Entrepreneurship Inculcates Prosperity
Dr. Abdus Sattar Abbasi
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 the poverty, according to current standards, is the result of 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 the society over the years. Small scale entrepreneurs are vital drivers of China’s economy; they constitute 60% of GDP, provide 80% 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. 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% of all businesses in the EU.
The website further states, “SMEs employ around 100 million people, account for more than half of Europe’s GDP and play a key role in adding value in every sector of the economy. SMEs bring innovative solutions to challenges like climate change, resource efficiency and social cohesion and help spread this innovation throughout Europe’s regions.
They are therefore central to the EU’s twin transitions to a sustainable and digital economy. They are essential to Europe’s competitiveness and prosperity, industrial ecosystems, economic and technological sovereignty, and resilience to external shocks.”
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, 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 internal locus of control to experience and testify their unique ideas.
It is, however, not a straightforward undertaking to mobilise entrepreneurial mind-set in a conservative society such as ours. There is a need to encourage working age people to take risk of establishing new ventures to realise their dreams of independence and self-actualization. Nevertheless, it needs training and development on one end and an appropriate startup ecosystem on the other. We can witness turnaround if we perform appropriately on training and development front to the targeted segments both in terms of human resource and potential sectors. Two recent events strengthened my believe that our young generation, especially women, has enormous potential to foster entrepreneurship in the society. The first is the project titled “Financial empowerment of women through entrepreneurship in Pakistan” in collaboration with Cardiff University UK and ACF UK funded by Higher Education Funding Council for Wales. We enrolled 24 women and delivered a training for three weeks followed by mentoring sessions to develop their respective business plans which they eventually presented to a few high-net-worth-individuals, corporate executives and academics in showcasing event at the end of the project. It was pleasant surprise that a participant visited me after a month and shared her success story of selling specially designed mask and matching headscarf through a social media campaign, her enthusiasm was amazing. The second is my recent visit to Pakistan Institute of Fashion and Design where I delivered a lecture on importance of entrepreneurship to final year students. A hall full of participants, most of them were female students, took keen interest in the subject and expressed desire to learn more about startup ecosystem of the Country.
According to a recent study Pakistan needs to create 1.3 million additional jobs on average every year till 2035 to cater 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 in Global Innovation Index is 107 two points down from last ranking. It means we cannot expect innovative breakthroughs quite often on entrepreneurial front. But there is huge potential even in replicative entrepreneurship for Pakistan in several segments. Unique selling propositions coupled with compliance to standards can open innumerable doors for Pakistani startupsin both local and international markets. Survival rate of new business is around 50 to 60 per cent globally; however, interestingly it is around 80 per cent in Pakistan according to a study conducted in 2016. Factors of failure in Pakistan include inability to access capital, absence of appropriate business plans and avoidance of partnership. These factors clearly indicate lack of awareness and training. There are quite a few venture capital firms and individual & syndicate angel investors who are investing in Pakistani startups. According to a report Airlift raised USD 12 million and Bykea USD 13 million in 2020 while overall 28% of venture capital invested in transport industry. In terms of number of deals e-commerce ranked first followed by FinTech. In Pakistan, generally, entrepreneurial initiatives lack appropriate training and development support. Mostly people 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 business plans from vision & mission to market analysis, survival income estimates, startup finance to growth aspirations. Therefore all those who desire to realise their dreams through entrepreneurship should look around themselves for possible mentoring opportunities focusing websites of relevant organizations. 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 the collaboration which multiplies chances of success and faster growth. Hence it is necessary for aspiring entrepreneurs to welcome partnership opportunities, adopting necessary regulations, in terms ideas, expertise, finance, and facilitations to bring synergy in their operations.
Currently Pakistan stands at 120 on the Global Entrepreneurship Development Index (GEDI), while India at 68 and China at 43. It is our belief as Muslims that nine out of ten sources of income come from business activities while honest and sincere businessman will be placed with prophets, siddiqin and al-shuhada. This faith requires genuine commitment from all stakeholders to cultivate entrepreneurial culture in the society with enabling environment. The key role of the government remains vital to develop nurturing ecosystem to flourish entrepreneurship in the Country. Initiatives such as ITBs, NICs and Ignite are worth appreciating but ignoring other sectors are damaging for equitable progress of the Nation. The government needs to develop sector-wise incubation centres and sector specific funds to seed startups in every sector of the economy.The bottom line remains, the promotion and facilitation of entrepreneurial culture in the society is inevitable for prosperous future of our coming generations.
Dr. Abdus Sattar Abbasi
Associate Professor Management Sciences
Head,Center of Islamic Finance
COMSATS University (CUI) Lahore Campus firstname.lastname@example.org
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