Web Desk: Southeast Asia is on track to build a $1 trillion digital economy by 2030, powered by rapid digital transformation and increasing adoption of artificial intelligence (AI), while Pakistan’s record information technology exports highlight its growing digital potential even as experts warn that limited AI readiness could slow future growth.
The Association of Southeast Asian Nations (ASEAN) expects its digital economy to expand from about $300 billion to nearly $1 trillion by the end of the decade, supported by a young population, rising internet penetration, digital payments and coordinated regional policies aimed at boosting digital trade and innovation.
Analysts say AI is expected to become a key driver of the next phase of digital economic growth, enabling businesses to improve productivity, automate operations, develop higher-value digital services and strengthen global competitiveness.
Against that backdrop, Pakistan exported nearly $4.5 billion worth of IT services in fiscal year 2025-26, according to Pakistan Bureau of Statistics (PBS) data, marking a record high and underscoring the country’s expanding role in the global digital economy. Exports rose from $3.475 billion a year earlier, extending uninterrupted annual growth.
Pakistan’s technology companies are increasingly diversifying beyond traditional markets in the United States and Europe by expanding into Asia-Pacific economies such as Japan and Singapore.
Besides software development, exports are increasingly driven by business process outsourcing (BPO), software-as-a-service (SaaS) platforms and gaming, reflecting growing international demand for Pakistan’s digital services.
Industry executives attribute the expansion to Pakistan’s young, skilled and cost-competitive workforce.
“This strong momentum reflects sustained global demand for Pakistan’s digital services and highlights a growing industry focus on building resilient, multi-market revenue streams,” said Nagesh Devata, Senior Vice President and Head of Asia-Pacific at Payoneer.
However, industry experts say maintaining that momentum will increasingly depend on how effectively Pakistani businesses integrate AI into products, services and operations.
Governments across Southeast Asia are strengthening digital ecosystems through investments in technology, electronic payments and digital infrastructure while working to harmonize regulations under the ASEAN Digital Economy Framework Agreement (ADEFA).
The agreement aims to facilitate digital trade, cybersecurity cooperation, cross-border data flows and digital payments, creating a more integrated regional marketplace.
Economists say AI is expected to amplify these gains by improving efficiency, supporting innovation and creating new digital business models, making it a central pillar of ASEAN’s long-term digital economy strategy.
Although AI tools such as ChatGPT are increasingly used by students, professionals and businesses in Pakistan, experts say adoption remains uneven and institutional readiness remains limited.
Muhammad Shahzar Illahi, co-founder and chief executive of EnablifyAI, said banks have emerged as early adopters by building in-house AI applications and hiring AI engineers. However, he said most businesses still lack formal AI strategies and many executives remain unfamiliar with the risks associated with using public AI platforms.
“AI is far bigger than ChatGPT,” Illahi said, adding that AI can significantly improve productivity and create new business opportunities, provided organizations build strong data systems and invest in skilled talent.
He said AI literacy among policymakers and business leaders will be essential if Pakistan wants to compete in the next phase of the digital economy.
Pakistan’s greatest obstacle is not a lack of digital talent but weak institutional readiness.
The Pakistan Bureau of Statistics does not collect comprehensive data on AI adoption across industries, while existing labour surveys do not track occupations most vulnerable to automation or sectors where AI could deliver the greatest productivity gains.
Experts say AI systems require reliable, transparent and timely data. Without stronger national databases, better corporate reporting and improved governance, businesses will struggle to deploy AI effectively and policymakers will find it difficult to design evidence-based strategies.
Although the federal government has introduced draft data governance policies, announced technology and AI innovation hubs and launched an AI-assisted tax administration initiative, observers say implementation remains at an early stage.
Dr Dur-e-Nayab, former director of research at the Pakistan Institute of Development Economics (PIDE), said the long-term implications of AI remain uncertain even for specialists.
“I don’t know anyone who truly understands AI’s full consequences,” she said.
Still, economists argue that AI presents Pakistan with an opportunity to move beyond traditional outsourcing by developing higher-value digital products and services, improving productivity and strengthening export competitiveness.
For now, they say Pakistan’s digital export boom provides a solid foundation. Whether the country can replicate the rapid digital transformation seen across ASEAN will depend on its ability to build AI-ready institutions, improve data quality, strengthen regulation and equip its workforce for an increasingly AI-driven economy.
Read more: What are the top 10 emerging technologies of 2026?
