Entrepreneurial Mindset in Pakistan

• Asif Maqbool
• Muhammad Rasheed

Entrepreneurship as a whole contributes to social wealth by creating new markets, new industries, new technologies, new institutional forms, new jobs and also increases real productivity. The jobs created through entrepreneurial activities in turn lead to an equitable distribution of income that culminates in higher standards of living for the population. This ensures equality in society and reduces status gap between different income groups. In this way, the resources available to the government likewise increase and hence enable it to offer social services like hospitals and schools, develop infrastructure, and keep law and order.

For over a century there has been a positive trend in economic activity around the globe. All the developed industrialized countries have progressed by nurturing entrepreneurship.  More recent studies have confirmed this result for most of the developing countries as well in the 1970 and 1980s. The empirical evidence clearly showed that the firm size distribution in developed countries began to shift away from larger corporations towards entrepreneurial activity. Furthermore, in developing economies entrepreneurial activity is positively related to economic development. As people shift from wage work to entrepreneurial activity, the entire culture of society and economy changes.

It is considered the prime responsibility of public sector to provide job opportunities to citizen and currently in Pakistan; nationals hold maximum number of the jobs in public sector. Public sector jobs are virtually lifelong jobs; offer excellent compensation packages and as a result are highly sought-after. A similar situation exists in the semi-private sector. This sector consists of large companies and offers excellent work conditions and compensations even better than the government sector. As a result, the average Pakistani has slowly lost his traditional preference for independent business activity. As such, we see people wandering in search of these public and private sectors jobs instead of initiating their own business ventures.

Entrepreneurial activity is viewed as a risky way of earning one’s living and has lost social approval. This is particularly true in Pakistani society where household head has got all the responsibility of family. However, in the business field, Pakistan has a culture of family business, which mainly concentrates on trading. A part from trading, other business activity has traditionally been restricted to the production and distribution of food items. Considerable effort is necessary, therefore, to develop a new mindset and a class of individuals who are prepared to examine the economic environment critically and creatively, move from trading to industry and have the courage to take calculated business risks. This is more useful for the persons who have skills and capabilities which can be used productively for them selves and for their country as well.

In this changing trend of entrepreneurship, youth must be encouraged and acknowledged. This may be a right strategy for our country because a fair majority of population belongs to young age people. However, in order to promote this culture, relevant constraints should be addressed. The constraints that young entrepreneurs in Pakistan face range across a number of topics. The most frequently encountered obstacles are the bureaucratic procedures in starting a business and corruption in the relevant government offices, both of which take time to overcome and increase the cost of starting a business. Other problems include inadequate infrastructure, which raises the cost of doing business, and risk of political instability, which specifically affects the tourism industry. The greatest impediment to entrepreneurs in a country like Pakistan is the lack of a culture that appreciates entrepreneurship’s role.

Unemployment is a menace for any country including Pakistan. This is such an economic disruption which leaves productive potential of the country untapped. The problem of the developing countries is the lack of resources due to which these cannot generate enough economic activity to accommodate all citizens. The government hopes to achieve a middle-income status for the population, but it cannot do this by creating jobs for all unemployed youth. The private sector will go a long way in reducing unemployment if the economic conditions are conducive to growth, but it may not be enough. Entrepreneurship is the key to increase youth employment and income levels for population of the country. America is a good example of how entrepreneurship can move a country, as its booming entrepreneurial sector is responsible for much of its relative economic prosperity. The U.S. is one of the most entrepreneurial nations because Americans believe that they have opportunities to start businesses and that their culture respects entrepreneurship as an occupation.

Promoting an entrepreneurial culture should be a top priority for policy makers. In this regard, first step should be to increase the availability of information about entrepreneurship. Additionally, the education system should be reformed to give individuals a good combination of specialist and generalist skills. The main doctrine of entrepreneurship should be a required course for all students so as to equip them with skills like writing a business plan, preparing a proposal to present to investors, the steps necessary to register a company, general accounting and other important business skills. In order to do this, the Pakistan government must stop trying to feed people fish and instead teach them how to fish.

To promote this culture, the government and the private sector should work together to put in place measures that foster mobility between universities and the private sector in order to transfer knowledge and ideas, facilitate the entry of new participants with innovative ideas, and foster a culture that encourages risk-taking and accepts failure as permissible social and individual norms. The government should also emphasize the importance of institutions in building a stronger culture of entrepreneurship.

Entrepreneurs should be rewarded for contributing to economic growth. Furthermore, governments should increase the use of technology for efficient service delivery. One important way to do this is by putting most of the processes it takes to start a business online and establishing a one-stop place for registering a company. This will ultimately reduce the time needed to start a business and make it harder for civil servants to engage in corrupt activities. The educational system should also give individuals the skills to deal with constant change. Lastly, the potential contribution of women entrepreneurs cannot be ignored. Unique opportunities should be created for women entrepreneurs to network and get the support they need to grow businesses.

Last but not least, an important avenue for introducing entrepreneurial culture is agriculture in Pakistan. No doubt, the very base of the country’s economy is agriculture or related industry. The interesting and attracting point in this sector is that agriculture is a source of supply for many industries whereas at the same time act as major market for many industries. Overtime, we also have lost our culture and traditions related to agribusiness. Moreover, many people have indigenous knowledge which must be documented. In this context, our farmers, young agrarians and female counterpart should be encouraged to show their skills. Government should come ahead to support their budding business activities whereas private sector should extend helping hand by offering contracts and services. Entrepreneurial culture can bring a revolution in Pakistan; we all are waiting for since long.