Pakistan patches up a startup culture tattered by disorder
With unrest stirring, Pakistan needs leaders to provide constructive answers to society’s challenges. Social entrepreneurs can do that, but they need mentors, says a recent report by the Economic Policy Group.
Pakistani startups confront a daunting list of challenges. Even if they can get capital, many must hold it in foreign currency to protect against inflation, then use a mobile banking system to make transfers. The Pakistani government's near-default in 2008 still makes investors jittery about lending, and paying taxes is complicated by regulations that frequently change without notice. Most striking, however, is how little the country invests in training business leaders: while countries like Indonesia have upwards of 500 business schools, Pakistan has only 99.
Investors and universities are starting to notice. In November 2012, Pakistan’s top business school, IBA, partnered with Invest2Innovate (i2i) to incubate the ideas of the university’s most promising entrepreneurs. The program provides training and connections with investors through a four-month “accelerator” program. Although the program is small - only seven to 10 entrepreneurs will participate each year - i2i’s directors hope this focus on quality will pay off in the long run.
The Economic Policy Group claims training that focuses on entrepreneurship significantly impacts a business major’s success, citing a study that showed business students with entrepreneurial training earned 27 percent more on average than their counterparts five years after graduation. However, not all Pakistani entrepreneurs are business majors, and other programs have focused on incubating programs across wider demographic and geographic spectrums.
Programs like the Pasha Fund capitalize on social media to invite any Pakistani with a good idea to apply for their program. Pasha provides a small amount of capital and free mentoring, helping small businesses get off the ground and connect with investors. Other initiatives were kickstarted with public funds, like the Women's Business Incubation Centre. Broader programs like Acumen Fund’s Pakistan Fellows Program give established leaders a chance to learn and dialogue about social innovation, as well as give back to the country through conferences on social change.
In the wake of the Arab Spring, it is essential that social enterprise play a defining role in confronting the region’s social upheaval, argues Dr. Iman Bibars, director of Ashoka Arab World.
The Arab Awakening ... is in danger of being hijacked by powers that want to increase sectarian divisions and promote conflict in order to secure power and change the landscape of our country for the worse. I can think of no better remedy for this disaster than promoting social entrepreneurship.
Pakistan is not Egypt, but its government faces similar threats to stability, and as the Economic Policy Group notes, Pakistan’s population is overwhelmingly young, providing “fertile ground for developing human talent.” Investing in human talent will help investors and entrepreneurs to trust each other, claim the authors of the report, mending wounds from the 2008 financial crisis.
Helping social enterprise take off will require further collaboration as investors and policymakers join in supporting incubator hubs like the i2i-IBA partnership, and the mobile banking industry improves its own standards to become a trusted source of credit for microenterprises. The leaders the country needs might turn out to be social entrepreneurs.