Business Process Outsourcing Sector to Earn Over $1 Billion Revenue By 2029: PSEB

Pakistan’s Business Process Outsourcing (BPO) sector maintained stable growth with its revenues expected to show an annual growth rate (CAGR 2024-2029) of 6.23 percent, resulting in a market volume increase of $1.15 billion by 2029. According to the BPO sector study released by the Pakistan Software Exports Board (PSEB), the country’s market is projected to reach $0.85 billion in 2024 with prevailing challenges and issues. BPO services in Pakistan are offered by both domestic companies and foreign firms, including joint ventures. Most Pakistani BPO companies are relatively small, typically employing around 5 to 25 people, and are exclusively focused on providing BPO services. Of the large players, few are pure BPO operators, and the rest are primarily large IT firms with a BPO vertical. Most of the existing players operate in the middle segment (BPO) of the value pyramid. As per the government’s recent BPO strategy, the objective over the next five years is to grow not only this segment but also the knowledge process outsourcing (KPO) segment in the next five years. BPO Growth Potential in Pakistan Pakistan’s BPO industry has achieved considerable growth in recent years. Kearney’s 2023 Global Services Location Index, Pakistan has emerged as the most financially attractive destination for IT outsourcing. The International Labor Organization (ILO) ranks Pakistan as the second-largest supplier of digital labor services. The latter include clerical and data entry services, creative and multi-media services, professional services, sales and marketing support services, software development and technology services, and writing and translation services. With an English-speaking IT BPO workforce of 500,000 or more within a pool of 132 million aged below 29 years, Pakistan can look at investing in upskilling or ‘new skilling’ at least 0.1 percent of the workforce. This can create a generation competent in key emerging technologies that will inevitably be incorporated into the global value chains. A shift of focus to upskill and equip the workforce will enable the IT/BPO industry to thrive in the upcoming growth years. Growth is particularly impressive in the technology sector. Though specific numbers aren’t available, the export of IT and Telecom services can serve as a good proxy and show that momentum is picking up. Pakistan’s overall IT sector export proceeds have been on a steep upward trajectory, clocking an impressive $286.395 million in the first month of fiscal year 2024-25, a growth of 33.84 percent compared to the same period last month. Computer services surged by 44.14 percent and software consultancy services by 47.38 percent. Call center service exports increased by 33.61 percent during the month, from $15.993 million to $21.367 million. Beyond IT too, there exists an immense opportunity to offer offshore services. For example, Pakistan’s footprint in “other business services” – which includes research and development, management consulting, accounting, and advertising. The Business Process Outsourcing Sector Strategy for Pakistan (2023-2027), developed by Pakistan’s Ministry of Commerce and the Trade Development Authority, outlines a roadmap to position Pakistan globally as a competitive BPO services provider. The stakeholders recommended ensuring measures for sustainable growth of the BPO sector, including tax reforms, talent development programs, public-private collaboration, and marketing to enhance international visibility. Investments in high-quality infrastructure, HR improvements for retention, and creating enabling policies for remote and hybrid work models are also suggested to advance Pakistan’s BPO standing. With a focus on higher-end BPO services, AI integration, and knowledge process outsourcing (KPO), Pakistan aims to diversify its BPO offerings, build resilience, and appeal to global investors. The strategy aims to improve Pakistan’s rank in global service location indexes and establish it as a preferred BPO hub in Asia by leveraging its cost benefits and large, trainable workforce. These targeted interventions and strategic focus areas are expected to drive growth and sustainability in Pakistan’s BPO sector over the next five years.