"Your problem is solved." With those words, Sir Adamjee Dawood, one of Pakistan’s greatest entrepreneurs, saved the country from financial collapse a mere thirteen days after its independence. Though many entrepreneurs have played a pivotal role in the country’s creation, their sacrifices have often been forgotten and their accomplishments erased from our history.
On 27th August 1947, the newly founded country faced a debilitating financial crisis due to the largest migration in human history. When the queue of awaiting migrants became alarmingly long outside the State Bank building in Karachi, Pakistan’s founder Muhammad Ali Jinnah sent a message to Sir Adamjee Dawood.
The finance minister apprised Sir Adamjee about the financial crunch, who answered the call of the founding father with those four words – your problem is solved. Without hesitation or demand for sureties, he financed the nation by a blank cheque offer secured against his personal assets. This was not the first time that Sir Adamjee served the cause of Pakistan and there were others like him; Mirza Ahmed Ispahani, MA Habib and Sir Abdullah Haroon who supported the country through difficult times.
If a country does not celebrate and support its entrepreneurs, it ignores an important lesson from history; success of countries relies on wealth creation and innovation and entrepreneurs are intrinsically linked to both. A key role in South Korea’s economic development, from a GDP per capita of $329 in 1970 to $17,225 in 2009, is that of entrepreneurs like Mr Chung Ju-yung, who started as an auto mechanic and went to establish Hyundai Heavy Industries, the world’s largest shipbuilder. According to Asan Institute of Policy Studies in Seoul, one million people went through the vocational skills training program of Hyundai Industries between 1972 and 1982. The skills development was responsible for upward social mobility of 13% of South Korean households from poor rural to urbanized middle class. This is the power of great entrepreneurs and investment in skills enhancement is just one aspect of their impact, they create wealth that spreads across the ecosystem and generate taxes that fund public works.
Another example is the US, which owes its economic strength primarily due to an environment that celebrates and nurtures entrepreneurship. Much before Steve Jobs captured our imagination; entrepreneurs have been widely admired and celebrated throughout US history. A glance at the list of “Most Admired Americans of All Times” has statesmen, politicians, and social activists as well as entrepreneurs like Thomas Edison and Henry Ford; it's no surprise that its engine of growth is fueled by entrepreneurs. Recent research by Kauffman Foundation showed that 40 million or two-thirds of the jobs created in the US between 1980 and 2005 were from new ventures, or businesses that were less than 5 years old.
Contrary to widely held beliefs, Pakistan has much to celebrate about its entrepreneurs; from the audacity of Sir Adamjee Dawood in staking his personal wealth to bailout an infant nation to the new generation who are succeeding in spite of daunting economic and security challenges. One example of this success is when Pakistan Fast Growth 100 entrepreneurs, a ranking of fast growing private enterprises, competed with those from fourteen countries for a position on the AllWorld Arabia 500+Turkey ranking. Pakistan had seventy entrepreneurs represented in the ranking of the fast growing private enterprises, second only to Turkey, the highest number of women entrepreneurs from any single country including the fastest growing company managed by a woman entrepreneur.
These entrepreneurs are a profile in courage. On the night of 20th September 2008, when an IT Business Park was destroyed in an attack on the Marriott Hotel; Nayatel’s Wahaj Siraj went to work within hours and shifted the fiber-optic connection of the businesses to other locations to prevent disruption of services to clients in the USA. When the Sri Lankan cricket team was attacked on 3rd March 2009, only one block away, Kashif Haq of Corvit Networks worked through the raging gun battle to deliver the project on time. In times, when foreign firms are uncertain about sourcing work to Pakistan, his determination ensured credibility of Pakistani companies as reliable business partners.
These emerging entrepreneurs of Pakistan receive little support and yet they are the country’s greatest hope for economic progress. A new approach to development strategy is the “theory of positive deviance.” This approach suggests that instead of imposing outside-expert driven technical solutions for economic growth, we should seek to identify individuals that are creating economic opportunity in a challenging economic environment. These individuals have tested out and refined the business models that are successful in the local context. Therefore, facilitating their growth will be more effective and sustainable because we are tapping into resources, knowledge and practices that are rooted in local economy rather than conventional development solutions implanted from the outside.
The entrepreneurs of Pakistan 100 exhibit such positive deviance by growing their businesses at 55% per annum between 2008 and 2010, in the midst of a global downturn. However, the spread of entrepreneurial positive deviance is constrained by three factors; Access to finance, quality skilled workers and access to international markets. Stakeholders committed to the development of Pakistan, should design interventions that loosen these constraint through providing finance, vocational training and opening access to international markets. This could unleash pent up growth of these enterprises and create employment, wealth and taxes.
The youth across the Arab world protested a lack of inclusion in the process of governance. But underlying this discontent is the lack of economic empowerment. Pakistan faces similar challenges today and seeks its solution through the power corridors of the IMF, but in essence the solution already exists within the country. Entrepreneurs like the members of the Pakistan 100 are the economic builders of the nation. They can play a critical role in meeting the aspirations of the population and, as in the case of South Korea and the USA, be the agents for the country’s economic revival.
[Image of the Hyundai Shipyard in South Korea from Visit Korea.]