- Digital transformation and emerging technologies shaping business landscapes in Pakistan and in the Gulf
The business landscapes in Pakistan and the Gulf Cooperation Council (GCC) countries are undergoing rapid and profound evolution, propelled by accelerated digital transformation and the widespread adoption of emerging technologies including artificial intelligence (AI), fintech, e-commerce, and advanced connectivity solutions. These regions are strategically deploying digital innovations to diversify their economies, improve operational efficiencies, and stimulate groundbreaking innovation. Pakistan, leveraging its large youthful population and progressive policy frameworks, is steadily progressing toward a knowledge-based economy.
In contrast, GCC countries, particularly Saudi Arabia and the United Arab Emirates (UAE), are aggressively pursuing economic diversification away from oil dependency through multibillion-dollar investments in AI ecosystems and state-of-the-art digital infrastructure. This strategic alignment is not only revolutionizing local enterprises but also creating substantial opportunities for enhanced cross-regional partnerships and collaborative growth.
Pakistan’s digital advancement gained substantial traction in 2025, marked by the implementation of foundational legislative measures. The Digital Nation Pakistan Act, enacted in January 2025 and entering into force shortly thereafter, created the Pakistan Digital Authority (PDA) to centrally coordinate and drive national digital initiatives, fully aligning with the government’s ambitious “Digital Nation” vision. Recruitment for the PDA advanced swiftly, with key expert roles filled in domains such as AI, software engineering, and digital infrastructure development.
Building on this foundation, the federal cabinet approved the National Artificial Intelligence Policy 2025 in July, establishing a comprehensive six-pillar framework: innovation ecosystem development, awareness and readiness programs, secure AI practices, sectoral transformation, robust infrastructure, and international partnerships. The policy outlines ambitious targets, including training one million AI professionals by 2030, deploying 50,000 AI-enabled civic projects, and developing 1,000 indigenous AI products. It integrates harmoniously with complementary policies like the National Cyber Security Policy and Cloud First Policy, fostering a unified and secure approach to digital governance.
These policy milestones translated into measurable achievements throughout 2025. Broadband infrastructure expanded significantly, bolstering freelancing and IT services sectors. Pakistan’s IT exports demonstrated exceptional resilience and growth, achieving record monthly figures such as $386 million in October 2025 and $356 million in November 2025. For the first five months of FY2026 (July-November 2025), IT and telecom exports reached approximately $1.8 billion, reflecting an 18-19% year-on-year increase.
Preparations for 5G rollout progressed, with commercial deployment planned for seven major cities —Karachi, Lahore, Islamabad, Rawalpindi, Faisalabad, Peshawar, and Multan — ommencing in phases during 2025. Businesses reaped benefits from enhanced e-governance services, reduced bureaucratic processes, and platforms like Raast, which enabled seamless instant digital payments and advanced financial inclusion for underserved segments and small enterprises.
Meanwhile, GCC nations continued to showcase advanced digital maturity, with 5G coverage exceeding 90% in key areas and near-universal internet penetration laying a strong foundation for next-generation technologies.
Saudi Arabia’s Vision 2030 and the UAE’s comprehensive digital strategies fueled massive investments, Saudi Arabia advanced flagship projects like NEOM and forged partnerships with global tech leaders for AI hubs, while the UAE directed billions toward sovereign cloud infrastructure and AI research. Non-oil sectors exhibited vigorous expansion, with the regional e-commerce market projected to approach $50 billion by the end of 2025. Enterprises across the GCC increasingly embedded AI applications in critical areas such as healthcare, energy management, and smart city development.
The fintech sector emerged as a critical nexus linking financial services with digital innovation in both regions. In Pakistan, the ecosystem attracted significant investment, with fintech funding reaching $52.5 million in the first half of 2025, supporting nearly 450 startups. Platforms like Raast drove explosive growth in digital payments, processing hundreds of millions of transactions and enhancing inclusion for millions in underserved and rural populations. In the GCC, established hubs in Dubai and Riyadh continued to draw global expertise, prioritizing embedded finance, Islamic-compliant innovations, and high adoption rates for mobile and card-based payments.
E-commerce also experienced explosive growth as a primary catalyst for consumer and business development. Pakistan’s market expanded robustly, propelled by mobile-first shopping and a demographically young consumer base, with revenue projections estimating $4.7-7.7 billion in 2025. Leading platforms empowered SMEs, women entrepreneurs, and regional sellers, facilitating a shift from traditional cash-on-delivery to secure digital transactions. In the GCC, the sector neared the $50 billion milestone, characterized by sophisticated omnichannel strategies, advanced logistics networks, and dominance in categories such as fashion, electronics, and groceries.
At the core of these transformative shifts are AI and foundational infrastructure advancements. Pakistan’s AI market is forecasted to approach $949 million in 2025, with the new policy promoting ethical deployment, establishment of research centers, and strengthened global collaborations. Ongoing 5G preparations in major urban centers are poised to unlock Internet of Things (IoT), smart applications, and edge computing capabilities. In the GCC, sovereign wealth funds channeled billions into AI initiatives, high-performance data centers, and computing resources, solidifying Saudi Arabia and the UAE as leading global contenders, with extensive 5G deployment enabling real-time, industry-specific innovations.
Despite these impressive strides, persistent challenges warrant focused attention. Skills gaps in advanced technologies, evolving cybersecurity threats, and lingering digital divides, particularly in rural and underserved areas, necessitate sustained investment and targeted interventions. Regulatory frameworks must continue evolving to strike a balance between fostering innovation and upholding ethical standards, data privacy, and consumer protection. Infrastructure development requires ongoing public and private funding to ensure equitable access and resilience against disruptions.
Opportunities for deepened synergy between Pakistan and the GCC remain abundant and strategically compelling. Pakistan’s abundant pool of skilled tech talent ideally complements the GCC’s substantial capital resources and world-class infrastructure. Throughout 2025, bilateral engagements intensified, encompassing discussions on joint AI ventures, digital governance collaborations, startup financing mechanisms, and advancements in IT and fintech sectors. Strong remittance corridors and vibrant expatriate networks provide additional foundational linkages, creating pathways for talent mobility, knowledge transfer, and large-scale cross-border projects.
In conclusion, digital transformation is fundamentally redefining business models, operational paradigms, and long-term economic trajectories across Pakistan and the GCC. Both regions are strategically positioned to excel in inclusive, technology-driven innovation, generating substantial employment opportunities, sustainable growth, and heightened global competitiveness. With unwavering policy commitment, robust public-private partnerships, and deepened regional collaboration, Pakistan and the GCC are set to fully harness emerging technologies, constructing resilient, prosperous, and forward-looking digital economies that benefit generations to come.
The author, Nazir Ahmed Shaikh, is a freelance writer, columnist, blogger, and motivational speaker. He writes articles on diversified topics. He can be reached at sir.nazir.shaikh@gmail.com