Pakistan’s working-age population is facing underemployment and unemployment. According to a recent report by Seed Ventures, "Pakistan will need 36 million more jobs in the next 10 years with its population increasing by 44 per cent over the next 20 years."

It will be a challenge for the future governments. How will these jobs be created when, currently, the investment climate is weak and macro-economic indicators are poor?

It is imperative that the opportunity of capitalizing on the potential of a large young population is not lost and that spaces are created for young people to develop their talents and ideas into something meaningful.

The youth is has incredible capacity to contribute to the progress and development of the country. However, there is inadequate career counseling facilities regarding the future possibilities. In such a situation, creating opportunities and platforms for the encouragement and advancement of entrepreneurship, especially social entrepreneurship in the country is one appropriate possible solution.

Social entrepreneurship presents an ideal opportunity for the young in Pakistan to build innovative ideas into businesses and at the same time, contribute positively to society by addressing some of the critical development challenges faced by the country.

Developing a robust and vibrant social enterprise sector can contribute to addressing some of the most pressing development challenges while contributing to inclusive economic growth.

The window of opportunity provided by social enterprises (SEs) can only help demographic dividends if the youth bulge can be properly tapped to implement local development objectives.

SEs can play a key part of the solution by offering energetic, vibrant and sustainable opportunities for the economic engagement of Pakistan’s youth, reconnecting them with the society in meaningful and innovative ways, helping in the creation of assets in the deprived and marginalised communities, building skills and confidence of young people, and empowering them to lead independent lives.

Pakistan is a country of enormous potential for social entrepreneurs and innovators. An increase in the number of young entrepreneurs in the fields, such as health, education, consumer-oriented technology and environment is good, with young people from far-flung areas of Pakistan coming with innovative ideas and social business ventures. Rise of women entrepreneurs in the country is also an encouraging development.

SEs in Pakistan move away from the traditional public and private for-profit setups to represent an emerging and dynamic force to support innovation and reform in the way in which public services are delivered as well as an opportunity to build businesses which focus on the creation of social value.

The youth is unable to get proper benefit from this opportunity because of lack of policy, legal and regulatory support. The lack of direct financing and project financing, sector-specific capacity-building programmes and weak government support for social innovations is hindering the developing of SEs in Pakistan. The political, legal, social and business environment in the country has been uncertain.

The youth and gender aspects of SEs also require attention of public policy. Only 1 per cent of Pakistani women are participating in entrepreneurial activities and almost half do not have any formal education. Access to capital for women is a key issue due to a lack of financial literacy. Banks are also reluctant to give loans to women who do not have any male guardians.

The most significant challenge to the promotion of SEs is a fragmented set of public sector rules that govern the entry and survival of SEs in the market. There is no federal or provincial level policy for SEs. They usually end up competing with profit-making entities for their working capital loans (from the banking or non-banking institutions).

SEs unable to pay competitive salaries to their human resource also face a high attrition rate. In order to support trained human resource in this sector SEs do not receive any seed or augmenting capital from the public or private resources.

The role of government in developing an effective enabling environment for social enterprises to thrive is critical in accelerating the development of the sector. Creating an enabling environment for the development of a social enterprise sector requires policy and regulatory support.

Mainstreaming SEs in the development landscape of Pakistan requires the creation of a comprehensive SE policy that subsequently enables legal and fiscal frameworks. The Centre for Social Entrepreneurship (CSE) at the Ministry of Planning, Development and Reforms can formulate such a policy with inputs from an expert working group that can provide sectoral inputs.

The working group should inform in their report, regarding the policy support required by SEs at the various stages of evolution, survival and growth. The policy’s goal and objectives should be based on a vision, prepared and documented in consultation with the representatives of SEs.

On the information and data for policy formulation, there is currently no mechanism for collection, analysis and dissemination of information on SEs in Pakistan and only fragmented information exists within limited resources. The information available is general in nature and does not stand up to detailed analysis.

Therefore, there is an underlying need to develop research capacity on the SE’s contribution to national policies. The CSE at the Ministry of Planning, Development and Reforms should undertake comprehensive research annually into the status of the sector, identifying key growth patterns, changing operating environment, and accompanying challenges and barriers.