The Value of Entrepreneurship in Emerging Economies

Government’s dream of creating 10 million new jobs also requires Entrepreneurship

By Shabnam Lall

The world financial system is not always the same as “change is a constant” therefore economists are again warning of a new global financial crisis.  The anticipated global financial crisis is based on the fact that international capital is flowing out of some of the emerging economies such as Turkey, Indonesia and Argentina.  According to IMF the biggest emerging market China is solely responsible for 40% 0f the increased global debt since 2007. The emerging markets are severely infected by debt furthermore a stronger dollar even makes it hard for them to become debt free.  A research was carried out a few years back to test the survival of small and medium sized enterprises SMEs in times of economic crisis. Surprisingly the results suggested that new firms have a greater probability of survival in times of crisis as compared to times of growth.  Furthermore, the research also suggested that entrepreneurship is greater in periods of crisis than in growth periods.

It is true that entrepreneurship accelerates growth in emerging markets therefore the African continent has experienced change  by being one of the next emerging markets.  African countries have finally realized that entrepreneurship is the key to end unemployment in youth. Consequently entrepreneurship is rapidly transforming Africa with the creation of new jobs. Moreover, the African youth now has the opportunity of to set up new businesses instead of looking for white collar jobs. Now African students can even pursue a career in entrepreneurship regardless of their field of study.   Similarly India has also realized the value of entrepreneurship in ending unemployment and poverty. Therefore the Indian government continues to support a policy conducive to new entrepreneurs.   Leading economic socialist Laura Doering in her research has stressed on the need to support economic development and entrepreneurship. Doering is of the view that it is the right time to invest in entrepreneurs in emerging economies.  

Entrepreneurship is now considered to be a practical solution to end poverty therefore increasing entrepreneurial cooperation is taking place between India and Africa.  It is believed that the collaboration between Indian and African governments is expected to create three million new entrepreneurs by 2020. Resultantly these entrepreneurs would not only generate economic benefit worth $ 50 billion but in addition to this create 25-30 million new employment opportunities.

There is no denying the fact that unemployment coupled with inflation and poverty continues to plague Pakistani society owing to inadequate economic policies by successive governments. However the PTI’s new government has appeared as a ray of hope promising the creation of 10 million new jobs.   The new government has identified sectors such as IT, tourism, small and medium manufacturing industry, healthcare and education having the maximum potential of creating new jobs.  According to finance minister Asad Umer the current government would heavily invest in these sectors which would create new jobs in government and private sectors.  However the current government must not ignore the fact that entrepreneurship is a globally tested solution for ending poverty and creating new employment opportunities.  Former US President Barack Obama said that “no country can achieve its full potential unless it draws on the talents of its entire people.”  What Obama said definitely makes sense if it is applied in case of Pakistan. The dream of creating 10 million new jobs cannot be achieved if the current government overlooks the need to foster entrepreneurship in Pakistan.  According to some financial experts the new government must facilitate genuine entrepreneurs by easy financing.  Turan Khanna (Harvard Business School) considers entrepreneurship as the act of solving a problem that matters to a large number of people amidst constraint imposed by developing countries.

Entrepreneurship has been ignored in Pakistan for the most part but now it is high time for us to realize the need to foster economic development and entrepreneurship.  The new Pakistani government therefore must encourage entrepreneurship by promoting vocational training and business incubators.   The new government should therefore encourage entrepreneurship by providing genuine entrepreneurs with incentives to increase “natural gravitation for ventures.”

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