Business Recorder (BR) Research
” While the growth of support facilities has started to take off in the country, there is a lack of formalized VC and private equity players in the country.”
Don’t be surprised to hear that this is also true for Pakistan. While entrepreneurial development is a key agenda for the global economy, start-ups especially those using technology have also started to develop grounds in the country. While the volatile security and political environment have deleteriously affected the investor sentiment and entrepreneurship climate, it seems that the rise of internet usage and social media has laid the building block for an entrepreneurial environment in the country.
Compared to a couple of years ago, budding incubators, competitions, accelerators, co-working spaces, and forums are the first signs of entrepreneurial development in Pakistan. While talking to BR Research about the potential of freelance business start-ups in Pakistan a couple of months ago, Dr. Umar Saif highlighted how Pakistan has risen to become ranked as the third largest country after USA and India in terms of revenues generated on freelancing websites. “Exports of these projects and services, coming mostly just from kids sitting at home, has surpassed $700 million in terms of revenue”, he said.
A recent report called “The Pakistan Entrepreneurship Ecosystem Report 2014” by Invest2Innovate – one of the largest start-up accelerators around – gives a very thorough view of the evolving entrepreneurship ecosystem in the country. The report highlights how this ecosystem in the country is reflective of global trends, diminishing national boundaries in the wake of brimming internet and technology usage, and local leaders who have had exposure from abroad, and lessons of Silicon Valley.
A key observation of the study is that while the growth of these support facilities has started to take off in the country, there is a lack of formalized VC and private equity players in the country. As explained by the report, the entrepreneurship ecosystem can be divided into two direct domains for analysis: Support, and early stage that comes from these incubators, accelerators, universities and co-working spaces, and Finance that comes later on from government, foundations, investors, and venture capitalists (VCs).
Also, the study observes that increased activity in competitions and forums does not always translate into the formation of start-ups as participants lose interest over time and while universities are building entrepreneurship incubators, there is a need to for more intra-academia collaboration to get things going successfully.
Similarly, the sector faces teething problems like concentration only in the major cities of the country like Karachi, Lahore, and Islamabad. This means more incubator and accelerator programs must be introduced in various other cities to take the development of this ecosystem to the next level.
So while all these observations might be taken as shortcomings of the current system, they also provide a break for the government and the leaders to seize the opportunity to form policies that increase transparency, facilitate and simplify processes, and play a resilient role to help the entrepreneurial ecosystem.
