Asia is rising among the community of nations as the financial and business hub of the world. After centuries of enduring political and economic instability, Asian countries are now set to dominate the technology market, especially the telecommunications industry.
Southeast Asia is also trying to become an integral part of the global IT industry, moreso in terms of the global startup industry. But Pakistan seems to be lagging behind in the race to reap the maximum benefits from the startup revolution in Asia, the reasons for which are many. Nevertheless, concrete steps can set the country on the path to become a startup utopia.
Asia’s rise as a new global startup player
Asia is the world’s most populous continent and also the largest. It is not surprising, then, that almost one-third of the world’s private Unicorn companies have their headquarters in Asia. The continent has so far produced 52 unicorn companies in total. Among Asian countries, China has the highest number of Unicorn startups — that equates to over two-thirds (71 per cent, to be precise) of the continent’s billion-dollar startups.
Unicorn status eludes Pakistani startups
Pakistan has the third highest GDP growth in the region and seventh in the world. Other than this, the country is also blessed with the best geographical and strategic importance to support a thriving telecommunications culture.
Further, Pakistan also has over 35 million 3G/4G users, which is expected to further grow to 110 million by 2019. Add to that the fact that a large portion of Pakistan’s population, almost 60 per cent, is composed of people between ages 15-45 — and you have the most fertile grounds for an IT revolution.
Apart from this, the country also has a thriving startup culture that is at least trying to make a mark on the global startup map.
Pakistani startups managed to raise US$30 million in 2015, an improvement from US$6 million in 2014, which was further upped to US$35 million in 2016. Important to note, however, is that out of the US$65 million raised in 2015 and 2016, US$29 million was raised by one single company – Zameen.com – a realty portal that has revolutionised the real estate market in the country.
Given the startup’s performance and the growth trajectory it has followed, most analysts place the organisation as a clear front runner in the race of the Unicorn club.
Why has Pakistan not produced any Unicorn company?
Fault in our curriculum: The startup revolution came to Pakistan almost five years ago, but so far no academic value has been associated with this culture. Institutional investment in this regard has been minimal, and most of the time one gets the impression that a visible disconnect exists between education and the startup industry. The curriculum taught in educational institutes of the country are also to blame, since these do not include research and science relevant to the demands of modern time.
It has also been observed that Pakistani universities are more inclined towards grooming entrepreneurs rather than engage students in research and development courses in specification to the global technology market.
Telecommunication companies unsupportive of startups: From the highest seats of authority in Pakistan’s IT ministry all the way down to Pakistan Telecommunications Authority (PTA), the understanding regarding startups is close to non-existent.
Due to lack of empathy for startups from the departments concerned, an efficient micro transaction platform charging low rates is absent in Pakistan. Therefore, if you’re dependent on money transaction through a telecom company, it is essential that you are able to support your business for at least 9 months minimum owing to irregular cash flow.
The curious case of missing mentors and angel investors: In Pakistan, the culture of mentorship is not promoted in schools, colleges, universities, and all the way to professional work environment. It has been usually seen that most startups that complete their incubation period are ditched by angel investors and mentors, thus resulting in the death of an otherwise budding idea.
Non-conducive banking system: As of now, most banks are clueless about the mechanism to deal with startups other than opening a company account for these new businesses. Banks also do not provide credit or debit cards linked to a startup’s company account.
Apart from this, the rules of Securities and Exchange Commission of Pakistan (SECP) are designed specifically for big businesses rather than startups. Due to this the process, new businesses that are created eventually hit a dead end.
Pakistan has a lot of potential to produce startups that can hit the billion-dollar mark in the foreseeable future. But for that to happen, the government, educational institutions, investors and intelligentsia have to join hands and find out ways to nurture startup culture in the country. The stakeholders concerned have to move fast or face the risk of exclusion from the startup revolution that has taken Asia by storm.
The views expressed here are of the author’s, and e27 may not necessarily subscribe to them. e27 invites members from Asia’s tech industry and startup community to share their honest opinions and expert knowledge with our readers. If you are interested in sharing your point of view, submit your post here.
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