An Entrepreneur is the one who
takes on the risk of starting their own enterprise or investing in other
start-ups. Successful entrepreneurs are known for finding innovation and market
gaps for new products and services. Entrepreneurs have the ability to take
business to the point at which it can sustain itself on internally generated
cash flow. The future of entrepreneur is to reform and revolutionize the pattern
of production.
Entrepreneurship spurs improvements in productivity and economic
competitiveness, and with technological advances and economic liberalization,
the assumption that nurturing entrepreneurship means promoting a country's
competitiveness which today appears more valid than ever. Entrepreneurship
development has the potential to create jobs through the formation of new
business ventures; utilization of available labor and resources to create
wealth, stimulate growth, boost the economy and increases a nation's GDP, and
reducing dependence on social welfare programs. Entrepreneurs create new
businesses and new businesses in turn create jobs, intensify competition, and
may even increase productivity through technological change. High measured
levels of entrepreneurship will thus translate directly into high levels of
economic growth. While it is easy to see that starting a new business to exploit
a perceived business opportunity would lead to economic development, it is also
possible that necessity entrepreneurship may not lead to economic development.
Being pushed into entrepreneurship (self-employment) because all other options
for work are either absent or unsatisfactory can even lead to under development.
According to many, the two widely acknowledged causes of small business failure
are 1) lack of knowledge about the business, and 2) insufficient capital to
sustain the venture through break-even and profitability. The issue of knowledge
can be overcome by given proper instruction, most entrepreneurs can learn the
basics of running a given business. Information and learning can be obtained
through traditional schools, franchisors, books, consultants, or on the job
training as an employee. Than is the matter of capital, with a bit of
intelligence and careful planning, a venture can be started with limited means
and grown as finances, time and ability permit. However, the actual root cause
of entrepreneur failure is the non-existence of two things. There is not a
passion for the work involved and/or there is not a quality, personal fit with
the venture. The root cause of business success or failure is not due to a lack
of knowledge or capital, it is due to a poor fit between the owner and the
chosen venture. The successful entrepreneur always enjoys a good relationship
with the business.
In case of Pakistan, the entrepreneurs face many challenges and problems. The
factors for such low levels of entrepreneurial drive lie within our culture,
bureaucracy, financial hurdles and academic perceptions of entrepreneurship.
Entrepreneurship is associated with small and cottage industries; there is a
stigma with failure and a general resistance to new ideas; businesses are rooted
in traditional and low value-added sectors such as textiles, rice and leather.
Also, younger business communities, often educated abroad, do not have the
requisite experience or financing to establish businesses, family-owned
businesses are slow to adopt professional modes of management; business culture
is excessively male dominated with very few women entrepreneurs or business
heads.
Other factors include corruption at practically all levels, high taxes and
stringent government regulation creating unnecessary hurdles for entrepreneurial
businesses. On the private sector front, multinational corporations and
international banks have rapidly expanded their presence and they provide good,
salaried opportunities to young professionals. The typical aspiration of an MBA
student graduating from a Pakistani business school is to secure a stable job
with a multinational or other large corporation where they can advance through a
stable, prosperous career. However, with the growing population and fewer job
openings, traditional avenues of employment are limited.
Other hurdles towards establishing independent businesses include financial
barriers to entry. The venture capital industry is almost absent in Pakistan.
Despite reforms initiated by the State Bank of Pakistan, access to equity and
formal debt financing have not improved. Access to finance is a recurring
constraint to enterprise development in Pakistan, especially in the case of new
and small enterprises.
The other major constraints in entrepreneurial growth are with regards to tax
administration and tax rates, electricity, and access to financing, security,
housing, capacity building and infrastructure. The list of less constraining
issues includes crimes, access to land, labor regulations, and
telecommunications. The issues related to financing costs, economic policy
uncertainty, corruption, macroeconomic stability, customs and trade regulations,
anti-competitive practices, business licensing and operating permits, skills and
education of the labor force, energy efficiency and transportation are cross
cutting in nature and affect all sizes of enterprises. But regarding tax issues
and electricity, medium firms express the strongest complaints, followed by
large firms, small firms, and micro firms. However, small firms complain most
about for access to the finances.
In such scenarios the government should eliminate the barriers to
entrepreneurship by providing infrastructure, defense, land, education. Such set
ups should be provided which encourage start-ups and support existing small and
medium size enterprise by enabling them to adapt innovative strategies and
technologies and thus compete more effectively at the global level. The
educated, young, and emerging entrepreneurs need to take the lead and be
encouraged to become the vanguard of Pakistan’s economic growth.