Among the emerging technologies, AI has emerged as a breakthrough capability that has reshaped labour relations, digital governance, national security and development. Scholars have likened the AI revolution to the discovery of electricity, describing it as the foundational stone of the 4th Industrial Revolution. The global economy has transformed into a hyper-connected, data-driven international system, where the volume and speed of information systems determine productivity. According to a survey by Stanford University , the share of organisations that have adopted AI increased from 55 percent in 2023 to 78 percent in 2024, while the share that have adopted generative AI nearly doubled, from 33 to 71 percent in a single year. At the risk of finding itself a technological lagging economy, Islamabad decided to launch its National AI policy in 2025. If properly implemented, the policy has the potential to increase Pakistan’s GDP growth from 7 to 15 percent by 2030.
In this regard automated decision making in key enterprises can increase productivity by reducing the number of routine tasks and cost of operations, enabling Small Medium sized enterprises to compete with larger firms. With regards to the freelance industry, AI can help build software necessary to compete in the global market. The agriculture sector can also benefit from data driven predictive analysis, which can be used to conduct precision farming and improve climate mitigation strategies. These findings are verified from a report published by Pakistan Institute of Development Economics (PIDE) in 2025, which predicted that a modest 1 percent improvement of AI related infrastructure could contribute towards the growth of Pakistan’s economy by 7 to 8 percent till 2030. This development could quickly scale as 10 to 12 percent adaptation rate can boost the economy by 12 to 15 percent, amounting to roughly 40 billion USD.
The integration of AI, while critical for improving economic productivity in the country, would also have a disruptive impact on the job market. The World Bank notes this development and warns that developing countries could face issues related to AI job displacement, particularly countries like Pakistan, which have to produce 2.5 to 3 million jobs annually. The jobs most at risk are repetitive jobs that have minimal creativity and decision-making involved. Entry- level opportunities would be limited, thereby lowering the supply of labour and leading to decreased wages. This would exacerbate the wage difference between blue- and white-collar jobs, as workers with strong digital technical skills will be preferred. Though the World Bank’s research also indicated that developing countries typically have lower exposure to AI software. This is largely true for the informal sector which can absorb workers who are displaced by algorithms. Additionally, while AI would reduce repetitive jobs, it will also create highly technical jobs such as data engineers, digital entrepreneurs, software development and cyber security experts. The World Bank report concludes that Pakistan’s economy can grow if it adapts efficiently to AI-driven change by harnessing its productivity potential and implementing gradual measures to mitigate the displacement effect.
Apart from its economy, AI will likewise create a disruptive impact by introducing smart governance in Pakistan. Smart or E Governance refers to the use of information and technology to improve governance. Through automated governance red tape policies may significantly improve service delivery and citizenship engagement, which is crucial for eliminating petty corruption. Bureaucrats could improve their decision making through real time data integration and better situational awareness. Perhaps most consequentially given Pakistan’s turbulent electoral history, AI can enhance voter transparency, strengthen public confidence and contribute towards political stability.
At present Islamabad seems to be slowly embracing the era of digitalisation and AI. This is corroborated by a PIDE’s report which states that Islamabad has improved its global e- government ranking from 150 in 2022 to 136 in 2024. To fully harness and adopt the potential of this revolutionary technology, Pakistan needs to develop its own digital infrastructure and an AI ecosystem. To achieve this goal, Islamabad needs to invest more in data centres, train large pool of trained professionals, build a reliable supply chain network, and generate more computing power. Karachi reportedly has the capacity of 3,000 GPUs, which, while significant, is simply not enough to achieve widespread AI adoption.
Pakistan has an abundance of raw data, owing to its expanding digital network and the consumer culture of its youth. Pakistan’s rapid digitalisation has outpaced its legal safeguards, which leaves personal information vulnerable, clearly indicating that the primary concern should not be data availability but its security. Pakistan’s insecure networks are vulnerable to the rapid evolution of malware, which has introduced new variants of Advanced Persistent Threats (APT) particularly the polymorphic virus. This malware has the capability to modify its code with each infection rendering traditional signature based antivirus software useless. To guard against such threats, Pakistan needs an urgent renewed focus and modernisation of its cyber security programme.
The ambition to adopt AI into its economy and industry while prudent and timely, requires a realistic appraisal of Pakistan’s tech ecosystem. AI represents a complex technology which rests on country’s digital infrastructure, robust cyber security system, data engineers and adequate power supply. Without these supporting mechanisms the National AI Policy of 2025 faces a serious risk of falling prey to inefficiency, one which is surrounded by great ideas but ultimately is less productive
Syed Ahmed Ali is a Research Assistant at the Centre for Aerospace & Security Studies (CASS), in Islamabad, Pakistan. He can be reached at [email protected]
