The entrepreneurial environment of Pakistan has undergone a noticeable transformation over the last few years. The once immature Pakistani economy with little diversification has now opened itself to innovation, a change propelled by the youth sector dominating the population. The advances in technology, coupled with encouragement by the investors, have multiplied the potential of the unexplored market; the ever-changing digital environment further contributes to making Pakistan a definite force in the startup world.
A Young Nation Driving Change
At the crux of this startup revolution is the country’s most valuable resource—its youth. As a nation with over 60% of its population younger than 30, it is equipped with the drive to change its way of getting things done. Most of the youth is familiar with advanced technology, a skill that increases their capability of solving problems in essential fields such as education, healthcare, supply chain management, and finance. Similarly, their drive for change has led to the revitalisation of industries in need of reinvention.
The energy of the target consumer in this region is best displayed by the startup environment. For instance, there was Airlift—a mass transit provider that transitioned into a quick commerce space, showing the Asian entrepreneurs’ willingness and ability to adapt to the dynamic consumer needs. Similarly, Bazaar, a business-to-business marketplace for small and medium businesses, transformed the supply sources, making the supply-side economics accessible to the common businessman. It is important to note that these ventures are not limited to solving problems within their immediate environment; rather, their successful execution and continued existence contribute to the movement encouraging other innovators to dream bigger and broaden their horizons.
Technology as a Catalyst
In Pakistan, digitalisation has taken place at a very high pace. This speedy transformation has been significantly helpful in the growth of startups. The availability of mobile gadgets, especially cheap smartphones, and the availability of internet connections have led to the emergence of a growing digital economy. Presently, over 120 million people, out of a total population of 220 million, have access to the internet, leading to a consumer base larger than the supplier’s ability. This leaves ample space for startups to grow, as the consumer is ever-present.
This digitisation has been particularly impactful towards sectors like e-commerce, fintech, health-tech, etc. An example of this is the emergence of Daraz, a platform that has grown to be representative of online shopping in Pakistan. Similarly, the emergence of Jazzcash and Easypaisa has changed the way of handling money for the layman. This growth has paved the way for comfort and attainability for millions of citizens, further proving the potential that Pakistan has for development in the digital era.
The Role of Funding and Investor Confidence
The expansion of funding is an important factor contributing to this growth. In 2021, over 350 million USD were invested in the business market in Pakistan. Sequoia Capital and Kleiner Perkins are some of the global investors acknowledging Pakistan’s growth potential through investment.
While the importance of corporate backing cannot be understated, support from local investors and government institutions is equally important. Initiatives such as the NIC and Plan9 have benefitted entrepreneurial inspiration in the form of mentorship, increased access to resources, and facilitation in networking.
Government Support and Reforms
Entrepreneurship leads to positive change; therefore, initiatives like the Kamyab Jawan program and Startup Pakistan have been launched by the government in order to support the youth in launching businesses. These programs provide support to businesses in the form of sponsorships, finances, improved training, and technical support. Similarly, the herd immunity and tax benefits for new companies, coupled with measures taken to manage the relative business environment, have also pushed the wheel of innovation in the Pakistani market.
On the contrary, the lack of a strong legal framework, specifically in the field of intellectual property, is a persisting problem in the system. Therefore, it is crucial to create more definitive policies in order to shield innovation and encourage sustainable investment.
Challenges on the Road Ahead
The major barriers surrounding Pakistan’s start-up ecosystem include the lack of availability of funds, particularly in the more far-fetched regions, as the metropolitan cities like Lahore, Islamabad, and Karachi end up scoring most of the funding. This creates a geographical balance that hampers the generation of new ideas in the form of products and services in lesser-known towns and villages. Furthermore, the general business environment is also unfavourable, as petty problems like bureaucratic red tape and poor communication regarding taxation barre new ventures from entering the market. Similarly, a majority of the population comprising youth translates to a lack of experience, leading to a gap in the business industry. In these conditions, schools, colleges, and universities must focus on providing a holistic education that prepares the next generation for an innovative world of business.
In conclusion, the start-up culture in Pakistan is creating employment for the youth, rearranging the masses’ perception of the entrepreneurial environment, and creating bold solutions to the age-old problems in the market. The increase in international investors shows a promising future for the Pakistani business environment. It remains to be seen how the stakeholders deal with the drawbacks of the market.