Pakistan has taken an important step by approving a National Artificial Intelligence (AI) Policy and committing $1 billion towards building an AI ecosystem by 2030.
The initiative recognises that AI is already shaping the future of economies, industries, governments and societies. With Agentic AI already here and Artificial General Intelligence (AGI) around the corner, the real question is not whether Pakistan should invest in AI. The question is how to maximise the economic return on that investment.
For decades, developing countries have measured success in terms of the number of graduates they produce. More recently, the focus has shifted to digital skills, coding academies and professional certifications. These are all important, but skills alone do not create prosperity. Wealth is created when knowledge is transformed into products, products into companies, and companies into exports, jobs and economic growth.
Pakistan today is not starting from zero. The country has more than 250 universities, over 2.5 million students, hundreds of thousands of graduates each year, a growing number of computer science and engineering programs, and thousands of research publications annually. In addition, NAVTTC, the Ministry of IT, provincial governments and private training institutes are already producing large numbers of IT and AI-skilled graduates. The talent pipeline exists.
What Pakistan lacks is not talent. What Pakistan lacks is a systematic mechanism for transforming talent into globally competitive technology companies.
The world’s most successful innovation economies did not become prosperous merely by training people. They became prosperous by building ecosystems that converted talent into startups and startups into global companies. Silicon Valley in the US, Singapore’s startup ecosystem and innovation strategy, and India’s recent rise in technology entrepreneurship all demonstrate the same lesson. Skills are necessary, but companies create wealth.
Pakistan’s $1 billion AI commitment therefore presents a unique opportunity. Rather than directing the majority of resources toward additional training programs, a substantial portion of this investment should be deployed through university incubators, National Incubation Centres (NICs), venture acceleration programs and startup financing mechanisms. The objective should be to create a national AI startup production system.
Universities must become the starting point of this ecosystem. Across Pakistan, thousands of innovative ideas emerge every year from students, researchers and faculty members. Yet only a small fraction ever reaches the marketplace. Business Incubation Centres (BICs), now operating in many universities, can serve as the first stage for identifying and nurturing promising AI ventures. These startups can then graduate into National Incubation Centres where they receive mentoring, business development support and access to investors.
The missing piece is a world-class National AI Accelerator. Pakistan needs an institution modeled on globally successful accelerators such as Y Combinator, Techstars and 500 Global. Its sole mission should be to identify high-potential AI startups, accelerate their growth, connect them with investors and help them scale internationally. The goal should not be to produce thousands of small startups. The goal should be to produce globally competitive companies and Pakistan’s first generation of AI unicorns.
AI offers opportunities across virtually every sector of the economy. Agriculture can benefit through precision farming, crop monitoring and water optimisation. Manufacturing and textiles can improve productivity, quality control and supply chain efficiency. Healthcare can leverage AI for diagnostics, telemedicine and drug discovery. Government can use AI to improve service delivery, taxation and regulatory efficiency. Defence and strategic technologies offer opportunities in cybersecurity, predictive maintenance, autonomous systems and simulation technologies. These are not just technology applications but rather potential export industries.
The economic potential is enormous. Pakistan’s IT exports currently stand at approximately $4 billion annually. With a focused AI startup and acceleration strategy, it is reasonable to target a threefold increase to $12 billion by 2030. This would add approximately $8 billion annually in export earnings by the end of the decade and generate cumulative additional export revenues of more than $22 billion over five years. Few public investments offer such potential returns.
Equally important is the development of a stronger investment culture. Pakistani investors have traditionally favoured real estate and other passive assets. While these sectors have their place, the future wealth of nations will increasingly be driven by intellectual property, technology platforms and innovative companies.
Angel investors, venture capital funds, corporations and the Pakistani diaspora all have important roles to play in financing the next generation of technology ventures. The government can help by establishing co-investment funds and matching mechanisms that reduce risk and attract private capital into the innovation economy.
The objective should be clear. By 2030, Pakistan should aim to create thousands of AI startups, hundreds of investor-ready companies, dozens of globally competitive firms and several unicorns. More importantly, it should create hundreds of thousands of high-value jobs and establish AI as a major source of export earnings and economic growth.
The debate, therefore, should not be about spending more money. Pakistan has already committed significant resources to AI. The challenge is spending that money wisely. If the country simply produces more certificates, the economic impact will be limited. If, however, it builds a national AI startup production system through university incubators, National Incubation Centres, accelerators and venture financing, the same investment can become a powerful engine of exports, jobs and prosperity.
Pakistan already has the talent. It already has the policy commitment. The next step is to build the companies that will transform AI from a technology initiative into a national wealth creation strategy.
The writer is a former senator and former chairperson of the HEC.
