Entrepreneurship is viewed by
economists to be a combination of innovation and risk taking. When such activity
thrives, high growth rates are achieved as well as opportunities offered to all
of society, including the poor. They offer benefits through growth and
employment. In Pakistan, innovation and risk taking is severely inhibited by the
pushy role of government of country. From the starting days of strategy, when
protection and subsidy policies determine winners in the market,
entrepreneurship has been diverted to government favors. Government’s economic
policy is also seeking to promote growth through a basically 'mercantilist'
approach where local commerce through serious neglect is regulated. This sector
either employees most of the poor or offers them entrepreneurial opportunities
although deregulating this sector could be a priority in and anti-poor planning.
To development of an entrepreneurship culture in the Pakistan, the system of
laws and policies that are promoting it will have to be dismantled.
Entrepreneurship development as a conscious mechanism in Pakistan is a recent
post-colonial phenomenon. This has been an exciting period in which
international aid was sought with the purpose of achieving economic development.
The international networking of research with fledgling local counterparts
dedicated themselves to developing policy instruments for delivering this noble
purpose. Sadly, even after 60 years poverty persists and other countries, like
Pakistan, are caught in poverty.
In Pakistan, the policies have always been biased towards the high class of
country. This is true of the economical policies which have been biased towards
the high scale sector. Rather than entrepreneurship, policies are planned for
investors and investments became the norm. Incentives were offered to attract
investment. Such incentives included licensed monopolies in protected markets,
cheap land and credit and subsidized inputs.
Promoting entrepreneurship has its own importance. According to Global
Entrepreneurship Monitor’s 2010 report, Pakistan lags in start-ups, with less
than half the rate of early-stage entrepreneurial activity found in other
factor-driven economies. Part of the problem is that most young people coming
out of universities prefer searching for a job instead of exploring
entrepreneurial career opportunities.
Private enterprise is not lacking in Pakistan, however most of it is directed
towards unproductive rent seeking and increasingly towards destructive
activities. Rent-seeking is a term used by economists to describe the extraction
of resources by individuals, firms, or organizations from others that is not
compensated by production or value addition in real terms. Lobbying for special
treatment such as monopoly licenses, subsidization of land or other production
inputs, favorable taxation regimes are all mechanisms by which private
individuals and firms actively seek unearned wealth transfers from the
government.
For the country to move forward, the need to abide by the rule of rewarding
individual enterprise in an open and competitive manner must be ingrained into
our national ethos. Only by creating the right set of incentives for productive
activity at the individual level can the country make sure that the ablest young
people become entrepreneurs rather than rent seekers.