Pakistan stands at a critical juncture where digital transformation, if strategically executed, could become a powerful catalyst for sustainable and inclusive economic growth. Global experience shows that countries equipped with strong digital infrastructure, a digitally skilled workforce, and institutional readiness are far better positioned to leverage Artificial Intelligence (AI) for structural transformation and long-term productivity gains.

Studies indicate that integrating AI across economies represents the most significant shift since the Industrial Revolution. Returns from AI adoption are strongly correlated with a countrys preparedness in infrastructure, human capital, and policy coordination.

Pakistans demographic structure offers a distinct advantage. With over 80 percent of the population under 40, there is a large reservoir of young people who can be trained to support an AI-enabled economy. Low female labour force participation presents an untapped opportunity to expand the digital workforce, while the large informal economy could serve as a testing ground for inclusive AI-enabled service models. At the same time, Pakistans rapidly expanding base of digital consumers reveals a latent demand for AI-driven platforms in commerce, health, education, and governance.

Despite this potential, Pakistan lags behind regional economies in AI preparedness, as reflected in its digital infrastructure and skillssomething underscored by the International Monetary Funds Artificial Intelligence Preparedness Index. This gap highlights the urgency of targeted interventions at the federal level.

To harness AIs potential for economic transformation, the federal government under Prime Minister Muhammad Shehbaz Sharif has pledged a well-planned, sequenced strategy through the National Economic Transformation Plan. Foundational reforms in digital infrastructure, education, and regulatory capacity are being prioritised, with pilot projects already underway in high-impact sectors to demonstrate value and build institutional confidence.

In the medium and long term, Pakistan can scale up AI deployment across economic sectors, invest in research and innovation, and deepen academic-industry partnerships to build domestic capabilities. With such strategies, Pakistan could position itself as a regional AI leader by embedding AI technologies in governance and economic institutions and ensuring inclusive access through global partnerships and socially responsive digital policies. Without adequate preparedness, however, the country risks being left behind in the unfolding wave of AI-driven global economic transformation.

According to reports, Pakistans first-ever Artificial Intelligence (AI) Policy 2025formulated by the Federal Ministry of Information Technology and Telecommunication and approved by the federal cabinetmarks a milestone in the countrys digital transformation. The policy sets ambitious targets: training one million AI professionals by 2030; establishing an AI Innovation Fund and AI Venture Fund to boost private-sector involvement; creating 50,000 AI-driven civic projects and 1,000 local AI products in the next five years; awarding 3,000 annual AI scholarships; facilitating 1,000 research projects; and promoting the inclusion of women and differently abled individuals through accessible education and financing. It also aims to strengthen cybersecurity, national data security protocols, and compliance with international AI regulations while fostering global partnerships.

All of this augurs well, but so far there has been no word on the allocation of funds to implement the National AI Policyan essential step if Prime Minister Shehbaz Sharifs vision for a truly Digital Pakistan is to become reality.

Muhammad Zahid Rifat
The writer is Lahore-based Freelance Journalist, Columnist and retired Deputy Controller (News), Radio Pakistan, Islamabad and can be reached at zahidriffat@gmail.com