By Hifsa Raja
ISLAMABAD, May 12 (INP-WealthPK): Pakistan’s economy has been battling a host of challenges on many fronts over the last few years, including rising inflation, the COVID-19 pandemic, inflated energy prices and supply chain shocks. However, the burgeoning start-up sector has turned out to be a silver lining for the country.
Talking to WealthPK, Additional Joint Director of Securities and Exchange Commission of Pakistan (SECP) Nasir Gul said, ‘‘Start-ups registration has increased in the last three to four years. Our objective is to provide a supporting environment to young entrepreneurs interested in innovation.’’
Nasir said the present youth bulge could help catalyse digital adoption and, subsequently, economic growth. He said many companies, including the start-ups, had received foreign investment from China, France, Germany and the United Kingdom. He added that recently 334 companies got registered with the SECP and most of them were new tech start-ups.
The SECP’s additional joint director said the Commission had established a separate legal definition for start-ups under which a start-up means a company that is in existence for not more than 10 years from the date of its incorporation or such other period and has a turnover for any of the financial years since incorporation that is not greater than Rs500 million.
Dr. Ahmed Faraz from the Pakistan Institute of Development Economics (PIDE) said, ‘’Start-ups may be small companies but they can play a significant role in economic growth. Start-ups are the centres of innovation; they create jobs, and more employment means an improved economy. Start-ups have a direct-impact on the cities where the companies are based.’’
“Innovation drives economic growth. This is one of the most consistent findings in macroeconomics, and it’s been true for centuries. Silicon Valley is likely to remain the leader for the foreseeable future. Governments, public-private partnerships, and development organizations across the world have attempted to emulate Silicon Valley for decades,’’ Faraz said.
“Technology-based economic development is the approach employed to help create a business climate and to enable an environment where an economy based on innovation and technology can thrive. A technically skilled workforce, an entrepreneurial culture that supports start-ups and research base that generates new knowledge are necessary for building a tech-based economy,” he said.
The government, through its continued support of the National Incubation Centres (NICs), has also contributed to the need for accessible support services by gradually expanding its network of incubators. The Higher Education Commission (HEC) has taken similar steps in order to foster entrepreneurial talent among the universities through the Business Incubation Centre.
Aqsa Hussain from the Business Incubation Centre – Institute of Space Technology, told WealthPK that it is a very good initiative of government to open incubation centres because start-ups in Pakistan are one of the untapped frontier markets, which have raised $486m of global capital since January 2021. Notable international investors, including Tiger Global and Kleiner Perkins, have also made their first entry into the Pakistani start-up landscape, she added.