Entrepreneurship revolution – the one we need

Country should think critically and study the requirement of skill sets.

KARACHI: In Pakistan, the call for revolution is echoing for the past around one month in the form of Azaadi and Inqilab marches and protest sit-ins in front of parliament. Imran Khan and Tahirul Qadri are forcefully talking about changing the prevailing socio-political system.

However, the nations around the world are trying to bring a different kind of revolution, the “entrepreneur revolution”. The government, private sector and the citizens are all part of this revolution.

America, known for its “American dream”, supports the entrepreneur eco-system. Let’s look into what other countries are doing.

In Latin America, the governments of Brazil and Chile have outlined policies to support business startups. Brazil will spend $78 million on private startups, of which 25% can be from outside the country.

Startup-Chile is a programme inviting early-stage entrepreneurs from all over the world. On the selection of their innovative ideas, Chile will give them temporary residential and financial support.

Turkey is also working on developing an entrepreneur eco-system by offering foreign individuals concessions on setting up their companies as well as tax credit.

Dubai has launched EntrePass, a special visa for entrepreneurs with the help of which they can set up businesses on a fast track.

According to the World Bank’s International Finance Corporation report on Ease of Doing Business in South Asia, amazingly Pakistan stands third after Sri Lanka and the Maldives. India, which is a prospering economy, is on the sixth place.

It means that Pakistani legislations and processes are much better across the region for beginning a business. However, in developing economies, the private sector cannot develop a dynamic and sustainable eco-system on its own and needs the support of the government. Let’s look into the initiatives taken by the Pakistani government.

Youth loans

The Prime Minister’s Youth Loan Programme has been introduced to offer loans to new entrepreneurs. It can bring about a change in the economy if borrowers are added to the tax net.

At present, only 9% of them have the National Tax Number (NTN), even though it is the first prerequisite to opening a business account. This shows that banks give loans without meeting the key condition because of political pressure. As a result, the national coffers do not receive any taxes as people are not registered with the tax system.

In the second round of balloting for the youth loan programme, 5,196 loans were awarded, of which around 4,000 (78%) were given in Punjab, where 53% of the country’s population lives.

However, Sindh got a share of 7% whereas Balochistan, which requires development efforts the most, received only 1.4% of loans. This indicates that the loan programme is being run on the basis of political considerations and it only rewards people that belong to the region where the PML-N, the ruling party, has the major support.

Small enterprises

The Small and Medium Enterprises Development Authority (Smeda) has been working for the last 16 years, but its performance is not different from other public sector organisations.

SMIDEC (now SME Corp) Malaysia, which also came into being around the same time, is running more than 17 dedicated programmes across the country, going beyond pre-feasibility and educating entrepreneurs via structured programmes. In Pakistan, Smeda is still distributing decade-old cut flower business plans.

The government’s Vision 2025 promises a massive skill development programme to assist the SMEs, but we don’t see any urgency in this regard. The prime minister’s vocational training programme, introduced recently, envisages training 25,000 people in 25 different categories like welders, motorcycle mechanics and beauticians – skills that are already there for decades.

Keeping in view all this, the country needs to think critically on visionary terms and study the world’s requirement of skill sets, so Pakistan can export services globally.

For example, NAVTTC should announce, with the help of public-private partnership, an extensive training programme for mobile phone app development or training for technicians in the field of oil and gas exploration and production.

The country desperately needs an entrepreneur revolution in both public and private sectors, away from the political turmoil and with a consensus that no matter which government is in power, the revolution must be brought. That is the only revolution we need, right now.

If you don’t agree, look around and find out where your neighbours are headed.

The writer is the founder of a few startups and COO of a marketing agency 

Published in The Express Tribune, September 15^th, 2014.

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Correction: In an earlier version of this article, the writer had mistakenly identified Umar Saif, chairman of the Punjab Information Technology Board, as an angel investor for Plan 9 companies. Plan 9 has clarified that Saif is not an angel investor in any of the resident companies and his name was wrongly placed on their website.