Economic Strength of a Developing Country through the IT and Service Sector


In developing countries, a large part of the population is forced to live below the poverty line. There is a dire need to undertake efforts to enhance developing countries’ financial and economic strength. To draw useful conclusions, studying strategies and pathways followed by developed countries is very interesting. However, in my opinion, parallels can’t be drawn. Developed countries are mostly located in the US and Europe. This road to success for the European countries can be traced back to the renaissance age. This in turn provided a technological edge, which was diligently converted into cascaded industrial revolutions. While time and space favored the US who joined the elite group by capitalizing on the World Wars, China is the new industrial giant of the world. Exploiting its own enormous human resource and comparative advantage compared to the high labor costs in US and Europe, China has transformed itself into a mammoth industrial force, who is not willing to spare any room for new entrants. As such, opportunities for developing countries to also become industrial giants are difficult to acquire. This obligates developing nations to tailor their strategies to concurrent technological and industrial dynamics. It is very challenging for any nation to establish itself on industrial grounds. Increasing the production volume requires industrial infrastructure, efficient and reliable supply chains, as well as dozens of other factors that make it impractical for any new contestant to join the club of industrial nations. New avenues need to be explored, which should be cost effective, less technologically intense with a quick return of investment, and most importantly, with less capital expenditure (capex).

The IT & Service Sector

Fortunately, the world is transiting through the era of Information Technology (IT) which greatly supports the service sector. In my opinion, IT is a business sector that deals with computing, including hardware, software, telecommunications and generally anything involved in the transmission of information or the systems that facilitate communication. IT also includes the management of data, whether it is in the form of text, voice, image, audio, or some other form.

The service sector, in a similar manner, is the part of economy that provides support instead of goods. The service industry is very wide in nature as it covers a large range of activities that add value to businesses and individuals. In contrast to other sectors, the output produced by the service sector is not a physical product but instead are services that enhance, maintain, repair, shape, or perform different alterations to physical items. It also covers activities such as transportation, medical services, education, banking, insurance, waste disposal, telecommunications services and other complex activities that are crucial to a society functioning properly.


I have reviewed many startups and entrepreneurs in my own country (Pakistan) and other developing countries. Almost all of them are IT or service related, but hardly any produce physical hardware. This is primarily due to capex and other issues. I can think of many ideas that could be converted into huge economic benefit using very few finances. The gaming industry, call centers, online maintenance and management, software development, online financial and marketing services, online trading are just a few.

In my opinion, developing countries can change their fate by exploiting and exploring the IT and service industries, which would allow them to earn significant forex.