How collaborative efforts by the Government and private sector can help boost Pakistan’s entrepreneurial ecosystem.
The Skype software was created in Estonia, a little Baltic nation with a populace of 1.3 million individuals. The promising scene it offers for business visionaries has earned it the title of ‘Europe’s new start-up center point.’ Besides Skype, which today has 74 million clients, various billion dollar new companies, including TransferWise have risen up out of Estonia.
The Estonian Government has largely facilitated the growth process of the local start-up industry. The Estonian Entrepreneurship Growth Strategy 2020, an ambitious yet strategic policy document to drive economic activity, was set in place. By increasing productivity, stimulating entrepreneurship and encouraging innovation, the Estonian Minister of Economic Affairs and Communications says:
“Estonia should be one of the best countries in the world to establish and develop a company.”
Point here, the State has put in place a structured, coherent and measurable pathway for the industry to follow.
In another part of the world, with a similar ‘risk-averse’ attitude, the local entrepreneurial landscape is fast developing. Similar to Estonia, it is being driven by the State and more specifically, the IT department of the Government of Punjab that has been the catalyst of change.
Dr Umar Saif, who leads the department, has made it his mission to turn Lahore into our own Silicon Valley. As a first step, Plan9, a technology incubator (named after the first free-share operating software by Bell Labs) was launched in 2012. With the completion of its eighth incubation cycle, 130-plus start-ups have come up, some with net valuations ranging between six and $10 million. Collectively, they have made a sizable contribution to the IT job market.
So the question is how important has this incubator been in shaping the local scene? More importantly, what role has the State played in this?
To answer this, it is important to first analyse the factors which have hampered entrepreneurial evolution in Pakistan. Firstly, the people of Pakistan are risk-averse. From a young age, children are instructed to opt for mainstream career choices, such as engineering, medicine and teaching; the reason being the social status attached and the income flow these professions promise. Secondly, a typical household has limited capital funds available and these are not enough to allow young people to become involved in activities such as entrepreneurship, which are deemed risky. Therefore, entrepreneurship has not been a career option much experimented with, prior to the setting up of Plan9.
The unemployment rate in Pakistan is six percent; that is 3.58 million people who remain unemployed despite being able and willing to work.
With the vision to promote entrepreneurship and develop more job creators in the economy, the Punjab Government realised that the model they adopted had to be localised; therefore, a zero equity model was introduced. Plan9 provides facilities seen as necessary for a start-up to progress, such as office space, basic utilities, legal aid and a professional network, free of cost. In addition, start-ups are offered stipends for financial sustenance. With nothing to lose in monetary terms, young people have been attracted to entrepreneurship as a viable career option.
Dr Saif’s vision has started taking shape as the roots of entrepreneurship have spread beyond Punjab, inspiring efforts by other provinces and the private sector.
Steps must be taken like this
The Federal Government has set up the National Incubation Centre in Islamabad and is now working on the National IT Policy. The Provincial Government of KP, spearheaded by the KP IT Board, has set up technology parks in Peshawar and Abbottabad and a KP Digital Strategy is set to be launched. In addition, Digital Youth Summit – a premier tech conference and start-up expo – is supported by the provincial government.