Going small for large gains

Being an entrepreneur is exciting, and cool. The flexibility and freedom to venture out, take risks and challenge the status quo is thrilling. For me, however, understanding how a simple activity of an enterprise interlinks with numerous value chains and the impact it has was most insightful. Adding one individual gainfully to the employed pool can trigger positive spill overs that may only be observable at a micro scale. When aggregated across millions, the effects can be much pronounced.

Pakistan has skilled and talented human resources. The big opportunity lies in channelling these skills and talents to develop into engines of social and economic change. It is important, rather critical, to focus on aspects of economic growth, coupled with improvement in social behaviours and attitudes to maximise impact. While conventional small businesses like retail outlets, cottage industry, vocational services etc will continue to grow with increasing demand, enabling such conventional business structures with better management and a focus on innovation can go a long way in increasing their business potential.

Social enterprises are businesses that aim to develop a viable for-profit proposition that also achieves a social goal. Most social enterprises tend to fall in the category of small and medium enterprises (SMEs). Challenges faced by SMEs – like policy incentives, access to funding, market outreach etc – are applicable to social enterprises as well. The additional burden is to provide products or services that address a social issue while making it viable.

Social enterprises have to interact with different categories of stakeholders and need to approach the market in a different way. The growing emphasis on social enterprises globally, regionally and now locally, originates from the value they add to the economy. In a developed economy like the United Kingdom, social enterprises employ almost six percent of the labour force and contribute over GBP 25bn to the economy. Countries like Bangladesh and the Philippines have been able to develop this segment and have successfully contributed to the local economy.

Social enterprises focus on local issues and needs. They structure business models and enterprise offerings that address local demands. To this end, they also employ the local population and take a more inclusive approach by absorbing the marginalised/disadvantaged groups. Their inclusion in the labour force creates impetus for replicating such patterns.

These enterprises tend to have younger leaders and more participation of women. Establishment of such enterprises in operating in different sectors evolves the ecosystem with more players entering the local economy to integrate into the expanding value chains. Such developments, when mimicked across the country, can generate sizeable contribution to the economy.

In Pakistan, the pressure on public services to meet growing demand, has led to the development of many successful social enterprises – mostly in health and education. Catering to the needs of over 200 million people is not an easy undertaking. The gaps and deficiencies across a range of other verticals like energy, waste disposal, skills development/capacity building, low-cost sustainable housing, water management and countless others offer a splendid opportunity for innovation to fill the void. Technology can certainly play a catalysing role in these areas. The rapidly developing entrepreneurial ecosystem, fuelled by incubation centres, funding opportunities and evolving linkages provides a great starting point. However, it is an absolute must to expand this entrepreneurial drive and capacity beyond the urban centres.

Marrying social enterprises with creative ventures presents another unique and virgin segment for Pakistan. A land with talents that are peculiar to regions and terrains, and bring their own cultural and history like handicraft, music, cuisine, art, performance, clothing – can all be leveraged to develop a vibrant and inclusive entrepreneurial ecosystem focused on uplifting millions at the grassroots.

Growth in population, urban centres and rapid expansion of suburban areas is creating demand pressure on existing infrastructure, services and resources. The nuclear family is now looking for avenues of leisure and entertainment that can offer some differentiation. An appreciation of the cultural revival is growing and offers a unique opportunity to blend business with creativity. Initiatives to re-emphasise art, literature, theatre and drama, folk music etc have been very popular in the recent years. If this growing demand supported by ability to pay is matched with the abundant, and untapped, supply of creative talent across Pakistan, a model for sustainable and inclusive growth – while strengthening roots – can be developed.

A number of organisations and programmes are now sharpening their focus to incubate, develop and grow social and creative enterprises. In the public sector, establishment of the Centre for Social Entrepreneurship at the Planning Commission is a great start to bring a dedicated focus to this segment. In the private sector, the Social Enterprise Development Centre (SEDC) and Social Innovation Lab at LUMS, Invest to Innovate, Acumen Fund, British Council through its DICE Programme are notable contributors to strengthening this ecosystem.

Pakistan’s labour participation must increase across the board in more productive and value additive activities. What could be better than spurring employment through entrepreneurial ventures that use local talents and creativity to reduce inclusion gaps along gender, ethnic, geographical and educational divides?

My first employee grew from being an unemployed office assistant to a junior graphic designer in less than two years. All it took was a spare laptop, some guidance on how to use the internet to open doors to a world of massive free learning and finally some support to enrol in a course. While my organisation shut down, the employment cycle did not end for him. If one small-scale organisation with three people and barely any additional cost could enable this transformation at a very individual level, imagine what could be possible with a nexus of millions in population, hundreds of thousands of enterprises and national and international networks that enable and pivot these enterprises for success?

The ecosystem must expand to increase its outreach and bring into its folds the untapped skills and talents. Partnership between acumen, passion and raw talent can go a long way to propel Pakistan in a new dimension of growth.

The writer is a policy and governance advisor. His areas of expertise are governance, service delivery and digital government. He is a graduate of Lums, and holds a

post-grad degree from the University of Oxford.