Karachi has been ranked among South Asia’s top ten start-up-friendly cities by the startup ecosystem rating website, Startup Blink, in its 2022 report.
Pakistan’s port city has broken India’s monopoly on the list by jumping up four ranks within a year to join the top ten cities.
While the other 9 cities are all in India, Karachi has reportedly surpassed Pakistan’s top city, Lahore, this year, as well as other cities that are considered to have startup-friendly environments.
However, on a global level, Karachi’s ranking has dropped by five places and is now at number 291.
Meanwhile, Lahore fell 48 places to the 305th rank internationally this year. Islamabad was ranked third in Pakistan and dropped one rank to 438th on the global list.
Overall, Pakistan’s ranking as a favorable environment for startups decreased by two places and it stood 76th globally. It was also ranked second in South Asia and fourth among the Central Asia Regional Economics Corporation (CAREC) countries.
The report detailed that successful start-ups and digitization are of prime importance in Pakistan’s economic development.
Digital entrepreneurship and investment in startups got a boost in Pakistan during the pandemic, and startups were supported by improvements in broadband coverage and digital infrastructure, and a new framework for digital payments. Local IT companies also received tax incentives and exemptions through Special Technology Zones.
Pakistan has come a long way to strengthen its legal framework to promote digitization, according to the report, but still needs clarification on taxes and incentives for local investment.
The country’s climate of political chaos hinders the creation of stable policies and an environment of trust to actually strengthen its startup ecosystem, Start Blinkup detailed. Apart from this, increasing capital demand for emerging startups and the supply of experienced manpower are also causing concern.
To meet these needs, it is necessary for Pakistan to increase the capacity of the startup ecosystem to provide qualified and trained manpower amid the growing demand for capital for emerging start-ups.