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Entrepreneurship in Pakistan

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  • 1. ENTREPRENEURSHIP IN PAKISTAN[Type the abstract of the document here. The abstract istypically a short summary of the contents of the document.Type the abstract of the document here. The abstract istypically a short summary of the contents of the document.]Muhammad Zeeshan Baloch10/25/2011
  • 2. Entrepreneurship:-Entrepreneurship is a process through which individuals identify opportunities, allocateresources, and create value.The behavior of the entrepreneur reflects a kind of person willing to put his or her career andfinancial security on the line and take risks in the name of an idea, spending much time as wellas capital on an uncertain venture.Person that has potential for bringing positive change is called entrepreneur.The essence of entrepreneurship lies in creating and exploiting opportunities and pursuinginnovation in practice. This involves learning, often by trial and error, how to designorganizations of all kinds in different contexts and how to operate them successfully.Importance of entrepreneurship for a country:-It has assumed super importance for accelerating economic growth both in developed anddeveloping countries. It promotes capital formation and creates wealth in country. It is hopeand dreams of millions of individuals around the world. It reduces unemployment and povertyand it is a pathway to prosper.The Challenge and problem Statement:-A recent groundbreaking study by the International Monetary Fund (IMF) reports thatinequality between women and men is costing the world billions of dollars a year in losteconomic growth. A survey of more than 40 rich and poor countries found that the genderdivide reduced economic growth in these countries (although economic growth tended tonarrow the gap between the sexes). This is particularly true in Pakistan, a classic case in which
  • 3. almost half of the female population remains virtually excluded from the productive sphere oflife. The challenge for increasing women’s participation in the public sphere is complex becauseof several interdependent social and cultural dimensions. However, it is not impossible. Wedefine this challenge from the perspective of productive participation of females in economicgrowth and approach it from two foci: how to increase female participation in the labor forceand how to help women grow their businesses?Problems for women entrepreneur according to different people:-We see that there are many schools, universities and women are studying there and takinghigher marks than boys but what we see that they are not playing their role as they shouldhave.According to Dr.Shehla Akram (President of women chambers of commerce and industries):-One question was asked by her that that there are many schools, universities and women arestudying there and taking higher marks than boys but what we see that they are not playingtheir role as they should have.In the answer of that question she said: Since when open merit has been launched Women aretaking many seats. She said that we surveyed about the trend of women for study. She foundedthat women wanted to do straight study as we see that mostly women are going in Medical andEngineering side that are traditional fields and there is high dropout rate and in which manyopportunities are available and other subjects in which opportunities has to be find and youhave to go other city, foreign countries and multinational universities where competition is veryhigh. This is the big cause.Drop out RateMedical 68%Engineering 70%Lawyer 90 to 95%She also thinks that syllabus is not according to them.
  • 4. Why women have to leave study and job:- She said that families are not its-self educated the head of the house is not educated when neighbors/society talk about their women that they work outside then they do not feel better. Transportation system is bad Harassment is there. Family worries when a woman comes late from office and bad thinking point is there.So there every step does not go in favor of women. So whenever we do not change our mind-set we should give her freedom like men.According to Mamoona Sitar (Project manager WPIC):-One question that was asked by Mamoona Sitar: What do you think that social behavior ofpeople and their thinking style is constraint in way of women progress due to which theycannot play their role as they should have?In the answer of that question she said: She said that our society did not accept till nowthat women are the part of our society. They also have to consume the resources as menconsume. Our thinking is not carrier oriented. We give education to our women because theyare not getting married. If they get education but still there are no opportunities that theycould avail. You should give them more space in business. There should be collective efforts forpromoting women.According to Muhammad Azam Rommi (Senior Lecturer and Director of Research, Centre forWomens Enterprise at University of Bedfordshire Business School, Luton, UK.):-In Pakistan, women entrepreneurs do not enjoy the same opportunities as men due to anumber of deep-rooted discriminatory socio-cultural values and traditions. Furthermore, theserestrictions can be observed within the support mechanisms that exist to assist such fledglingbusinesswomen. The economic potential of female entrepreneurs is not being realized as theysuffer from a lack of access to capital, land, business premises, information technology, trainingand agency assistance. Inherent attitudes of a patriarchal society, that men are superior towomen and that women are best suited to be homemakers, create formidable challenges.
  • 5. According to International entrepreneurship in Pakistan:-Many international surveys rank Pakistan was one of the most corrupt countries in the world.Entrepreneurs are cautioned. Although it has strong potential to be an entrepreneurial nation,there are certain problems that prevent it from being so. The first is the entrepreneurs’ effortto become wealthy overnight, without having to move up the ladder gradually. Thisoverconfidence and lack of understanding for proper business techniques causes the demise ofmany entrepreneurial ventures.The second issue that is preventing entrepreneurial growth in Pakistan is that the women arenot given the opportunity to start a venture and nurture it into a successful business. Womenare looked as the “food-makers” rather than the “food-earners.” However, research does showthat those women who have been given the chance and the proper resources have worked tobecome strong entrepreneurs. As an increasing number of women are fighting for their right toenter into the business world, entrepreneurship amongst women is giving rise to someexcellent business ventures.According to Hammad:I am working in a Recruitment firm, we have a very nice environment, you can say ideal forwoman to work, but one thing I would like to share with you is that 95% of female Colleaguesleft the job after marriage although the environment was ideal for them. The ratio of leavingjobs is much higher in females as compared to males. So this thing is included in our culture.I think you should utilize your energy in the poor areas of Pakistan, where women knit/sewdifferent types of item (clothes, Embroidery, etc) but in return they get much less reward.Women also receive little encouragement from some male family members, resulting in limitedspatial mobility and a dearth of social capital. The research suggests that in order to fosterdevelopment, multi-agency cooperation is required. The media, educational policy makers andgovernment agencies could combine to provide women with improved access to businessdevelopment services and facilitate local, regional and national networks. This would helpintegration of women entrepreneurs into the mainstream economy.Some organizations and programs that are that are promoting women entrepreneurs:- ISLAMABAD - Small and Medium Enterprise Development Authority (SMEDA) plans to establish 14 Women Business Development Centers (WBDC) in major industrial and commercial cities throughout Pakistan with the objective of facilitating and promoting women entrepreneurship in the country.
  • 6. The entire effort is focused at encouraging new business start-ups and support to existing businesses including the right environment for nurturing women owned and managed businesses to an extent that these become sustainable, specifically, in start-up period (first 5 years) when they are most vulnerable,” he added. Women Entrepreneur Section is a part of the Facilitation Division at the TDAP. This Section has been instrumental in facilitating and promoting women entrepreneurs since last many years. The main aim is to support women entrepreneurs in meeting the requirements of local and international marketing through promotion and facilitation so that opportunities could be created for aspiring women entrepreneurs to expand and grow. Last week, women entrepreneurs representing various regions of Pakistan gathered in Washington, D.C. to participate in an intensive three-day business mentorship program under the Propelling Womens Entrepreneurship in Pakistan (PWEP) program, a new initiative that has grown as a result of the U.S.-Pakistan Strategic Dialogue Gender Working Group. CIPE in Pakistan has been working extensively in the area of women entrepreneurship development. To provide access to information about the entrepreneurship opportunities, together with Lahore Chamber of Commerce & Industry and UK’s Radio Project, a series of radio programs have been developed. The focus of these programs is to discuss entrepreneurial issues and solutions. EG-USAID that is planning and executing EG projects these projects could include gender as a cross cutting theme or function as standalone projects specifically focused on women’s employment and/or entrepreneurship.Usman Siddiqui, one of the founder’s of The Readers Club Pakistan. The Readers Club isPakistans first online library is an attempt to fill the void created by the complete dearth ofquality and accessible libraries, and remedy the problem of the huge cost of quality books.Women Entrepreneurship Development:-Unlike many developing countries, in Pakistan bringing women into the mainstream economicactivity has been challenging. A country with estimated population of 172,800,000, over 50% ofwhich are women, Pakistan has only 3% of women engaged in economic activities, according toFederal Bureau of Statistics estimates. One way to improve economic participation is byproviding entrepreneurship opportunities to women both in urban and rural areas. Over thelast few years, government, donors and the NGO sector have been investing in buildingcapacities of women entrepreneurs; however, the recent World Economic Forum’s Global
  • 7. Gender Gap Report ranked Pakistan 128th out of 130 countries, followed by Saudi Arabia, Chadand Yemen.CIPE in Pakistan has been working extensively in the area of women entrepreneurshipdevelopment. To provide access to information about the entrepreneurship opportunities,together with Lahore Chamber of Commerce & Industry and UK’s Radio Project, a series ofradio programs have been developed. The focus of these programs is to discuss entrepreneurialissues and solutions.Factors that impact/constrain women’s economic participation: • A political, cultural and/or religious value system that discourages or prohibits women’s paid labor. • Legal, political and organizational limitations (e.g. “sunset laws” that require women to return home from work by sunset; inadequate associational opportunities for networking and mobilization such as those provided by trade unions and business associations). • Self-perception and actualization (the extent to which women perceive themselves as skilled and economically viable participants in the market, local or otherwise). • Extent of education and literacy. • Knowledge of legal, political, financial and economic opportunities. • health care status; • Demographic variables affecting single women versus married women; rural versus urban (e.g. the needs of rural women for improved energy and water resources); economic class; regional location; sector of economic activity; and the degree of cultural/religious conservatism. • Inadequate access to safe transportation. • Lack of child care and insufficient maternity leave. • The segregation of women in the informal sector, and in low-wage jobs. • The marginalization and weak capacity of gender focal points in government ministries, as well as the insufficient capacity and resources of the Ministry for Women’s Development.Needs/Opportunities: • Increased access of women to knowledge, vocational training, transportation, markets and finance (including leadership and entrepreneurial training for the entire value chain).
  • 8. • Social reforms such as maternity leave, child care provisions and administrative and legal reforms. • Enhanced knowledge of and opportunities for women to access micro credit; • Greater access by the rural poor to micro credit and grants, especially in the earthquake recovery zones; • gender intelligent programs that address the perceptions and needs of both women and men; • Deliberate consideration and mainstreaming of gender intelligent programming throughout Pakistani government ministries; • improved access of women into higher earning jobs, rather than low-wage sectors; • Superior benchmarking and performance indicators for gender intelligent policies, projects and programming initiatives.Example of a women entrepreneur:-A conversation with a Pakistani entrepreneur Roshaneh zafa:-She told a story of women that name was shahida she is working in auto part dealer which istotally man dominant business. She buys and sells small auto parts essentially motor bikes. Herhusband used to run this business but 10 years ago he died of a heart attack. He was left fivechildren. She had two choices. One choice was to live of the generosity of a family and the second wasto do this business about which she had no knowledge. It’s a negotiating business. Now she isgood in business.She employs five men on job and now she is successful auto part dealer in the community andbecause of her other women has chosen business that they may never thought. It’s like a snowball you start with one women and she tells the next and tells the next.Result of women entrepreneurship:-We see that now some organizations are arranging programs and doing such activities that arehelpful for pulling women for taking first step with great confidence. But as many people havesaid that this is not the work of one person all government, media, NGO’s should take part forcreating opportunities for women.Men entrepreneur of Pakistan:-As we can take a view from the upper study that men are using more and more resources thanwomen then when we look around we see that many people that has the potential to dosomething new that can bring positive change are free.
  • 9. These problems are in Pakistan because corruption has caught us tightly. Pakistan economicpolicy makers are corrupt because our leaders are like that. They are not making such type ofpolicies that can create such environment that pull up these potential entrepreneurs.Example of men entrepreneur:-Success Story of an Entrepreneur (Mr. Malik Riaz – Owner of the Bahria Town)  Malik Riaz belonged to a wealthy family, his father’s contracting business collapsed when he was just 19. By that time, he began his career as a ‘lowly clerk’ in Islamabad. Although there is no information available on his educational stream, some close to the entrepreneur say that he is a real intelligent person. He has been so poor during the initial years of his marriage that he did not have money to purchase medicine for his infant daughter. According to him, he never forgets being poor and that keeps him modest and generous. In the late 1970s, he was given loan by a friend to invest in contracting business. Riaz worked day and night for the success of his business and proved himself as a great business man. With the passage of time, his business and experience grew and he moved on to Malaysia for further projects. During his stay at Malaysia, he decided to introduce a world class luxury housing society in Pakistan and in the year 1996, he launched Bahria Town.  Syed Babar Ali is the man behind Packages, Milk pack, LUMS and Ali Institute. He is a great industrialist and a most successful entrepreneur of Pakistan. 1. Packages Ltd. – one of the most recognized company worldwide 2. Milk pack Ltd. – now Nestle Milk pack Limited Tetra Pak Pakistan Limited 3. International General Insurance Company of Pakistan Limited Tri-Pack Films Limited 4. First International Investment Bank and Systems Private LimitedRent Seekers:-A company, organization and individual that use their resources to obtain an economic gainfrom others without reciprocating any benefits back to society through wealth creation.Example of rent seeker:-An example of rent-seeking is when a company lobbies the government for loan subsidies,grants or tariff protection. These activities dont create any benefit for society; they justredistribute resources from the taxpayers to the special-interest group.
  • 10. Why Countries are poor even they are rich in resources:-This question gives us the answer that why an entrepreneur is called a rent-seeker. Peoplechoose occupations with highest private returns.• The ablest people choose occupations with increasing returns to ability.• What determines the attractiveness of an occupation to talent?1) The market size2) Diminishing returns to scale (firm size)3) The compensation contract
  • 11. Evidence:- • The effects of lawyers (bad) and engineers (good) on growth • No statement about social utility of these professions!Result of the whole Study:-As we know that entrepreneur are important for accelerating economic growth both indeveloped and developing countries. It promotes capital formation and creates wealth incountry. It is hope and dreams of millions of individuals around the world. It reducesunemployment and poverty and it is a pathway to prosper.But when we see the condition of Pakistan one point comes in mind that  Government do not want to take any step for accelerating economic growth if he wants then we can say that our policy makers are not eligible for their posts if they are not forced by our government leaders.