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  • Maham Waheed

Can Entrepreneurship Be Pakistan’s Way Forward?

Updated: Sep 6, 2023




Pakistan, home to approximately 200 million people, has emerged as one of the fastest-growing economies in Asia. With this rapid development, the country is poised to witness the establishment of an additional 2.1 million middle-income households by 2025, as per McKinsey & Company’s report. As the nation evolves, the startup activity has surged, with businesses cropping up to meet the unmet demands across various sectors. Recognizing this potential, the government has taken the lead by fostering a supportive environment for startups.


It has established national and provincial incubators, introduced a three-year tax relief, and created regulations to attract local venture capital firms and investors.

The private sector has also jumped on the bandwagon, contributing to the flourishing startup ecosystem. Foreign organizations such as Google's Nest I/O have set up incubators and accelerators, while local venture capitalists have emerged to support budding entrepreneurs.


Pakistan exhibits promising elements that suggest it is ready for a startup revolution. However, there are still significant changes required from both the government and the private sector to address the current weaknesses within the ecosystem. These weaknesses primarily revolve around three pillars:

  1. Government's Role: Designing Enabling Policies and Facilitating Infrastructure

To truly unlock the potential of Pakistan's startup ecosystem, the government needs to streamline procedures for doing business. Establishing a "one-stop-shop" for business registration and tax filing would encourage formalization and make it easier for startups to operate. Additionally, investment in enabling infrastructure, such as a robust payments gateway and modernizing institutions like Pakistan Post, can enhance the overall entrepreneurial landscape.

  1. Investors' Responsibility: Adherence to Best Practices

Investors play a crucial role in shaping the success of startups. To maximize their impact, they must adopt six best practices:

  • Develop robust investment theses based on the local context, leveraging Pakistan's unique strengths and market opportunities.

  • Proactively engineer network effects, which can amplify the impact of startups and create a virtuous cycle of growth.

  • Invest at scale to provide startups with the resources needed to realize their full potential.

  • Manage performance with a patient and programmatic growth mindset, understanding that sustainable success may take time.

  • Secure investment independence in governance to attract top talent and ensure a conducive working environment for startups.

  • Monitor key performance indicators (KPIs) in alignment with the value creation model, keeping a close eye on startup progress and impact.

  1. Cultivating Local Talent: A Collective Effort

All ecosystem players, including the government, private sector and educational institutions have a role in nurturing local talent. To drive innovation and entrepreneurship, the following steps can be taken:

  • Leveraging the existing university network to promote entrepreneurship and encourage students to pursue startup ventures.

  • Introducing digital skills through vocational institutes across Pakistan, empowering a diverse workforce with the necessary expertise.

  • Engaging the Pakistani diaspora, particularly the white-collar professionals, to connect with the innovation happening within the country and contribute to its growth.

Realizing Pakistan's Startup Potential: A Collaborative Approach

To unlock the full potential of the Pakistani startup ecosystem, it is essential for both the government and the private sector to collaborate effectively. While the government can create a conducive environment through policies and infrastructure, the private sector should actively invest in and support startups to drive significant disruption.

In the short-to-medium term, Pakistan needs to adopt a three-pronged approach:

  1. Policy and Regulation Improvement: The government should work towards simplifying business procedures and investing in enabling infrastructure, fostering an ecosystem that attracts and sustains startups.

  2. Access to Funding: Investors must adhere to best practices, providing startups with the necessary resources to scale and succeed.

  3. Talent Development: All ecosystem players should come together to cultivate local talent, empowering them to lead a digital revolution.

By collectively harnessing these efforts, Pakistan can catapult its startup ecosystem into new heights of prosperity. The nation's intrinsic drivers combined with a supportive environment will pave the way for high-valuation startups and transform the country's economic landscape. It's time for Pakistan to embrace its potential and take flight into an era of innovation and growth.


With its dense population and consumption-driven economy, Pakistan presents an appealing opportunity for startups due to its vast potential. The increasing middle-class population and tech-savvy youth further contribute to its attractiveness. While the startup ecosystem might be lagging compared to neighboring countries, there is evident progress. To fully tap into Pakistan's potential, it necessitates a collaborative effort between the government and the private sector. The government's role lies in nurturing startups during their early stages, while the private sector comes in to provide funding and add value. By working together, they can foster talent and embrace the digital revolution, propelling the nation towards a brighter future.


We are now looking at Pakistan because it possesses all the intrinsic drivers to become the next significant South Asian market for startups. The country has a large population, a growing middle class, increasing internet penetration, and established incumbents in key industries that are ripe for disruption. Despite facing challenges, the infrastructure in Pakistan is comparable to that of countries like Bangladesh or Nigeria, which have already witnessed notable startup successes. So, it isn’t wrong to expect Pakistan soaring higher through its budding entrepreneurial setup.



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