The ‘digital to analogue’ shift is nowadays fully discernible – and in every conceptual sense – all across the globe. There is, of course, nothing new about this progression: the individual domains of business, economy and technology have always influenced and changed each other (in a seeming, tripartite, dialectic).
But it is how these three have evolved over the passage of time, and particularly within Pakistan’s socioeconomic sphere, that is the subject of this enquiry; and a topic of much thriving academic speculation.
Understanding the Modern (Global) Economic Shift
Now that (old-school) colonialism does not really figure as a viable option for developing economies to boost their capital reserves — as was the case in preceding centuries (the capitalist model of economic configuration critically depends on the development of technology, the identification of new modes of production and markets, as well as the systemic ‘creation’ of new wants to stoke fiscal growth) – more and more countries are relying on the internet to pursue what has been termed as a ‘neo-colonial’, transnational form of economic entrenchment.
The post-War ‘One World’ order, as promulgated by the US-led neoliberal political front, has certainly been blamed for resorting to this subtle mode of borders-dissolution to see to its worldly ascension; a censure that undoubtedly holds some merit in its foundations.
At a time when the traditional economy and businesses have slowed globally and a significant degree of volatility exists within their functioning, it is digital businesses (the de facto, economically consequential, spawns of the Internet Age) that are carrying out the highest levels of all-round growth.
Gone are the days when the traditional brick ‘n’ mortar national retail arrangement could be considered solely responsible for spurning the free-flow of currency; the digital industry now sits on this throne.
When the ‘Winds of Change’ Passed through…
Currently, large demographic sections of the Pakistani economy – particularly those centered in the central, north-western, and south-eastern regions of the country — have access to internet-connected smartphones and other portable devices. These ‘always online’ wares can be likened to virtual markets which promise both instant access to potential customers as well as an unprecedented crop of opportunities for delivering on rapid conversions.
So the country was poised to benefit from the digital revolution when it reached its shores – which was, admittedly, about five to seven years late, but still potent enough to provoke a macro transformation.
Tracing the Influence of Online Businesses on the Local Economy
In a country like Pakistan, where the majority of the population is distributed along a predominantly youthful (15-54 years of age) labor force curve, the employment opportunities that online businesses have the potential to provide can significantly facilitate the growth of the local economy.
Careem
Careem (the Dubai-headquartered, ride-ordering app service which operates in more than 100 cities; recently acquired by Uber), after it was introduced in the country – and in the time since then – has changed the lives of tens of thousands of people; especially those hailing from the urban middle classes. The service operates in the manner of a rider-driver connecting ‘brokerage’; securing a cut from every successful passenger journey mediated through its platform.
Its targeted demographic (from the employment standpoint) is mostly comprised of the ‘young and headstrong’ who like to think the pursuit of the full spectrum of menial jobs (like plumbing, technician work, and carpentry) as being beneath their station in life – due in large part to a decadent mode of sociocultural conditioning which maintains solid class divisions.
Careem, as such, and to its credit, transformed an effectively blue-collar job (that of driving people around town) into a white-collar undertaking. Drivers registered to the service consider its algorithmic function, as well as the company’s contractual allowance to accept rider requests on their own terms, as being a guarantor of the liberty that they associate (psychologically) with high-stationed employment positions.
It came as no surprise, then, that the service proved to be as popular as it did in a very short period after its local availability.
Today, the company provides employment to huge numbers of drivers around the country – even in the cities where no cab-culture previously existed (which in Pakistan has always been largely confined to the Karachi and Islamabad metropolitan centers).
Daraz.pk
Daraz’s contribution to the economy has been slightly different from that of Careem. Whereas the latter provides direct employment, the former allows thousands of businesses (and in turn their employees) to grow.
When the e-retailer was launched, it only catered to selling wares for Pakistan’s fashion industry. Fast forward to 2019, and the company has expanded to become a general marketplace for the exchange of all sorts of products: from the minutest hair pin accessory to the largest kitchen appliance that you can think of.
Following its wild success in Pakistan, the service also operates online chapters in Bangladesh and Myanmar.
Shoring up the Formal Economy
Pakistan’s economy has always been afflicted by the ill of not being fully documented, and most local businesses have historically tried to adopt every practicable measure to keep their cash flows beyond the reach of governmental scrutiny.
To be fair, due to a severe lack of initiative and understanding on the part of successive governments, businesses, and citizens generally, stood to gain a lot by remaining outside the purview of the country’s taxation authorities than inside it. In most economies, following this course of action is actually harmful (if not downright illegal) – a trend that has not held much sway in Pakistan’s complicated social setup of severely inadequate legislative/penal implementation.
The country’s new crop of digital businesses such as Daraz, Careem and Prop (a fast-on-the-ascent new real estate platform), however, operate completely in the public domain and under the uninterrupted scrutiny of the executive’s various regulatory bodies. As a consequence of their primal mode of functioning, they cannot work without first undergoing the aforementioned documentation procedures (which their brick ‘n’ mortar counterparts have always found relatively easier to evade).
Greater documentation, of course, means the attainment of higher tax revenues – and so the positive correlation between the growth of local online businesses and the national economy is clear.
In parting
Pakistan’s burgeoning culture of indigenously conceived digital startups holds massive potential for further expansion and economic contribution. The country, according to most estimates, still remains about five to seven years behind the more established global polities in the development of its online business (e-commerce) infrastructure.
Indeed, apart from a few international and/or local multinational companies that have outdone even their own profit-maximizing aspirations, other business concerns are also expected to grow in the coming period; following the improvement of digital channels that Pakistan – when considered against the backdrop of the ‘normal’ maintained in other countries – crucially falls short on.
