Report indicates increased activity in the province. PHOTO: FILE
KARACHI: Among the four provinces of Pakistan, Balochistan has the highest percentage of residents, who expect to start a business within the next three years, according to the Global Entrepreneurship Monitor (GEM) 2011, which was released in a ceremony at the Institute of Business Administration (IBA) on Wednesday.
About 36.3% people in Balochistan reported that they expected to set up a business in the near future in contrast to 34% in Khyber-Pakhtunkhwa, 26% in Sindh and 23% in Punjab, the study said.
The study was carried out in 54 countries of the world to gauge entrepreneurial attitudes, activity and aspirations besides uncovering factors that determine the nature and level of entrepreneurial activity in a nation.
While 32.2% Pakistanis said they personally knew someone, who started a business in the past two years, the percentage of such people in Balochistan was 42.2%, highest among all provinces, reflecting the increased entrepreneurial activity going on in Balochistan.
Similarly, while 39.7% people reported on a national level that good start-up opportunities existed where they lived within the next six months, the percentage of Balochistan-based respondents with awareness of start-up opportunities in their neighbourhood was 56.6%.
Moreover, 85.1% people in Balochistan think that those successful in starting a new business have a high level of status and respect in society as opposed to the people of Punjab, for example, where 67.3% people relate entrepreneurship with status and respectability.
The report says that the number of people in Pakistan with a positive attitude towards entrepreneurship is less than the average of its factor-driven peer economies, which depend on subsistence agriculture and extraction of natural resources.
The total early-stage entrepreneurial activity (TEA) rate, which is the sum of nascent entrepreneurship rate and new business manager rate, in Pakistan is 9%, according to the GEM 2011 report.
This is lower than the average TEA rates for the factor-driven economies (14.2%) and efficiency-driven economies (13.8%), which have a higher degree of industrialisation and economies of scale.
However, Pakistan’s TEA rate is greater than the average TEA rate of innovation-driven economies (6.9%), which are research-oriented with expanding services sectors.
Given that the TEA is classified into two types – opportunity-based TEA and necessity-based TEA – roughly 4% of Pakistanis are involved in opportunity-based early-stage entrepreneurial activity, the report says, which is considerably less than the average of factor-driven economies (8.5%) and efficiency-driven economies (9%).
The male TEA rate in Pakistan is more than eight times that of the female TEA rate. The gender gap is pretty high as compared to other factor- and efficiency-driven countries.
The report says that the established business ownership (EBO) rate in Pakistan is 4%, which is lower than the average EBO rates for Pakistan’s peer factor-driven (6.2%), efficiency-driven (7.5%) and innovation-driven (7.2%) economies.
Also, the report states that over 9% of the adult population in Pakistan is trying to start a business (nascent entrepreneurs) – a ratio that is lower than the average of factor-driven economies (14.2%).
Speaking on the occasion, IBA Dean and Director Ishrat Husain said the findings of the GEM report would help policymakers devise better strategy to understand the dynamics of entrepreneurship in Pakistan.
“It’s heartening to know that some people still pay attention to research,” Husain said, adding that most guests on TV shows express strong views, which are based on emotions rather than empirical evidence.
Published in The Express Tribune, January 10th, 2013.
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