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Will AI Multiply Pakistan’s Software Services Economy or Force Pakistan to Move Beyond It? — M S Bajwa on Aura
Pakistan’s technology sector has earned the right to be optimistic.
In FY2025–26, the country’s technology exports reached a record $4.6 billion, up roughly 21% year over year. The sector generated an estimated $3.9 billion trade surplus, while freelancers continued to bring substantial foreign earnings into the country.
At the same time, something much larger is happening.
Artificial intelligence is changing the economics of software itself.
The same tools that can make a Pakistani engineer, freelancer or software company dramatically more productive can also make their customers more productive. Tasks that once required teams can increasingly be performed by individuals. Work that once took weeks can sometimes be compressed into days or hours.
That creates an extraordinary opportunity for Pakistan.
It also creates an uncomfortable question:
Will AI multiply Pakistan’s software-services economy — or eventually force Pakistan to move beyond the model that made it successful?
The answer may be both.
Pakistan has already accomplished something important
It would be a mistake to begin this conversation by dismissing outsourcing, freelancing or software services.
They have been one of Pakistan’s genuine economic successes.
The Pakistan Business Council’s recent study of the sector found that computer-services exports increased from $1.67 billion in FY2021 to $3.24 billion in FY2025, while the broader ICT sector reached $3.81 billion that year. ICT represented about 45% of Pakistan’s services exports.
Freelancing did something particularly important.
It reduced geography as a barrier between Pakistani talent and global demand.
A young developer in Lahore, Karachi, Islamabad, Faisalabad, Peshawar or a much smaller city no longer necessarily needed a multinational employer between their skills and an overseas customer.
That is not a small achievement.
It created income. It created experience. It exposed Pakistani professionals to global customers and standards. And it demonstrated that intellectual and technical work could itself become an export.
Pakistan should build upon that foundation—not talk itself out of it.
But foundations are supposed to support what comes next.
AI is changing the value of an hour
There is a statistic in the Pakistan Business Council’s research that deserves considerably more attention.
Between FY2021 and FY2025, total freelance exports increased strongly.
Yet the median value of an individual freelance transaction fell by 41% — from $106 to $63.
In FY2025, freelance transactions represented 90.8% of recorded IT-export transactions but only 24.1% of their total value.
That does not establish that AI caused the decline.
But PBC identifies AI-driven commoditization as one of the structural pressures facing precisely the service categories in which Pakistan is heavily concentrated. Its assessment is particularly important because it draws on transaction-level State Bank data alongside industry surveys and stakeholder research.
And the underlying economic question is straightforward.
Imagine a Pakistani software company whose competitive advantage is:
We can supply ten capable engineers at a substantially lower cost than a company in the United States or Europe.
AI may make those ten engineers far more productive.
Excellent.
But AI is also available to the customer in the United States or Europe.
Perhaps that customer now needs six engineers instead of ten.
Perhaps a Pakistani team that previously required ten engineers can accomplish the same outcome with four.
Perhaps entirely new categories of work appear.
Perhaps some existing work disappears.
Nobody can responsibly predict those ratios with certainty.
But one conclusion seems increasingly difficult to avoid:
Competing primarily on the price of human technical hours becomes more vulnerable when technology continuously reduces the number of human hours required.
We are experiencing another side of this ourselves
At Aura Platform, this question is not entirely theoretical for us.
We are building a technology company under constraints.
We do not have unlimited capital.
We do not have thousands of engineers.
We encounter infrastructure limitations. Access to compute is not always uniform. A provider that works for one capability may not work for another. Technical approaches fail. Infrastructure has to be replaced. Experiments sometimes produce nothing useful. And scarce resources have to be allocated carefully.
We have experienced this very recently while working across AI, cloud infrastructure, realtime communication, media and production systems.
Sometimes the constraint is money.
Sometimes it is compute.
Sometimes it is infrastructure availability.
Sometimes the technology simply does not work as expected.
So we diagnose it, change the architecture, change the provider when necessary, build the missing capability ourselves when appropriate, and continue.
There is nothing glamorous about that process.
But it has taught us something important about the present technological moment:
AI has not eliminated the constraints facing small companies. It has changed how much a small company can accomplish inside those constraints.
That distinction matters enormously for countries like Pakistan.
The distance between ambition and resources is shrinking
Twenty years ago, building certain categories of serious technology required extraordinary upfront resources.
You needed larger engineering organizations.
You needed infrastructure.
You needed specialized expertise across many disciplines.
You often needed significant capital before you could even determine whether an idea worked.
Cloud computing changed part of that equation.
Open-source software changed another part.
Global digital distribution changed another.
And now AI is changing it again.
A small team can use sophisticated models without training them.
Engineers can work across larger portions of the software stack.
Founders can test ideas much faster.
Companies can rent infrastructure for minutes or hours rather than purchase it.
A capability that fails can sometimes be replaced by another provider without rebuilding the entire product.
AI agents can increasingly assist with engineering, analysis, testing, operations and creative production.
None of this makes building a company easy.
It makes previously unaffordable ambition more accessible.
And that may be one of AI’s most consequential economic effects for emerging technology ecosystems.
Pakistan is preparing millions of people for AI
Pakistan clearly recognizes the opportunity.
The country’s National AI Policy calls for expanded AI infrastructure, Centres of Excellence and distributed access to high-performance computing. Pakistan subsequently adopted the Islamabad AI Declaration, establishing a “private sector led, government enabled” approach emphasizing domestic capability, governance and sovereignty.
The government has announced a goal of training one million AI professionals by 2030, alongside 10,000 trainers and educators, AI education from school through university, Centres of Excellence and stronger university-industry collaboration.
And the momentum has accelerated.
https://auraplatform.org/p/art/will-ai-multiply-pakistan-s-software-services-economy-or-for · Aura, public conversation that keeps its context