KARACHI: Some of the current giants in the global corporate sector that have led to product and technology innovations had a very humble beginning where young students turned their ideas into viable businesses by initiating ventures while working from their dormitories. Some of such companies include Google, Apple and Microsoft.
The idea of Google originally came in 1995 from two Stanford students who initiated a research programme to develop mathematical knowledge for worldwide web. They started their project in the student dormitory and now Google is a global technology giant and is in the list of world’s most valuable brands.
The current market capitalisation of Google is $360 billion which is more than the GDP of Pakistan.
Similarly, Apple was established by Steve Jobs in 1976 in his parent’s garage. Today Apple tops the list of world’s most valuable brands with market capitalisation at $750 billion. There are quite a few other such examples.
With the success of young entrepreneurs, there is a realisation in policy circles to harness their energies for leading innovation and new business ventures. This has led to the proliferation of business and technology incubators for mentoring and nurturing the ideas of students and young entrepreneurs for business start-ups.
In the US, there are more than 300 such incubators that attract the best and brightest to try their luck with entrepreneurship.
The incubators provide a host of services that include capacity building, legal and sectorial services, office space and equipment, especially for technology entrepreneurs. These incubators are also linked with venture capitals for funding needs of the start-ups.
The EU is also catching up with the US with more focus on technology incubators and developing linkages between universities and industries.
The business and technology incubators are now indispensable tools in the EU’s entrepreneur and innovation policy. The EU has been very successful in transferring the R&D through public funds to general use through the business incubators that has facilitated scientists to commercialise their innovations through business ventures.
India is also facilitating business and technology incubators, especially in the IT sector. Its government has established IT incubators in 34 cities where entrepreneurs are being offered a wide variety of support in the form of seed money, shared office space and capacity building.
Brain drain from Pakistan
The idea of business incubators is also gaining popularity in Pakistan where 30 such facilities provide shared office space, mentorship and capacity building to help entrepreneurs kick-start business projects.
Despite these initiatives, top graduates from leading universities still prefer to go abroad in the hope of joining global firms. This has led to brain drain which has serious consequences for socio-economic development of the country.
For policy-makers in Pakistan though the brain drain leads to a considerable loss of skilled and qualified professionals to global marketplace, it brings valuable foreign exchange through worker remittances. Last fiscal year, Pakistanis working abroad remitted $18.4 billion which provided a lifeline to the balance of payments position of the country.
There is an increasing realisation in policy circles to strike a balance between addressing the brain drain and tapping the remittances of Pakistanis working abroad.
Some of the educational institutions in Pakistan are producing outstanding professionals. Limited opportunities in the domestic market and limited space for entrepreneurship compel them to seek employment opportunities abroad.
Here the technology and business incubators can play a meaningful role in supporting the fresh graduates with innovative ideas for business ventures.
Funds are also a must
Experts believe in an economy like Pakistan with limited funding options for business start-ups, the establishment of incubators may not be sufficient to spur entrepreneurship. It would also require equity and venture capital to take risk and fund innovative and risky ideas.
The other important element in the success of technology incubator is the R&D capacity of the academic institutions. The business incubators attached with science and technology institutions have helped scientists commercialise their research and innovation and has been a motivating factor for them.
With the launch of 3G mobile connectivity, there is optimism about the prospects of e-commerce and e-business in Pakistan. A number of firms have taken the initiative and are gaining popularity especially in the business to consumer marketplace.
Pakistan is at a point where the US and Western Europe were in the late 90s when the internet and e-commerce were gaining popularity.
The policy-makers should contemplate measures that can facilitate Pakistani tech entrepreneurs in nurturing their business ideas into viable businesses. One of the viable options could be the availability of seed money through public resources. This is a popular policy option in a number of countries where public funds are provided through business plan competition.
The successful applicants are then provided options to join one of the designated business incubators for a specific time period where they can nurture their ideas into viable businesses.
Entrepreneurship can stimulate economic growth and employment generation. The technology and business incubators have an important role in developing entrepreneurship.
The writer is a development professional with over 20 years of experience in public and development sectors
Published in The Express Tribune, January 4th, 2016.