The PTI gave an ambitious plan of creating 10 million jobs in the next five years. However, the economic slowdown has given a reality check to the government. Recently, the finance czar Asad Umar admitted that without a growth rate of 7 percent, two million jobs per year would be difficult to create.
But he was quick to add that it depends on the priorities and went on to list tourism, small and medium enterprises as well as information technology as the priorities for this government which have ample room for job creation.
Many in the government believe that promoting startups is also an “out-of-the box” approach for job creation. While this is a noble thought, the fact that more than 90 percent of all start-ups fail means startups cannot be thought of a sustainable and sure fast way of generating employment in the medium to short term.
However, in the long term it is absolutely necessary to develop a conducive framework for the promotion of entrepreneurial activity in the country. The Prime Minister Youth Programmer (PMYP) is set to launch a “Startup Pakistan Program” and a committee was recently formed to lay out the groundwork.
If the program has to have any meaningful impact, it will have to address four major areas which are policy, finance, support and human capital. In a recent speech, the Finance Minister correctly pointed out that the current system was stacked against entrepreneurs.
The ease of doing business is one aspect but developing labour productivity is equally important. Transforming local cities into Silicon Valley is a pipe-dream at best in current circumstances and the Startup Pakistan Program will have its work cut out.
The capital market stands in shambles and the venture capital and private equity deal pipeline is nothing to write home about. There are plenty of incubators and accelerators but the mentorship and scalability platforms available to startups are not of the highest quality.
Therefore, even in the long term job creation through startups will require much more than five years before any dividends start coming in. In the coming weeks, this column will analyze the key impediments that the newly formed startup steering committee should address for development of the startup ecosystem in Pakistan.
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