Entrepreneurs are vital to the economy because of their unconventional thinking, ability to innovate, take calculated risks and create jobs. By definition, entrepreneurship is both the study of how new businesses are started and the actual process of starting a new business. The potential for entrepreneurship is great among young people as they have the energy and drive to be successful and they are often more open to new ideas than older people.
Young people are more likely to take risks, which can, among other things, lead to new and innovative companies. Governments around the world recognize that youth can stimulate entrepreneurship in young societies. Schools, colleges and universities are also exploring ways to educate young minds and encourage them to explore entrepreneurship as a career alongside traditional job markets. Pakistan is no stranger to this concept.
Fouad Bajwa, the CEO and co-founder of the Digital Dera Climate Smart Villages Network, says the potential of youth as an entrepreneurial opportunity is enormous. “There are many programs and resources for young people interested in starting their own business in Pakistan.”
The Higher Education Commission (HEC) has also promoted and encouraged universities to take concrete action to promote entrepreneurship education among students in higher education. Among them, it has set up research, innovation and commercialization offices and incubators. National Incubation Centers (NICs) have been set up across the country by the IGNITE R&D Fund and the Department of Information Technology in collaboration with the private sector and academia.
In order to encourage youth and help them succeed in their entrepreneurial journey, a few factors need to be considered. These include age, level of education, professional experience, financial situation, personal and professional networks and entrepreneurial mindset.
In addition, the opportunity itself, for example the business idea, the product fit, the market, the competition, the initial investment must be taken into account. Young minds often need mentoring or have role models who can offer them orientation and support. You need help in developing a clear and actionable business plan, taking into account market realities. Passion for ideas, the will to work hard and the ability to build a strong network of contacts are also crucial.
One hurdle in the process is that banks are still not providing unsecured income-tested loans to the youth. They prefer to give out auto loans and personal loans, but not start-up loans. Banks remain conservative in promoting funding for young entrepreneurs. There are limited capital resources in the youth market. The situation has not improved significantly despite the Kamyab Jawan program.
Economist Qais Aslam says that entrepreneurs always take risks. Technically, he says, all small businesses fall into this category. He says the rise in petrol and gas prices, interest rate hikes, high sales tax, escalating electricity tariffs, Etc., have weighed heavily on companies. This situation is discouraging for entrepreneurs.
“Therefore it is requested that the government offer a special relief package for entrepreneurs to allow them to work on their ideas. Government officials have said many times that entrepreneurship is the key to economic growth and job creation.”
according to dr Aslam, around 30 percent of Pakistan’s 230 million inhabitants are children under the age of 18. Another 30 percent are young people under the age of 30. In other words, Pakistan has almost 140 million young people.
However, most youth are uneducated and unskilled. Even educated people have very little scientific thinking.
On the other hand, young people are “street smart” and have entrepreneurial potential. All they need is some basic finance and a direction towards market access. You can sell anyone anything.
“I believe Pakistan’s economic future lies in its entrepreneurial youth, but they need to educate themselves about quality; understand legal ways of doing business; and should have training in accounting. In this way they can transform the economy of a developing country into an economy of a developed country. Show them what is in demand around the world and they will deliver.”
Sajid Latif, Director General for e-Governance at the Punjab Information Technology Board says: “Pakistan is a country with a large young population. This, combined with high digital adoption rates and fewer job opportunities for the youth, provides an ideal basis to make the entrepreneurship argument.”
He says that during an economic downturn, or even during something like the current floods, countries need to try to reinvent themselves, look to the future and support the creation of new innovative industries to spur economic growth. “An innovative start-up ecosystem that learns from the journey of developed countries is essential to boost economic development.” This, he says, requires appropriate local universities, mentors, state and municipal support, investors, infrastructure and most importantly problems to solve. Latif says that as a rapidly growing developing country, Pakistan meets all of these criteria.
“However, developing a robust entrepreneurial ecosystem is not as easy as it sounds; All components have to work together like a well-oiled machine.”
Latif says Pakistan’s startup ecosystem has huge potential. He says this is reflected in the fact that local startups raised more than $285 million in total in the first six months of 2022. In this context, PITB’s start-up programmes, including Regionalplan 9, are playing their role in promoting entrepreneurship among youth and have so far completed 420 start-ups. These have raised $50 million in investments and created more than 3,500 jobs.
Plan 9 will shortlist potential entrepreneurs from across the country and provide them with the space and necessary facilities to develop their ideas. Those who qualify are introduced to investors who can raise money to support the theme a team has been developing. This type of investment is called Angel Funding. It helps market the idea, set up offices and cover other expenses needed to start a business.
“That’s just the tip of the iceberg. The potential of the local startup system can be increased many times over with the active participation of youth,” he adds.
The author is a staff reporter and can be reached at [email protected]