Entrepreneurial potential

Young people have the energy, drive, ability to take risks and are open to new ideas

Entrepreneurial potential


ntrepreneurs are crucial to the national economy because of their out-of-the box thinking, ability to innovate, take calculated risks and create jobs. By definition, entrepreneurship is both the study of how new businesses are created and the actual process of starting a new business. The potential for entrepreneurship is rich among the youth as they have the energy and drive to succeed, and they are often more open to new ideas than older people.

The youth are more likely to take risks, which, among other eventualities, can lead to new and innovative businesses. Governments across the globe are realising that the youth can stimulate entrepreneurship in young societies. Schools, colleges and universities are also exploring the possibilities of educating young minds and encouraging them to explore entrepreneurship as a career in parallel to traditional job markets. This concept is not foreign to Pakistan.

Fouad Bajwa, the CEO and co-founder of Digital Dera Climate Smart Villages Network, says the potential of the youth as an opportunity in entrepreneurship is vast. “There are many programmes and resources available to young people who are interested in starting their own businesses in Pakistan.”

The Higher Education Commission (HEC) has also been promoting and encouraging universities to take concrete measures to promote entrepreneurial education among students in higher education. It has established offices of research, innovation and commercialisation and business incubators under them. National Incubation Centres (NICs) have been established across the country by IGNITE R&D Fund and the Ministry of Information Technology in collaboration with the private sector and centres of higher education.

To encourage the youth and help them find success in their entrepreneurial journeys, some factors need be considered. These include the age, the level of education or training, work experience, financial situation, personal and professional networks and the entrepreneurial mindset.

Additionally, the opportunity itself, for example, the business idea, the product fit, the market, the competition, initial investment must be taken into account. Young minds frequently need mentoring or have role models that can provide guidance and support. They need help in developing a clear and achievable business plan keeping in mind market realities. Passion about ideas, will to work hard and the ability to build a strong network of contacts are also crucial.

A hurdle to the process is that banks still do not provide the youth with non-collateral revenue-based loans. They prefer providing car loans and personal loans but not business start-up loans. Banks remain conservative in terms of promoting financing for youth entrepreneurs. There are limited capital resources in the market for the youth. The situation hasn’t improved much despite the Kamyab Jawan programme.

Economist Qais Aslam says that entrepreneurs are basically risk-takers. Technically speaking, he says, all small businesses fall in this category. He says the increase in petrol and gas prices, interest rate hikes, high sales tax, power tariff escalation, etc., have put businesses under severe burden. This situation is discouraging for entrepreneurs.

“It is therefore requested that the government offer a special relief package for entrepreneurs so that they can work on their ideas. Many a time, government representatives have said that entrepreneurship is key to economic growth and job creation.”

Dr Aslam says around 30 percent of Pakistan’s 230 million population are children below the age of 18. Another 30 percent are the youth below the age of 30 years. In other words, Pakistan has almost 140 million young people.

However, most of the youth are uneducated and unskilled. Even those that are educated have very little scientific thinking potential.

On the other hand, he says, the youth are “street smart” and have entrepreneurial potential. All they need is some basic finances and a direction to market access. They can sell anything to anyone.

“I believe that the economic future of Pakistan is its entrepreneurial youth but they need to educate themselves about quality; to understand legal ways of doing business; and should have some training in accounting. This way they can transform a developing country economy into a developed country economy. Show them what is demanded around the world and they will supply it.”

Sajid Latif, the e-governance director general at the Punjab Information Technology Board, says: “Pakistan is a country with a large young population. This coupled with high digital adoption rates and fewer employment opportunities for the youth provide an ideal ground for putting forward the case of entrepreneurship.”

He says during an economic downturn or even during something like the current floods, countries have to try and reinvent themselves, look at what the future holds and support the creation of new innovative industries to drive economic growth. “Learning from the journey of developed countries, an innovative start-up ecosystem is essential to stimulate economic development.” This, he says, requires suitable local universities, mentors, government and community support, investors, infrastructure and most importantly, problems to solve. Latif says being a fast-growing developing country, Pakistan checks all of these boxes.

“However, developing a robust entrepreneurial ecosystem is not as easy as it may sound; all the components need to function together like a well-oiled machine.”

Latif says that Pakistan’s start-up ecosystem has huge potential. He says this is reflected in local start-ups raking in a total of more than $285 million during the first six months of 2022. In this context, PITB’s incubation programmes including Regional Plan 9 are playing their role in promoting entrepreneurship among the youth and have so far graduated 420 start-ups. These have raised $50 million in investments and have created more than 3,500 jobs.

Under Plan 9, potential entrepreneurs are shortlisted from all over the country and provided space and necessary facilities to develop their ideas. Those who qualify are introduced to investors who can put up money to support the theme a team has developed. This type of investment is called angel funding. It helps market the idea, set up offices and meet other expenses required to establish a business.

“This is just the tip of the iceberg. The potential of the local startup system can be enhanced multi-fold through active involvement of the youth,” he adds.

The writer is a staff reporter and can be reached at shahzada.irfan@gmail.com

Entrepreneurial potential