Muneeb ur Rehman

Given the increasingly pervasive influence of technology across all sectors of the economy, the emergence of technology startups offers an opportunity through which Pakistan can attain an elevated rate of economic growth, said a tech expert. “Pakistan has the potential to keep pace with the growing economies of the region by focusing on technology-led businesses. Startups in Pakistan are still in the nascent stage although they have shown considerable progress over the last few years,” said Omer Ahmed, Chief Executive Officer of Avanza Solutions Private Limited, while talking to WealthPK.

Omer said socioeconomic foundations of Pakistan act as enabling factors for the growth of technology-based startups. “The primary enabling factor is the market size. Pakistan is the world’s fifth-most populous country with almost 65% of the population below 30. Technology businesses usually tend to prefer to penetrate such a market. The young population usually has more eagerness to adopt technology, thus serving as the customer base for the companies,” he explained. He hinted at the growing use of cellular phones in the country, which is symbolic of the widespread acceptance of technology in society.

Omer said another enabling factor is the available vacuum in edtech, healthtech, agritech, and foodtech in the country. Although Pakistan has made progress, it lags behind in attracting technology-related investment when compared with other countries.

“However, to materialise the potential of the tech startups to achieve growth, bottlenecks need to be addressed,” Omer emphasised.  He said the investment inflow into the tech industry is highly skewed towards fintech and e-commerce. Between 2015 and 2021, 71% of the funding was made in these two sectors. “This shows that startup activities are not widespread across edtech, healthtech, agritech, and foodtech side,” he added. Additionally, the lack of skilled human resources is hampering the growth of tech startups. “Economic growth through startups can be sustained with a huge bulk of the labour force equipped with technological skills,” Omer said.

Lastly, he mentioned the lack of access to credit for the nascent tech businesses as another bottleneck. “New entrants in the technology sector usually do not possess collateral in the form of land and plants. The difficulties in getting loans have a negative impact on the growth of startups,” he said. Technology startups can be an engine of growth for the struggling economy of Pakistan. They can absorb the labour force and contribute to tax collection. All technology-related startups need favourable market conditions and institutional support from the government.

Credit: INP-WealthPk