Jazz Launches Its Report on the State of Digital Entrepreneurship in Pakistan

‘Pakistan needs dynamic digital startups,’ according to Mr. Aamir Ibrahim, CEO of Jazz. And it needs to get the ball rolling in this respect now, by helping make local startups more agile, investing in the technologies of tomorrow such as internet of Things, Robotics, 3D printing, autonomous cars, 5G networks, virtual reality and more. A failure to do so would prove to be disastrous for Pakistan’s nascent digital economy and startup ecosystem.

Not all hope is lost in Pakistan, since all the essential components that make up the digital entrepreneurship ecosystem are already in place.

We have:

• a thriving and always connected population (43 million internet users currently),
• a successful IT industry which recently exported nearly $1 billion in products & services
• a robust telecoms industry that is up to the task of satisfying the needs of a digital generation
• incubators and accelerators that discover tomorrow’s entrepreneurs today.

But there are things that need to change. Entrepreneurs need the right support and funding to realize their dreams and bring about real and lasting change in the country. The government needs to do away with anti-business and anti-innovative provisions that exist to frustrate more investment and disruption in the industry.

Digital Entrepreneurship Ecosystem in Pakistan

According to the Jazz Foundation’s recent white paper titled ‘Digital Entrepreneurship Ecosystem in Pakistan’, here are the most pressing issues that need attention from all stakeholders:

A Young and Growing Population

With 75 million of its 200 million population residing in cities, the demand for digital services is nothing short of massive.

An area of worry – with 2 million new job seekers entering the market per year, Pakistan needs to secure more opportunities for them. Failure to do so contributes to a brain drain, and a frustrated populace.

Internet Usage is Rising

Smartphones are getting cheaper. 3G/4G cellular services have brought internet to the masses, with about 43 million users and counting currently.

An area of worry – Pakistan still continues to grapple with illiteracy, with less than 60% of our population who can read or write at 15 years of age.  Some 37% of mobile phone users remain unaware of how to use the internet. And to sum this all up, Pakistan’s internet penetration rate is far lower when compared to other developing countries.

Rich Pool of Software Developers

With 1,280 registered IT companies and 360,000 developers, Pakistan is uniquely poised to come up with digital solutions to its most pressing problems. Interestingly, Pakistanis also make up the third largest supplier of experts to Freelancers.com.

An area of worry – other countries are doing better than Pakistan when it comes to its IT industry’s exports. The government and the IT industry need to collaborate more closely to address this situation.

Support Network That Continues to Grow

Stakeholders in Pakistan are doing their bit to support startups. Universities, cities, the IT Ministry, all of them have provided the resources and funding for budding entrepreneurs and startups. Currently the country is host to 16 incubators and 4 accelerators that provide mentorship, co-working space, business programs and more.

An area of worry – Pakistan does not have a stable venture capital market that can serve the needs of today’s startups. An increasing reliance on cash on delivery for e-commerce services further illustrates how much work needs to be done here.

Improved Regulatory Climate

The business environment of Pakistan is slowly but surely improving. Easily registering your company, getting credit for your business, enforcing contracts, and growing trading volumes, all point towards a relative improvement in the business climate here.

An area of worry – despite these improvements, Pakistan’s businesses are still stuck in traditional sectors such as agriculture, textiles, and trading. These businesses generate less than $10,000 in a year. With 2.3 million SMEs and growing, Pakistan’s business market remains fragmented and immature. We need more forward-thinking and digitally-focused businesses in retail, public services, banking, and even agriculture. The government needs to get serious in addressing this imbalance.

Challenges Exist

Pakistan needs to do a lot if it is to address the needs of its population AND become an IT giant in this age of the knowledge economy.

Jazz’s report further lays down some recommendations for all stakeholders about how to strengthen the country’s digital ecosystem and address the problem areas.

• Corporations should offer more than just monetary awards, such as market and distribution support. Startups for their part should be able to take advantage of commercial partnerships.
• Universities should develop deeper linkages with industry, helping roll out R&D labs for fostering digital solutions.
• Investors should hire top-tier investment professionals from abroad. They should also take advantage of a startup support network that spans across countries and continents.
• Entrepreneurs need to focus on increasing their customers first instead of revenues. They should also roll out their products in developed markets first and secure seed investments.
• Incubators and Accelerators here need to reach out to global mentors and invest more in training center for coaches.
• Last but not the least, Government needs to fund education more than anything else. They should also bring down taxes and offer additional incentives for digital startups. A special taxation regime that rewards startups that want to take risks should also be formulated. The government also needs to enable online payments systems of all types, adopting National Bank’s Secured Transaction Bill as a starting point.

For a more detailed look at the Jazz Foundation’s report, click here.

Image Credit- Jazz’s DEEP Report