“There is an immense scope in technical education for we want technically qualified people very badly. You can learn banking, commerce, trade, law, etc which provide so many opportunities now. Already you find that new industries are being started, new banks, new insurance companies, new commercial firms are opening and they will grow as you go on. Now, these are avenues and fields open to you. Think of them and divert your attention to them, and believe me, you will thereby benefit yourselves more than by merely going in for government service and remaining there, what I should say, the circle of the clerkship, working there from morning till evening, in most dingy and uncomfortable conditions. You will be far more happy and far more prosperous with far more opportunities to rise if you take to commerce and industry and will thus be helping not only yourselves but also your state.”
- Mr. Jinnah / Quaid-e-Azam
- Speech: The Role of Students in Nation Building
- Context: Dacca University Convocation
Government service may provide prestige in limited Pakistani circles but it is not an outlet for economic endeavors that solve hard problems, subsequently create value and generate wealth.
Hard problems can be solved by applying human intellect aided by tools. Tools augment human ability to solve problems by at least an order of magnitude.
We can think of tools in the context of technological waves. Pakistan is a largely agro-based and semi-industrial economy and has not experienced the full effects of the post-industrial waves of innovation, which means there is an incredible opportunity that is up for grabs.
The information superhighway and the world wide web that provides access to any information from our personal computer, acted as a great equalizer, ushered in ecommerce and disrupted traditional brick and mortar businesses.
The Internet caused a great advance in financial payment processing, web development, social media, digital marketing, data, analytics and various other areas. This meant that many companies positioned themselves as an “internet company” to raise capital and create value.
However, Pakistan experienced the internet wave in the form of entertainment, content and consumption but ecommerce did not fully take root in the late 90s and early 2000s because of limited internet connectivity infrastructure and barriers against financial payment processing on the internet.
The common man remained largely oblivious to the internet because desktop and computers had not been democratized to the general public yet due to pricing, affordability and technical know-how.
In 2008, when Steve Jobs introduced the iPhone, the next wave started. It didn’t matter if you were an internet company like Google or Facebook, it mattered if you were a mobile company like Uber and Snapchat. Steve Jobs changed the game as iPhones had significantly stronger computing power than Apollo 11 guidance computers responsible for humanity’s first moon landing, which represented “one small step for a man, one giant leap for mankind”. Moore’s law helps us understand this better, Gordon Moore in 1965 observed that the number of transistors that could be crammed onto the surface of a silicon chip appeared to double each year. Today, Moore’s Law no longer refers specifically to transistor density, rather it predicts that computing power tends to double every eighteen months. It appears that the true limit to Moore’s law is human engineering ingenuity, not solid-state physics.
Smartphones were rapidly distributed across the globe and they also landed in the hands of the common man in Pakistan thanks to cheap second-hand Chinese handsets and widely available 3G/4G networks. 51% of mobile subscribers in Pakistan are using smartphones as of 2021 and Pakistan has the 4th largest smartphone user base in the region and 18th largest smartphone user base globally.
Pakistan has barely harnessed this wave as traditional businesses haven’t fully perceived the opportunity at hand and, majority of our online users are poor and barely literate. Very few use any other apps than Whatsapp (100%) and Facebook (60%). For the common Pakistani, there is a language and user interface barrier, understanding the interface jargon is definitely a source of friction. Primary mode of online communication is through voice notes on Whatsapp followed by Urdu messages. The existing ecommerce businesses have focused on the upper middle class that thinks, speaks and reads in English, and this has generated +$4Bn in annual ecommerce sales. Read more here: The Fortune at the Bottom of the Digital Pyramid
There’s incredible opportunity to leverage the "mobile-first" wave and create apps that are easy-to-use for the average Pakistani citizen and which will also build ecosystems for traditional businesses to leverage and accelerate a national digital transformation. For example, China is both a large and a fast-growing retail market - worth about $5 trillion in 2020 - and highly digitized. Much of China’s retail growth can be attributed to “super-apps” which have created ecosystems that provide users with a single point of entry. For most digital retail consumers in China the first port of call is Taobao (Alibaba’s mobile C2C portal) or Alipay, both of which give access to Alibaba’s full ecosystem. Alipay, which is on almost every smartphone in China, integrates the platforms and service offerings of companies in Alibaba’s huge retail network, enabling consumers to pay for any product or service they may find there, from Nike shoes to wealth management.
The Internet and mobile have led to a data explosion. There’s been a tremendous growth in the amount of data generated by online activity. Google gets over 3.5 billion searches daily, WhatsApp users exchange up to 65 billion messages daily and in 2020, every person generated 1.7 megabytes per second.
There has also been tremendous growth in compute power. Graphics cards and graphical processing units (GPUs) were originally developed to do fast graphics rendering for computer games. The distinctive feature of GPUs is that they can carry out fast matrix multiplications. However, matrix multiplications are useful not only for graphics rendering but also for machine learning.
Machine learning can be thought of as a training algorithm that can identify useful patterns by ingesting enormous amounts of data and create a model that can be used to infer learnings and make predictions from future real-time data. Artificial Intelligence* is transformational because it creates a positive feedback loop on how we as humans can make better decisions and this compounds the accuracy of our predictions which enables us to solve problems in a cheaper, faster and more scalable way.
The building blocks of AI in terms of computing, infrastructure and algorithms have been already established by Google, Nvidia and Amazon. Pakistan can benefit from the AI wave by focusing on its application in disrupting agriculture, healthcare, manufacturing and textile industries.
The main challenge in Pakistan to take full advantage of the AI wave is to digitize the data that is currently captured on hard paper to a structured digital format that is stored in the cloud. For example, cotton textile production is Pakistan’s largest industry that accounts for 4% of GDP and 66% of exports. AI can access and collect historical and real-time operational data, providing insights that can improve operational efficiency, this means massive productivity gains can be generated if Pakistan focuses on the artificial intelligence wave.
Software-enabled companies are the future and have started to dominate industries outside of traditional high tech. Software is eating the world as even industries that focus on physical products (atoms) are integrating with software (bits). Tesla makes cars (atoms), but a software update (bits) can upgrade the acceleration of those cars and add an autopilot overnight. The spread of software in every industry is accelerating change faster than previously thought possible. Not only is the world moving faster, but the speed at which major new technology platforms are being created is reducing the downtime between the arrivals of each wave of innovation.
Today, multiple major waves seem to be arriving simultaneously, technologies like the cloud, AI, AR/VR. The new wave of Web3 is upon us where big tech companies are no longer the main guardians of the web’s data, but rather blockchain tech enables data to be controlled and hosted collectively by users. In other words, apps built on the blockchain — like a social network, marketplace, or search engine — will enable users to participate, transact, and create without the need for an intermediary as in Web 2.0. In some visions of Web3, the online experience will also be fundamentally different thanks to AI, which will make interactions between users and machines richer and faster. The Web3 movement has gained traction amid the rise of crypto and other key Web3 concepts like NFTs, DAOs, and DeFi.
The citizens of Pakistan are well positioned to create incredible amounts of value over the next couple of decades by solving nation’s hardest problems related to human capital development, energy, climate change, education, healthcare and agriculture. There are clear “first-scaler” advantages and the Pakistani market is up for grabs for the bold and innovative Pakistani entrepreneurs, it is time to hustle.
* AI poses larger philosophical questions, which are not the scope of this article, but we would like to briefly touch upon them: AI accesses reality different from the way humans access it. AI powered technology will become a permanent companion in perceiving and processing information. It will alter our experience as reasoning beings and permanently change our relationship with reality. How will AI's evolution affect human perception, cognition, and interaction? What will AI's impact be on our culture, our concept of humanity, and, in the end, our history?
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