Entrepreneurship means any initiative that a person takes to launch a new business to enhance one’s innovations for the purpose of generating income. Entrepreneurship is of vital importance in any country because it can improve living standards by creating more wealth. However, in developing countries, entrepreneurs can develop a cascading effect by creating new products and providing different services, which ultimately will lead to better economic growth. Entrepreneurship aids in the economic development of a country by creating more job opportunities and alleviating poverty. Entrepreneurs introduce new ways of services they provide which in turn enhance market competition and encourage the participation of women in different working fields. Entrepreneurship is one of the factors which aids in increasing national income.
Entrepreneurship in Pakistan:
Entrepreneurship is one of the key success factors for creating new businesses and jobs in developing economies like Pakistan. As per the 2017 census, almost 60 percent of the 200 million population of Pakistan comprises youth. This demonstrates that most of this population is soon going to become a part of the job market in the near future. The immediate need for job creation in the economy should be seen in light of the optimistic entrepreneurial and pro-business attributes of people in Pakistan. The overall ecosystem of Pakistan is startup-friendly but entrepreneurship is yet to be tapped, with fewer startups and less funding as compared to other countries, especially, Asian countries.
Some policies are also causing the hindrance in growing entrepreneurship culture in Pakistan. According to Global entrepreneurship and development institute Pakistan ranks 122 out of 137 countries second lowest in the Asia Pacific and way behind the Middle East, whereas, UAE stands at 19 and India at 69. Pakistan is still facing the problems that other countries have resolved and therefore, does not count as a business-friendly country. Government can play a key role to cope with the growing business uncertainty in the country. When it comes to a nurturing environment for new businesses or startups the first step is to simplify business registrations and taxes and procedures should be simple which will save both time and money. Another problem being faced by new entrepreneurs is the providence of funding; local funding organizations are more entrusted with already-established businesses than startups. For creating a business-friendly environment Pakistan has to deal with these problems by adopting tested solutions from which other countries have taken benefits.
Entrepreneurship in economic development:
It is believed worldwide that entrepreneurship is beneficial for economic growth and development. Entrepreneurship has been remarkably resurgent over the past three decades in countries that achieved substantial poverty reduction, such as China. Around the world, International development agencies and donors have started their ventures to increase the sustainability and effectiveness of aid.
According to the UNDP, approximately 12 million of Pakistan’s youth population desire to become entrepreneurs, but they are clueless about the procedures and requirements. Unemployment is a chronic problem in all underdeveloped nations according to a national survey almost 62% of young Pakistani want to leave Pakistan for better job opportunities. Entrepreneurship creates large-scale job opportunities that are very much important to turn unskilled job holders into skilled ones and It also prepares and provides experienced workers with large industries and different exposure.
This will ultimately help them to develop their confidence in working in their own country. The rise in the entrepreneurship of a country indicates the increase in the total employment of that country. So, entrepreneurship plays an important role in creating novel job opportunities in a country. Thus, the Pakistan government should provide more opportunities for its youngsters to become entrepreneurs so the unemployment conundrum of the country could be resolved.
Entrepreneurs are very innovative; they tend to develop new markets by introducing new and improved products, services, and technology. Thus, they help generate new wealth and add more to the national income by providing different services and new business ideas. Thus, the government can offer more benefits to its citizens.
Entrepreneurship promotes research and industrial development:
More than 30 million youths are in the age group of 18-29 years with a literacy rate of 68 percent as per World Bank Statistics. Pakistan can indulge this huge number comprising of youth in different services by creating a business-friendly environment. Entrepreneurs are people, who are always working to discover innovative ideas and improve existing ones. But their impact extends beyond their own companies and ventures and this is the best thing about entrepreneurship. Once the culture of new startups is promoted and the ones who want to run their business are facilitated by the government’s respective institutes, the confidence of the citizens will be enhanced and more people will be interested in investing in their own country and resultantly research and industrial development will be enhanced.
Promotes social changes and improves lifestyle:
Entrepreneurs change or break the culture or tradition of society and decrease the dependency on obsolete systems, methods, and technologies. They introduce innovative ways. They are the pioneers of innovating new systems and technologies that ultimately lead to social change. These changes are associated with generous thinking, improved lifestyle, and higher economic choice. This way, social changes gradually lead to national and global changes. Thus, the significance of social entrepreneurship should be appreciated.
Encourages inclusion of women in workforce:
According to the census conducted in 2017 females comprise 48% of the total population of Pakistan. Entrepreneurship accentuates economic growth with young businesses accounting for hosts of new job prospects. Creating conditions for entrepreneurs to succeed has the potential to increase the number of entrepreneurs and increase economic opportunities for them. Furthermore, the inclusion of women into entrepreneurship has led to increased worker productivity and growth; hence, they are a significant human resource for any developing economy. Unfortunately, we often neglect this faction of our society even in this modern age. The World Bank’s economic report 2017 suggests that Pakistan possess the world’s lowest rate of women’s entrepreneurship as it has only one percent of female entrepreneurs compared to 21 percent of male.
Considering the economic situation of Pakistan, the country should have a firm and united stance on giving equal opportunities to women in the workforce. These women will progress not only economically but also personally if provided with the necessary banking and finance knowledge.
Lower prices and greater product variety because of new entrepreneurship increase market competitiveness and product quality. This can cause existing players in the market to reassess their operations, increase their value, lower costs, and become more efficient.
Increased competition in an economy is beneficial as individuals and firms will source methods to enhance their operations. The new business ventures of entrepreneurs with high-growth aims and increased innovation would coerce established firms to enhance their productivity and performance.
Adds to national income:
The world has become a global village. This has paced the interdependency of cultures and businesses. The new products or services created by entrepreneurs in one country result in new wealth from new markets across the globe. Additionally, higher earnings coming from the different markets due to entrepreneurship can help boost national income. This is in the form of higher tax revenue and increased government spending which results in investment in human capital and struggling sectors.
Conclusion:
Pakistan should promote entrepreneurship culture in the current unstable economic circumstances. Entrepreneurship can play a crucial role in the uplifting of the economy in underdeveloped countries like Pakistan. It can put new business ideas into practice and creates jobs that facilitate personal development and improved living standards. If the economy becomes strong many other social problems will automatically be resolved including poverty, which is considered the root cause of all other social problems. Entrepreneurship can be considered a catalyst for economic development.
