September 6, 2024

Pakistan Has High Aspirations to Become a Digital Nation, Says GSMA Report

Over the course of my professional career, I had the opportunity to visit Pakistan a few times. Despite the security concerns that are prevalent throughout the South Asian country, I was routinely impressed by the strong desire Pakistanis had in utilizing life-enhancing digital technologies. It was, therefore, with great interest that I read a report published by the GSMA, UK-based organization that aims to unify the mobile ecosystem to discover, develop and deliver innovation foundational to positive business environments and societal change, that says Pakistan is poised to unlock its economic potential through accelerated digital transformation.

The report begins by noting how "Countries around the world and in Asia Pacific, including Pakistan, have stepped up efforts to become digital nations. This entails integrating digital technologies and services into every sector of the economy as a means of building resilient economies with finite resources and achieving sustainable and inclusive economic growth." GSMA Intelligence, the research arm of GSMA, has identified the following "five key components that must be in place for countries to realize their digital nation aspirations."
  1. Infrastructure: Foundation upon which digital services and applications are created, stored, distributed and consumed;
  2. Innovation: Ability to create and integrate new technologies to enable a variety of new solutions and use cases for the economy;
  3. Data Governance: High data governance standards, with efforts to become more transparent, participatory and accessible.
  4. Security: Advanced cybersecurity measures to help businesses to operate safely in a fully digital environment.
  5. People: Change in culture and personal behavior, and the right levels of digital literacy and skills to be able to navigate an evolving digital world.

As the report points out:
These components are interconnected and must be developed together to avoid potentially costly gaps and delays in the implementation of digitalization initiatives. For example, a lack of adequate infrastructure could offset efforts to support innovation, while a lack of trust due to poor data governance and security could delay the full use of infrastructure investments. It is important to note that developing the components of a digital nation collectively requires significant investments from both the public and private sectors, particularly for capital intensive projects, such as the deployment of next generation telecoms infrastructure, as well as enabling policies and regulations to ensure the sustainability of those investments.
With respect to assessing Pakistan's digital nation aspirations, the report explains that "Digital Pakistan is the flagship initiative of the government of Pakistan to expand the knowledge-based economy and spur socioeconomic growth using digital technologies. Launched in 2018, the overarching goal of the initiative is to promote connectivity, improve digital infrastructure, increase investments in digital skills, and promote innovation and tech entrepreneurship. Over the years, the government of Pakistan has introduced various policies and initiatives to support the realization of Digital Pakistan and, by extension, set the country on the path to becoming a digital nation."

The report contains a table that maps the contribution of these policies and initiatives to the development of the components of a digital nation in Pakistan. The content of the table is listed below.

1. Infrastructure: Pakistan is taking strides towards digital transformation with the approval of the Digital Nation Pakistan Act 2024. This legislation lays the groundwork for a digitally empowered nation by establishing two crucial bodies:
  • National Digital Commission: As the policy-making hub, this commission, chaired by the Prime Minister and comprising federal and provincial representatives
  • Pakistan Digital Authority: This operational arm will be responsible for translating the commission's policies into action.
While the potential benefits of this digital transformation are immense, challenges in infrastructure development must be addressed to ensure a successful transition.

2. Innovation: The government has been a driving force behind Pakistan’s startup ecosystem, with initiatives such as the Pakistan Startup Act and the establishment of incubators and accelerators across the country, providing an enabling environment for startups.

3. Data Governance:
  • The Prevention of Electronic Crimes Act 2016 is currently the primary legislation that provides a legal framework in relation to various kinds of electronic crimes and extends to unauthorized access to personal data.
  • After a four-year consultation period, the government is in the final stages of developing the Personal Data Protection Bill (introduced in 2021). The bill is anticipated to be presented to the cabinet for approval soon.
4. Security: The National Cyber Crime Policy 2021 was approved by parliament in July 2021. It provides objectives aimed at addressing cybersecurity challenges and risk factors prevalent in Pakistan.
Computer Emergency Response Teams (CERTs) have been established to address the emerging needs of security and safety with increased digitalization.

5. People: Much of the government's focus is on eliminating the digital skills barrier for unconnected populations. There is an opportunity to drive skills trainings at both the academic and professional development levels to create a digital-ready workforce.

The report's authors importantly note that "Despite these developments, current realities on the ground suggest that that the vision of Digital Pakistan may not be achieved, thereby slowing the country's progress towards becoming a digital nation. For example, Pakistan has witnessed rapid expansion in mobile broadband networks over the last decade, with 81% of the adult population now residing in areas covered by 3G or 4G networks, compared to just 15% in 2010, however, only 23% of the population currently subscribe to mobile internet services. This indicates a gap in actual usage versus availability and underlines the scale of the challenge to bring unconnected people online."

The report also emphasizes the importance of financial reforms and strategic initiatives. Recommendations include eliminating the 15% Advance Income Tax and the 19.5% sales tax on mobile services, addressing high spectrum prices, and introducing a smartphone financing policy to improve access to affordable devices. Additionally, the GSMA advocates for a rational approach to spectrum pricing ahead of the planned 5G spectrum auction in early 2025.

What are your thoughts about Pakistan's high aspirations to become a digital nation?

Aaron Rose is a board member, corporate advisor, and co-founder of great companies. He also serves as the editor of GT Perspectives, an online forum focused on turning perspective into opportunity.

September 1, 2024

Exploring Use Cases on How AI Delivers Impact in Africa

"AI holds immense potential to boost Africa's economy and to support the Sustainable Development Goals (SDGs) on the continent, says a report published by the GSMA, a UK-based organization that aims to unify the mobile ecosystem to discover, develop and deliver innovation foundational to positive business environments and societal change. With funding from the UK Foreign, Commonwealth and Development Office, the report's authors explain that "While AI is already being developed and deployed to support a range of use cases across African countries, little research has focused on building a body of evidence of AI use cases for development on the continent." They further explain that their "report is based on the analysis of over 90 use case applications identified in Kenya, Nigeria, and South Africa – which benefit from thriving tech ecosystems – across agriculture and food security, energy, and climate. While many AI use cases are relatively nascent, with some being deployed as part of projects or pilot schemes, a number of commercially viable solutions have also emerged. Often, AI is being incorporated into existing digital products and services, acting as an enabler to make digital solutions more relevant and efficient, amplify their impact, and facilitate scaling."

The report importantly points out that "The agritech sector is seeing most of the AI innovation, especially in Kenya and Nigeria where agriculture continues to play a significant role in the economy. AI is already being used for agricultural advisory, with companies like TomorrowNow and ThriveAgric providing farm-level insights to farmers, and for financial services with companies like Apollo Agriculture developing alternative credit assessment methods."

AI is also "being deployed in the energy sector, especially in Nigeria, where emerging technologies like Internet of Things (IoT) act as an entry point for advanced data analytics in smart energy management. Use cases such as energy access monitoring and productive use asset financing, developed by companies like Nithio, remain at a developing or nascent stage but present significant potential to reduce energy poverty. AI is also supporting climate use cases especially for biodiversity monitoring and wildlife protection in Kenya and South Africa, driven by large tech companies like Microsoft's AI for Good Lab and nonprofit organizations such as Rainforest Connection."

Regarding high-level recommendations, the report says different stakeholders – governments, development partners, development finance institutions (DFIs), non-governmental organizations (NGOs) and Civil Society Organizations (CSOs), large tech companies and startups, and research and academic institutions – "can take a number of actions and collaborate to ensure that impactful innovations in Africa can be deployed and scaled. This involves investing in domain-specific and local language data, adopting participatory approaches to data collection, unlocking access to existing data sources, and ensuring data privacy and security."

The report adds that "Strengthening baseline infrastructure and promoting renewable energy, providing hardware and cloud credits, enhancing edge computing capabilities and building institutional capacity will be essential to boost local compute capacity. In addition, fostering academic-industry collaboration, raising awareness and building capacity in the public sector will be essential to create a pipeline of AI talent while ensuring informed policymaking. To foster adoption and usage of AI-enabled services, enhancing digital skills among end users and integrating emerging skills like prompt-engineering into upskilling programs will be key, especially as generative AI solutions gradually grow in Africa."

Moreover, "Stakeholders across sectors can also focus on supporting the wider tech and AI ecosystem to foster an environment conducive to innovation and AI deployment across use cases. This involves engaging in partnerships to unlock access to critical resources for AI entrepreneurs and researchers, and to support the development of the AI ecosystem through data-sharing or infrastructure-sharing initiatives."

I concur with the authors that:
Adopting a consortium-based approach has the potential to help address the financing gap, while adopting innovative finance mechanisms can de-risk investments. Combining funding with technical assistance and go-to-market support can also help founders in their scaling journey. Increased R&D spending will be essential to support local research capacity, while local-global knowledge exchange can drive further momentum and raise awareness about local innovation. As countries work on developing national AI strategies, it will be critical to ensure a collaborative and inclusive process, to include principles for the ethical and safe use of AI, and to establish a clear roadmap for implementation. Policymakers can also consider rolling out regulations in a phased manner to allow innovation to flourish.
Do you agree with the recommendations on how different stakeholders can deploy and scale impactful AI innovations in Africa?

Aaron Rose is a board member, corporate advisor, and co-founder of great companies. He also serves as the editor of GT Perspectives, an online forum focused on turning perspective into opportunity.