar and Mr. Parvez, thank you so much for being here today. And on the behalf of the 20 people who graduated today, congratulations on changing Pakistan for the better.