Wednesday / Apr 09 2025

Newspaper : The News

Pakistan must first therefore undertake complete overhaul of its educational landscape

In today’s rapidly evolving global economy, the ability of a country to innovate and foster entrepreneurship has become central to its development. Nations that have built thriving ecosystems of startups are not only creating jobs and wealth but also establishing themselves as leaders in technological progress.

At the centre lies a dynamic education system that does more than just impart knowledge: it fosters creativity, independent thinking and problem-solving. Universities like Cambridge, Stanford and MIT are not merely centres of learning; they are incubators of innovation where students are encouraged to experiment, fail, and try again. The close ties between academia and industry in such universities ensure that ideas born in classrooms can find their way into the market.

In contrast, Pakistan’s education system remains largely rigid and rote-based, with an emphasis on rote memorisation rather than critical inquiry. Students often graduate with degrees that do not align with market needs, leaving them ill-equipped to start ventures or drive innovation.

To move towards an innovation-driven economy, Pakistan must first therefore undertake a complete overhaul of its educational landscape. Teachers have a fundamentally important role to play and the system of inducting teachers must be changed. The performance-based Tenure Track system with much higher salaries and better qualifications introduced by me when I was the chairman of the HEC should be expanded across all schools, colleges and universities with regular independent assessments of teaching and research quality.

Curricula must be updated to include modern, interdisciplinary approaches that incorporate design thinking, coding, entrepreneurship and collaborative problem-solving. Universities should foster a research culture and facilitate partnerships with the private sector, enabling students to turn ideas into viable enterprises. Vocational and technical education should be prioritised to build a workforce capable of adapting to the rapidly changing demands of global industries.

Without a solid educational foundation, any attempt to build an innovation ecosystem will be unsustainable. Schools and colleges should integrate entrepreneurship modules that expose students to startup thinking from a young age. National business competitions, innovation fairs, and hackathons can further ignite the spirit of enterprise.

Another critical component of the entrepreneurial ecosystem is the ease of access to capital. We need to instal a mature financial system that supports startups at every stage — from seed funding to initial public offerings. Venture capital firms, angel investors and crowdfunding platforms form a robust network that reduces barriers for new businesses to emerge. Pakistani startups struggle to secure funding beyond the ideation stage. The venture capital industry is in its infancy, and bank lending is often risk-averse, favouring established businesses over new ideas.

To address this funding gap, Pakistan must cultivate a more startup-friendly investment climate. Policies that incentivise venture capital and angel investments — such as tax relief or matching grants — can go a long way in attracting local and foreign investors. Public-private funds designed to co-invest in high-potential startups can provide much-needed momentum.

Moreover, creating regulatory frameworks for alternative financing models, such as equity crowdfunding, could democratise access to capital and empower a broader range of entrepreneurs. Financial institutions should also be encouraged to allocate a portion of their portfolios to innovative small businesses, especially in high-growth sectors like fintech, agritech and clean energy.

Legal and regulatory environments play a central role in shaping entrepreneurial outcomes. Legal structures support the creation of limited liability companies, protect investor interests, and enforce contracts efficiently. The legal environment in Pakistan is often opaque and discouraging. The process of registering a business is time-consuming and riddled with red tape.

We must therefore prioritise legal reforms that simplify business registration, taxation, and compliance. A digital one-stop platform for company formation and licensing would significantly lower entry barriers. Furthermore, we must modernise the IP protection regime, ensuring that innovators are confident their ideas won’t be stolen or misused. Effective enforcement mechanisms, along with increased awareness of IP rights, would send a strong signal to both local and international stakeholders.

The presence of strong institutions that nurture startups is essential. In the US, accelerators like Y Combinator and Techstars, along with university-affiliated incubators, have played a critical role in guiding startups from idea to execution. They provide mentorship, training, access to investors and often seed funding. These institutions serve as bridges between academia, industry, and the market.

Pakistan has made some progress in this area with the establishment of National Incubation Centres in major cities, but the scale and depth of support remain limited. Most of these centres serve urban elites, leaving vast regions and marginalised communities untouched by innovation initiatives.

Expanding the reach and quality of incubators and accelerators is therefore crucial. Local universities should be equipped to host innovation hubs that can support student-led startups and facilitate research commercialisation. Specialised accelerators focusing on key economic sectors such as agriculture, textiles and logistics would allow for targeted development. Public-private partnerships can play a vital role here, bringing in business expertise and funding while aligning with national development goals.

However, none of these efforts can flourish without adequate physical and digital infrastructure. Pakistan continues to suffer from unreliable electricity, poor internet access in rural areas, and inadequate logistics systems. These limitations increase the cost of doing business and inhibit the scalability of startups. Investments in infrastructure must therefore become a top national priority. Broadband internet and 5G connectivity should be extended beyond major cities to empower rural entrepreneurs and freelancers. Innovation districts with access to uninterrupted electricity, co-working spaces, and research facilities could serve as magnets for talent and capital.

Modern data centres and cloud services would also provide the backbone for a growing digital economy. Improving road and transport networks would also reduce inefficiencies for businesses operating in agriculture and manufacturing.

Finally, the role of government procurement as a catalyst for innovation cannot be underestimated. The government can take bold steps by setting aside a portion of its procurement budget for startups and SMEs, especially those working on digital governance, education, health and energy solutions. Innovation challenges and pilot programmes can be used to test new ideas before scaling them up. A dedicated ‘GovTech’ fund could support the digital transformation of public services while empowering local entrepreneurs.

Our leaders must understand that building a thriving startup landscape is not just about technology or capital; it is about creating an environment where ideas can be born, tested, and grown with confidence. Pakistan is brimming with young talent, ambition and creativity. If these qualities are supported by the right policies and a bold national vision, the country can chart a path towards inclusive, innovation-led growth. We must act swiftly and decisively to embrace the transformative power of entrepreneurship.