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Emerging Entrepreneurship in Pakistan

Posted on September 27, 2007
Filed Under >Babar Bhatti, Science and Technology
34 Comments
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Babar Bhatti

In the last few years the entrepreneurial class in Pakistan has been on the rise – for the very first time I’d argue. This trend has been recognized by the media both in Pakistan and abroad as well as by quite a few bloggers. The interesting thing is that the trend of rising enterpreneurship continues inspite of the growing political challenges and unstable business environment. Wall Street Journal recently wrote about it as well. Here we take a look at some of the successes, what is driving them and the existing support structure for these innovative group.



There was a time not too long ago when the only three successful career options used to be engineering, medical or civil service. The lure of ‘Sarkari Nokri’ (Government Jobs) and climbing the grade ladders was overwhelming. There were few multinational companies (MNCs) around. Those who wanted to do something different usually went abroad to try out their luck. Then in the 90s we witnessed soaring IT demand and the shift towards offshore outsourcing for services. Computer science became the new popular field of choice. The telecommunication boom of the recent years has provided many exciting opportunities.

Evidence:

Let’s talk about a few of the new breed of young entrepreneurs. Due to my own interests this is going to be limited to technology. I am not discounting other areas of active entrepreneurial activities. In fact the entertainment and fashion industries – and to some extent business about lifestyle – have gone through a tremendous transformation; but that is a topic which someone more qualified should write about.

Examples of successful new companies come from all over but I’ll categorize them based on geography. Some of these companies are based in US and may have operations in Pakistan [Scrybe, Pix Sense, Peanut Labs, Mobile complete, Techlogix, TRG, Cavium Networks] – they have successfully tapped the venture capital market of the US which is well-known to provide funding for promising new ideas and products. Other successful startups are local to Pakistan [NetSol, Rozee, Alchemy, Inov8, BrightSpyre]. Some Pakistani entrepreneurs have identified gaps in the Pakistani market space and are importing business models from abroad [Lootmaar, Naseeb.com] – its all about opportunities in the nascent booming market.

What are the drivers of this trend? For one thing the advances of the information age have encouraged innovation everywhere regardless of location. Technical Advances in communication (Internet, cheaper calls, blogging, online collaboration) allow companies and individuals to leverage resources around the globe. There is also an important factor of expat/diaspora involvement where the expats want to give something back and utilize their skills back home. All this is paving the way for the world to take a second look at Pakistan as a major market (Pakistan is the third largest growing country for mobile phone subscribers) and a viable outsourcing destination.

Support:

Do we have a venture capital system, Silicon valley style in Pakistan? Far from it. But VCs from US are accessible to those players who have the right setup, as I mentioned above. In particular expat Pakistanis have started paying attention to the opportunities back home, very much like their Indian and Chinese counterparts. The patent laws and intellectual property are not at par with the international standards/expectations. On the other hand there is plenty of activity in Pakistan to support and educate the upcoming entrepreneurs. Incubators such as Folio3 are playing an important role in nurturing and establishing startups. Events such as TIECon 2007 with the Business plan challenge (won by LUMS) serve as an important networking and learning resource. Organizations such as OPEN have also extended their network and support to startups in Pakistan. A good example is the Business Acceleration Program which is sponsored by OPEN and MIT EF Club of Pakistan. Hopefully our schools/universities will latch on to this trend and foster the innovative spirit of students.

I do not think (I could be wrong) that traditional media outlets in Pakistan have contributed as much as they should have in this area. However the social networking – whether its through the Internet or mobile phones – is making its impact felt. Even with a small number of active online users the blogger community in Pakistan has been doing quite well. The word of mouth referrals and viral marketing is very much relevant in Pakistan. As an example, a debate was recently triggered among bloggers with interest in entrepreneurship (see here, here and here) about choosing the traditional career path of working for a well-established company or going independent with one’s own ideas.

Related Excerpts:

1. From Wall St Journal: In Turbulent Pakistan, Start-Ups Drive a Boom
Many critics also contend that substantial amounts of U.S. assistance — estimated at more than $1 billion a year — may be the biggest underlying reason why Pakistan’s economy is doing well. But the economy is also sprouting from the bottom, thanks to seed capital from abroad and more credit-friendly banks. Last fiscal year, Pakistan received a record $5.1 billion in foreign direct investment, the government says. Overseas remittances, which are what Pakistanis are returning from bank accounts overseas, hit $5.5 billion in the same period, also a record.

2. Issues and Challenges: lack of skilled resources, political situation in the country. From the BBC Article ‘Pakistan raring to go in IT sector’. Pasha’s Ashraf Kapadia on IT skill shortage.

“At the moment, we just have adequate number of people to meet the industry’s demands. If we continue with our current rate of growth, we would need another 25,000 people over the coming year. We can get about 2,000 from Tier-1 universities like Lahore, Karachi and Islamabad, and another 10,000-15,000 from other universities. But more needs to be done to ensure that skilled people are available to meet the demand of new work.”

Links and References:

(1) BBC South Asia
(2) Telecompk.net
(3) Wall Street Journal [Registration Required]
(4) jehanara
(5) Venturebeat.com
(6) NED to NADAQ
(7) Ravi.LUMS.edu.pk
(8) Greenwhite.org

Photo Credits: kauonetwo and !!sahrizvi!! at Flickr.com

34 comments posted

Comment Pages: [5] 4 3 2 1 » Show All

  1. Muhammad Azam says:
    March 8th, 2011 12:21 pm

    thanx 4 ur accomodation……….!

  2. Aziz Khan says:
    June 30th, 2009 11:13 pm

    Thanks for the post, Babar. I strongly believe that the way out for Pakistanis is to have more entrepneuers than “employees”. I would love to partner with anyone for my Future Entrepneurs of Pakistan project. You can learn more about visiting http://groups.google.com/group/FEofPakistan or my linkedin at http://www.linkedin.com/in/khanaziz.
    Thanks,

Comment Pages: [5] 4 3 2 1 » Show All



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