Businesses in Pakistan should focus on imitation instead of innovation to achieve higher growth, said Dr Ishrat Husain, Dean and Director of the Institute of Business Administration (IBA), while addressing a conference on corporate innovation and entrepreneurship organised by the MIT Enterprise Resource Forum of Pakistan on Saturday.
Citing the example of Japan and South Korea, Husain said the imitation of successful business practices should be followed by a gradual transition to innovation.
He said personal and family-owned businesses generated 62% of total employment in Pakistan. “Even a 10% increase in their productivity will have a significant effect on GDP (gross domestic product).”
Saying that owners of many small businesses did not even realise the difference between revenues and profit, Husain added that efforts should be made to educate the proprietors of existing businesses to increase their productivity. “We once helped a tailor properly cost the shirts he sewed. He multiplied the number of machines and labour he employed in a short time.”
Speaking on the occasion, Dr Iqbal Khan, senior fellow of entrepreneurship at the Lahore School of Economics, said aspiring entrepreneurs should learn from both successes and failures of others. “Entrepreneurs have a lot to learn from failures. Failures shouldn’t be unacceptable. Failed entrepreneurs are unsung heroes.”
He called for a ‘paradigm shift’ in the government’s education policy, saying entrepreneurship should be taught at school so that children knew that opportunities existed beyond regular professions like medical and engineering.
He said business schools should encourage their students to do internships at small and medium enterprises to get a better understanding of how a typical business functioned.
Participating in the panel discussion, LUMS Professor Dr Syed Zahoor Hassan said many business students lived in a ‘virtual world’ and had little idea of the world beyond the college campus.
Hassan said the mandatory course on entrepreneurship at LUMS had now been made elective because not every business student was destined to be an entrepreneur.
He added that LUMS not only allowed, but also encouraged, its faculty members to engage in entrepreneurial activities so that they could teach business students better.
Dawood Foundation CEO Sarfaraz Rahman, who led Engro Foods for six years, said celebration of success stories encouraged budding entrepreneurs to take up new challenges and show their mettle.
He said he gave his team members at Engro Foods complete freedom to take risks. “I’d tell them if they fail, it’ll be my neck which will be on the line, not theirs. The results were tremendous.”
Published in The Express Tribune, December 18th, 2011.