The economic progress of leading economies around the globe is the consequence of entrepreneurship, which flourished in their societies due to specific facilitation to develop an appropriate ecosystem to assist relevant stakeholders, particularly the entrepreneurs. China’s claim of eliminating poverty, according to current standards, is the result of an entrepreneurial culture in almost every sector of the economy, from high-tech industries to agri-products. China claims that no one lives in the country below the official poverty line of 2.30 USD per day at their disposal. This is indeed incredible; in a country of almost one and a half billion people you can’t find a single person below the poverty line. This all happened due to the entrepreneurial culture which China inculcated in society over the years. Small-scale entrepreneurs are vital drivers of China’s economy; they constitute 60 percent of GDP, provide 80 percent of jobs and contribute about half of national tax revenue. Small and medium enterprises (SMEs) have been declared as the backbone of US and EU economies as well. In the United States, 30 million small businesses account for nearly two-thirds of net new private sector jobs in recent decades. According to the official website of the European Commission SMEs, surprisingly, represent 99 percent of all businesses in the EU.
The process of setting up a business and taking on financial risk needs nerves, energy and patience. People who create new businesses are rare species, especially those who are innovators; the source of new ideas, goods, services, and business or procedures. It is the responsibility of educational institutions, government agencies and other stakeholders to sensitise and mentor people with an internal locus of control to experience and realise their unique ideas. It is, however, not a straightforward undertaking to mobilise an entrepreneurial mind-set in a conservative society such as ours. There is a need to encourage working age people to take the risk of establishing new ventures to realise their dreams of independence and self-actualisation. Nevertheless, it needs training and development on one end and an appropriate start-up ecosystem on the other.
According to a recent study, Pakistan needs to create 1.3 million additional jobs on average every year till 2035 to cater to the growth of working age people. Considering existing circumstances, it seems quite impossible for the government sector to fulfil this need. We can address this huge demand by ensuring extensive growth of entrepreneurship in every sector, from replicative to innovative entrepreneurship. Pakistan’s recent ranking on the Global Innovation Index is 107 two points down from its last ranking. This means that we cannot expect innovative breakthroughs quite often on the entrepreneurial front. But there is huge potential even in replicative entrepreneurship for Pakistan in several segments. The survival rate of new business is around 50 to 60 percent globally; however, interestingly it is around 80 percent in Pakistan according to a study conducted in 2016. Factors of failure in Pakistan include the inability to access capital, the absence of appropriate business plans and the avoidance of partnership. These factors clearly indicate a lack of awareness and training. There are quite a few venture capital firms and individual and syndicate angel investors who are investing in Pakistani start-ups.
According to a report, Airlift raised USD 12 million and Bykea USD 13 million in 2020, while an overall 28 percent of venture capital invested in the transport industry. In Pakistan, generally, entrepreneurial initiatives lack appropriate training and development support. People mostly realise their dreams out of their own conviction and personal endeavours, but now there are enough opportunities to seek formal guidance and counselling to develop well-thought-out business plans from vision and mission to market analysis, survival income estimates, start-up finance to growth aspirations. Therefore, all those who desire to realise their dreams through entrepreneurship should look around themselves for possible mentoring opportunities and focus on websites of relevant organisations. Partnership remains a taboo in our society even today, which limits the potential of entrepreneurial initiative. In today’s closely-knitted global community, it is collaboration which multiplies chances of success and faster growth
Currently, Pakistan stands at 120 on the Global Entrepreneurship Development Index (GEDI), while India at 68 and China at 43. The key role of the government to develop a nurturing ecosystem for entrepreneurship remains vital. Initiatives such as ITBs, NICs and Ignite are worth appreciating, but ignoring other sectors is damaging for equitable progress of the nation. The government needs to develop sector-wise incubation centres and sector-specific funds to seed start-ups in every sector of the economy. The bottom line; the promotion and facilitation of entrepreneurial culture in the society is inevitable for the prosperous future of our coming generations.