Entrepreneurship in Pakistan SMEDAs Role

Presented by: Nadia Jahangir Seth, Manager Policy & Planning, SMEDA

Lasting Solutions to Poverty: Partners in Enterprise Development 2012

January 18, 2012

Economic Establishments in Pakistan

3.2 Million Establishments 99% SMEs Contribution to GDP 40 % Share in Manufactured Exports 25 % Contribution to Ind. Employment 78%
2.10% 65.26% 14.21%

SME

17.83%

2
Source: *Economic Census Pakistan 2005 & Economic Survey of Pakistan

Economic Establishments in Pakistan

Employment Size
1-5 Total Economic Establishments *2,958,321 6-10 11-50 26,352 51 + 1,617

2,851,061 79,291

Percentage
* Enterprises for which complete data was available Source: Economic Census of Pakistan 2005

96.37% 2.68%

0.90%

0.05%

Economic Establishments vs. Entrepreneurship

Poverty Alleviation

High Growth

Livelihood

Enterprise

Support Requirement Micro-finance Subsidies Cash Transfers

Support Requirement Venture Capital Credit Guarantees Business Development Support Regulatory Environment

Market Linkages

Factors that Constrain Entrepreneurship Development

Market Failure: Lack of competitive and innovative markets Governance Failure: o Judicial (contract enforcement) o Distortive taxes and subsidies o Lack of proper financial supervision o Protecting special interests o Inadequate infrastructure o Lack of proper regulation; allowing anti-competitive practices Not enough growth software: Lack human capital, good business practices and management systems, highly skilled technical people and managers, innovation, information, etc.

Government should not be involved in markets, except to regulate misbehavior, reduce transaction costs and promote competition.

Entrepreneurship Development
Developing the infrastructure of public and private policies and practices that foster and support entrepreneurship Accenture

Promoting Entrepreneurship in Pakistan

Role of government
Competitive

environment with a level playing field Free and flexible markets to enable closing down of inefficient businesses Rule of Law: protection of property rights & contract enforcement. Getting government to perform its managerial function would be an important first step Embedding Entrepreneurship in Education

Impact of SME Entrepreneurs Education on Quality of Doing Business in Pakistan

Objective

Investigating the significance, if any, between the level of education of an SME entrepreneur and the quality of doing business, as manifested through the adoption of strategy, vision, systems, market orientation and innovation principles. Quality of Doing Business Index developed by utilizing data of SME Baseline Survey A simple linear regression to test the impact of education on the quality of doing business index Regression analysis reveals positive relationship between Entrepreneurs Education and Quality of Doing Business Index

Methodology

Findings

Categories of SMEDA Support for Entrepreneurship Development

Non-financial business development services: Pre-feasibility Studies Regulatory Procedures Commercial Contracts Templates Investment Facilitation Industry Support Programme Training

Direct support to entrepreneurs

Helpdesks at 21 locations across Pakistan Over 34,000 SMEs facilitated Over 1300 training programmes across 77 cities Industry Support to over 340 firms

Enabling Actions

Enabling actions to support healthy business environment creating enabling policy environment Research & Advocacy Facilitating SME-Govt. Interface 26 Projects worth PKR 3.2 billion under implementation Punjab 13 Sindh - 4 Balochistan - 2 Khyber Pakhtunkhwa - 7

Common Facility Centers

A Few Projects
Gujranwala Business Center
Cutlery Institute, Wazirabad

Foundry Services Center, Lahore

Sports Industries Development Center, Sialkot

Agro-food Processing Facilities, Multan

A Few Projects
Women Business Incubation Center, Lahore Women Business Development Center, Peshawar

Special Projects

Early Recovery & Restoration of Flood Affected Communities in Pakistan with UNDP (Rs. 256 million)

Legal Empowerment Program with UNDP (Rs. 147.11 million) Economic Revitalization of KP and FATA (ERKF) Project; Multi-donor Trust Fund (Rs. 1.05 billion)

Pakhtunkhwa Hunarmand Rozgar Scheme with Provincial Government of KP (PKR 1.3 billion)

Bacha Khan Akhpal Rozgar Scheme with Provincial Government of KP (Rs. 2 billion)

Thank You