It’s August 15. Indian PM Modi walks up to the podium at Red Fort and addresses the nation with a slogan ‘Stand-Up India, Start-Up India’, generating excitement amongst his youth following and shunning his image of ‘pro-big business’. Within few minutes, the local and international media is abuzz with his vision of India, a developed nation by 2022 – just in 7 years time! Maybe it is a far-fetched and over reaching challenge, but his resolve to make India the number one start up nation, surpassing the likes of Silicon Valley, Berlin, London or Singapore, is commendable.

Countries and cities around the world are focusing on Startups as a way to boost economies and increase employment. Creating just a few million entrepreneurs in a country will not only create millions of more jobs but will help income distribution, innovation, poverty alleviation and export growth that are much needed for any developing country.

Startups are a natural solution to the growing employment demand of Pakistanis. Young people are and will be working closer to the entrepreneurial mode in the future. In Pakistan the required policy, controls and implementation are missing. Most of the SMEs in Pakistan are in a low growth trap. They often become vulnerable to various shocks and disappear from the scene. This view gets credence from the fact that 19% of SMEs are less than five years old and only 4% are able to survive beyond 25 years. Insufficient infrastructure, intense government regulations, corruption, excessive taxation, data availability, lack of management skills, inability to respond and adapt to changes, poor skills of an entrepreneur, and lack of technical knowledge are a few factors among others that are quoted for the failure of SME sector in general.

In Pakistan, large companies are the only major beneficiaries of financial credit system and SME sector is totally neglected. According to SMEDA, large business communities in Pakistan accounted for 54% share of total financial credit system whereas SME sector got a mere 19% share.

Results and impact of Prime Minister Nawaz Sharif Rozgar Scheme are yet to be visible and can be termed as a right step to promote entrepreneurship in Pakistan and to create jobs. But the question remains, is this theonly approach to meeting current and more importantly future demand for employment? The startup ideas such as opening a beauty clinic, cattle farm, furniture shop, etc. as listed on SMEDA website under Rozgar Scheme are not the ideas to gear Pakistan towards the tech world of this digital century. We need a strategy much broader than that. We need to focus on creating an environment where technology is easily approachable and our youth is trained to adapt to that.

What sectors to focus on first and what follows can be debatable. But something that is certain is that we need to focus on basic steps such as simplifying startup procedures, educatingtheentrepreneurs, reducing the administrative burden, providing tax incentives, ensuring property rights, andproviding access to lending through the private sector.

To build and move towards a tech hub in Pakistan, the government needs to shift strategy to create an ecosystem where tech startups can flourish. Whether it is the upgrading the curriculumat schools and universities, or enhancing the skill set of our teachers, or to bring in experts from abroad and giving them similar incentives that they can earn elsewhere. For instance, there are thousands of Pakistanis working in tech hubs of USA and Europe who will be willing to come back to Pakistan to help create startups or to take management roles or to act as influencers and advisors. They should also be taken into policy making at government level so that ideas, expertise and technology can flow in. These experts don’t have to show allegiance to any political party. They need to be given surety that whoever is in power; their services are valuable to the State.

Other important ingredient to the Startup ecosystem especially for tech startupsis access to Venture Capitalists and Angel Investors. Though there is no shortage of investors in Pakistan, but the risk associated with investing in SMEs and entrepreneurial ventures is very high in the country. That is one of the reasons that the financial institutions such as banks in Pakistan shirk away from lending to such small businesses. Some VC firms have been active regionally, but until an ecosystem is present in the country and exit mechanism such as IPO market is established, we won’t see many of them providing the much-required funding.

It is disheartening to witness a brain drain from the country. Our youth look to work outside and choose to remain outside the country. Our skilled labor gets trained in Pakistan and chooses to work in the Middle East. We need to shift this notion of talent exporting country to talent absorbing country.

Times are changing. Businesses are changing. Customer demands are changing. The traditional guild model of doing business is changing. Our major industries still revolve around textiles, cement and agriculture. These third world country businesses will always remain highly commoditized and competitive. The world is talking about Internet of Things (IOT), bioengineering, nanotech, digital technology and robotics. The value creation in the future will be based on creativity and innovation. The 200 million large population needs jobs and it would be over optimistic of us to assume that the big companies would do all the heavy lifting. We need to rethink our priorities and policies for the youth of Pakistan.