Emergence of Pakistan as a GCC Powerhouse
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The key factors making Pakistan a lucrative GCC investment destination?
Technology has completely transformed global trade over the past few decades, enabling businesses to set up complex multi-national production networks that contribute over 80% of international commerce (WTO 2019 ). This globalization has changed how markets function, corporations can invest for growth and leverage national advantages to increase their competitive strength. Conversely, nations have benefited from deploying the support infrastructure to create investment opportunities for multi-national corporations (MNCs), as China became the global factory others like India leveraged their business process outsourcing (BPO) infrastructure to become the global business process management hub with an incredible 55% market share (Deloitte 2024 ).
However, post 2020 and the pandemic crises foreign direct investments have decreased from $1.5 trillion to $1.3 trillion in 2023 (UNCTAD 2024 ).? But perhaps what is most telling is the stability of investment in the Southeast Asian market, as the region is quickly becoming an IT investment destination (UNCTAD 2024 ). Global IT exports are on a continual upward trajectory, today nearly 87% of MNCs are actively partnering with international third-party IT service businesses to save up to 60% in overheads (Gitnux ).?
AI is poised to contribute an impressive $15.7 trillion to the global economy by 2030 (PwC)??
Navigating inevitable economic shifts, companies are continually reassessing how they operate and embrace change. While cost is still a primary driver for FDIs, businesses today are interested in leveraging specialist national infrastructure and talent from across the globe to create true competitive advantage. This has led to the formation of new global structures, that expand on the central support infrastructure to create specialist hubs or global capability centers (GCCs) to capture data and create a single source of truth for the business.?
The Shift in Global IT Outsourcing Dynamics?
Global IT outsourcing has undergone significant changes in recent years, macroeconomic influences such as rising labor costs and geopolitical tensions have affected the appeal of traditional outsourcing hotspots like India, Eastern Europe, the Philippines, and China. In response to these challenges, companies are now spreading their GCC locations internationally to reduce risks and avoid over-reliance on any single region.??
This shift has opened an opportunity window for emerging markets, with Pakistan’s being a key contender with significant advantages in form of access to STEM talent, low-cost skilled workforce, and a rapidly advancing IT infrastructure. While the region has seen political unrest, most Pakistani governments have been welcoming to FDIs with incentives such as tax exemptions, infrastructure development, and support for technology startups. These measures are positioning Pakistan as next investment destination and strategic alternative for MNCs.??
Pakistan’s IT Industry: A Growing Powerhouse?
Pakistan’s IT sector has proven to have a multiplier effect on its economy, demonstrating robust growth potential. The sector has experienced a remarkable surge in revenues, exhibiting expertise in various domains, ranging from software development and digital marketing to artificial intelligence and cybersecurity.
Pakistan's IT/ITeS sector has experienced rapid growth over the past seven years (Figure 2), with an annual growth rate of 25.6% per annum. In FY21, it contributed USD 3.9 billion to the economy. A closer analysis shows software consultancy, general computer services, and call consistently outperforming other IT services (Trade in Services data, State Bank of Pakistan ).?
Research also indicates a significant potential for further expansion, with projected revenues reaching USD 10-18 billion by 2028. This anticipated growth holds massive potential for the country, positioning it as a global IT hub, accompanied by a parallel increase in the domestic industry to over USD 6 billion annually (PwC ).?
Thanks to its talented graduates, strong intellectual capital, strategic location, and a conducive government, Pakistan boasts competitive technology, support infrastructure, and low-cost skilled labor, making it an attractive GCC proposition for multinational companies. Moreover, with over 500,000 IT skilled professionals and thriving startup ecosystem highlight the country’s ability to deliver high-quality services at competitive prices (Pakistan Export Strategy 2023-2027 ).??
A notable example is British American Tobacco’s (BAT) Global Business Solutions (GBS) hub in Lahore. Launched in 2021 with a USD 5 million investment, this center employs over 350 professionals. It serves more than 50 countries, demonstrating Pakistan’s capacity to support large-scale, global operations efficiently (The Nation ).?
IT Talent Augmentation in Pakistan?
Talent is pivotal in the GCC’s success, with 93% of GCC leaders citing it as a key driver for scaling operations (Economic Times ). With over 60% of its population aged between 15 and 29, Pakistan offers a youthful workforce with more than 300,000 English-speaking IT professionals. Each year, over 200,000 It graduates enter the market, equipped with skills essential for modern technological advancements (Pakistan & Gulf Economist ). The country's IT professionals excel in areas such as cloud application development, QA testing, and custom software development, positioning it as a strategic partner for businesses looking to scale rapidly.?
In addition to the above, Pakistan’s capability centers focus on developing future-ready leaders and invest heavily in specialized IT team augmentation services. This includes expertise in cloud solutions, e-commerce development, and AI integration. Offering significantly lower cost of hire—often up to 70% compared to traditional outsourcing hubs—Pakistan provides a high-value proposition for global businesses, enabling them to access top-tier talent at one-third of the usual costs. Here’s a breakdown of specialized services offered by global capability centers in Pakistan:?
Why is Pakistan the Next Frontier for Global Capability Centers??
Pakistan is emerging as a key player in the global outsourcing market, offering a compelling mix of cost savings, skilled talent, and strategic location. As companies seek to reduce expenses and access quality IT services, Pakistan stands out as a top choice for Global Capability Centers (GCCs). Here’s how Pakistan competes with traditional outsourcing hubs like India, the Philippines, and Vietnam.?
Pakistan ranks second for financial attractiveness for offshore services globally (Kearney’s Global Services Location Index, 2021 ). With labor costs up to 60% lower than established hubs, businesses can save significantly while still accessing high-quality talent and services (Pakistan Export Strategy Software Development (2023-2027 ). In the fiscal year 2023-24, Pakistan’s IT services contributed over USD 3.2 billion to the export earnings, underscoring a financially viable environment for companies seeking to expand their operations (The Express Tribune ).?
Pakistan boasts the eighth fastest-growing freelance economy in the world, making significant strides in the IT and IT-enabled services sector (Remote Scouts ). This growing talent pool is a crucial asset for companies looking to establish Global Capability Centers, enabling them access to expertise in more specialized areas such as software development, AI, cloud computing, and cybersecurity. The country’s expanding talent pool ensures that companies can steadily find the talent required to build and support their GCCs.?
The country’s geographical position links Central Asia, Eastern China, the GCC, Africa, Southeast Asia, and Oceania, making it ideal for regional IT hubs. Its 5-hour time zone advantage over Melbourne and London allows global enterprises to easily coordinate operations, providing seamless integration into international workflows and making it a strong candidate for global service centers (Pakistan Software Export Board ).?
Pakistan is set to establish 10 new Software and IT Parks by 2025, including Islamabad’s IT Park, developed with South Korean cooperation. These parks will feature startups, incubation centers, and modern amenities. By 2027, an additional park near Karachi's Jinnah International Airport will be operational. With 43 software technology parks already dispersed across 20 cities, the initiative aims to boost IT growth and exports, providing state-of-the-art facilities and uninterrupted connectivity for startups and global businesses (Profit by Pakistan Today ).?
Major global technology giants like IBM, Teradata, Bentley, Mentor Graphics, and S&P Global have already established BPO, R&D, and global consulting services centers in Pakistan. Moreover, Fortune 500 companies like Google, Amazon, and WhatsApp also reply on Pakistan for outsourced services (50Pros ). This trust from global firms further reinforces Pakistan’s potential to support GCC operations.?
Pakistan’s recognition among the top 50 jurisdictions in the Global Services Location Index (GSLI) highlights its elevated position as a strategic capability hub (Business Recorder ). Moreover, the government-sponsored Special Technology Zones offering tax incentives, attract both local and global tech companies. With 13,000 registered IT companies and a 47% increase in tech exports, Pakistan is already a thriving tech hub. The zones accelerate this growth further, creating more opportunities for IT graduates and attracting global tech businesses – supporting GCC growth (Forbes ).?
The lucrative incentives by the government of Pakistan further extend the value of establishing or expanding GCCs in Pakistan. Some of these benefits are outlined below:?
These advantages provide companies with a strong footing—financial and operational—to scale their global capabilities in a cost-effective yet innovation-driven environment.?
Position for Growth in Pakistan’s GCC Landscape?
Pakistan is emerging as a strategic hub for Global Capability Centers, standing out as an ideal destination for companies seeking to develop resilient, innovative, and scalable operations. Yet, recognizing the potential of a value-driven destination is only part of the equation. Driving sustainable value in this strategic location requires more than just market entry. It demands a profound understanding of local dynamics and the ability to navigate the complexities of global operations with precision.?
One of the keys ways to address this need is partnering with third-party GCC service providers or external partners. These partners bring deep expertise in talent acquisition and technology deployment, along with extensive networks, enabling businesses to streamline and accelerate their end-to-end transformation journey. However, unlocking the full potential of these partners hinges on selecting the right provider. To ensure alignment with your strategic goals, ere are eight essential traits to evaluate when choosing a GCC partner as outlined by EY :?
With third-party IT service providers accounting for nearly half of all office space leased in 2023, the critical role of strategic partners in the global business ecosystem is undeniable (Business Standard)?
This trend underscores the importance of third-party service partners in enabling enterprises to achieve operational excellence and scale their transformation efforts. CodeNinja Consulting (CNC), a key player in capability scaling industry has leveraged its domain expertise and knowledge graph to facilitate expansion for many multi-national corporations. The service provider’s true success lies in the infrastructure it has been able to build overtime, reinforced through its central development platforms, productivity enhancement tools and a proprietary model for developing high performance teams based on the Diamond Team Structure (DTS) Framework.?
CNC Diamond Team Structure (DTS) Framework: A Scalable Approach to Capability Centers?
CodeNinja Consulting’s Diamond Team Structure (DTS) Framework, a scalable, hybrid model, reinvents managed services by integrating operational efficiency with strategic innovation. Tailored for GCCs, DTS is a three-layered model—Core (Operations), Center (Solution drivers), and Top (Strategic depth)—that empower business with seamless execution, domain-tuned expertise and leadership-driven innovation.?
At CNC, this framework has been instrumental in supporting enterprises as it develops Build-Operate-Transfer (BOT) and Virtual Captive Centers (VCCs). By strategically recruiting top talent from digital elites and forming partnerships with frontier technology companies, CNC has established a robust foundation for its capability centers. Scalable for both offshore and nearshore deployments, it equips businesses with the tools to achieve operational excellence and long-term strategic success, supporting clients in North America (NA), the Middle East and South Asia (MESA), and the Asia-Pacific (APAC) regions.??
As global demand for capability centers rises, CNC continues to strengthen its infrastructure and deliver strategic value to global businesses, empowering them to scale while retaining regional control and optimizing performance.??
Way Forward?
If you’re looking to explore how GCCs can enhance your operational capabilities, our experts can help you craft a tailored GCC strategy that aligns with your business goals.?Schedule a consultation today to assess your GCC potential and uncover how it can translate into sustainable, lucrative outcomes for your organization.??
For more insights, check out our latest white paper, “Global Capability Center (GCC): The Catalyst for Enterprise Reinvention ” and gain a comprehensive understanding of the transformative potential these innovation hubs offer.?