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Is Faisalabad a new emerging Tech Hub in Pakistan?

By August 12, 2020August 15th, 2020No Comments

By Zia Banday

StartupBlink, a Swiss Research Center, publishes ranking of global startup ecosystems on yearly basis. Its ranking covers 100 countries and 1000 cities. In its 2020 report, Faisalabad was included for the first time in its list of 1000 cities for the ranking of their respective startup ecosystems. Faisalabad was ranked at 998 in the list, third from the bottom. Other Pakistani cities include Lahore (271), Karachi (279), Islamabad (559) and Rawalpindi (977). As a country, Pakistan is ranked 82nd among 100 countries, whereas China and India are ranked at 14th and 23rd respectively. China has 24 cities included in the list, with six cities marked among top-100 startup ecosystems. India has 38-cities in the top-1000 list, among which 4-cities are included in top-100.

Now, another comparative benchmarking of startup ecosystems of cities is undertaken by San Francisco-based Startup Genome. It only ranks Top-100 startup ecosystems and none of the Pakistani cities is included in the list. However, there are number of cities from developing countries, such as China, India, Egypt, Indonesia, Turkey, Malaysia, Philippines, Uganda, Sri Lanka and others, which are included in this top-100 list. World is talking about Unicorns for long, which are private startups with a valuation of $1 billion. Among over 400 Unicorns worldwide, Pakistan doesn’t have a single Unicorn, even Indonesia has 5 startups in the Unicorn list.

It is important to differentiate a startup from a SME definition here. Against a conventional economy focus of a SME, a startup is involved in search of a scalable business with high growth prospects and greater technology linkage. And why countries are more focused on nurturing startups, it is owing to their rising contribution in enhanced productivity and jobs creation. Global startup economy is creating a value of $3 trillion. Seven out of top-10 largest companies belong to technology sector. And this journey is not abating any way. Pakistan, a country of 220 million, has yearly exports hovering around $24 billion. With a population of 8.4 million, Bangalore, the Indian city, has annual IT (Information Technology) exports of $38 billion, just one export category.

It appears that the tech competition has emerged more among cities than countries. This remains an urban phenomenon, where cities are vigorously competing for talent, technology and investment. City municipalities are aligning themselves with startup orientation for growth and sustenance. In case of Pakistan, the given figures and rankings doesn’t reflect much high on the official claims of the government on the country positioning in the tech world. Technology is moving in high gear, countries lagging behind will be on their own peril. In the interconnected world, even emerging economies are progressing up on tech to catch up with the developed countries. It is evident with the rising share of the cities from Asia-Pacific region in the above two global ecosystem rankings.

Pandemic of COVID-19 has shifted the paradigm more in the favor of tech sector, with greater flows in online transactions and interactions across various industry verticals. Now, where does Faisalabad lies in all this. It is a matter of fact that the city boosts of its over 100-years of entrepreneurial heritage. Dubbed as the Manchester of Pakistan, Faisalabad’s mainstay remains its resilient and dynamic business community. And now its new generation of millennials are engaged in breaking barriers in the technology sector. As per the figures of Faisalabad Chamber of Commerce & Industry (FCCI), the city has 188-IT Companies with over 5,000 employees, over 2,000 freelancers and annual internal remittances of $200 million. And it becomes more commendable, when one observes that the local tech economy has achieved this much without any credible state support. The city doesn’t have any technology park or commercial incubator or accelerator program for local startups. And this crippled ecosystem is not going to take Faisalabad much high on the global tech ladder. Human resilience has its limits in practical world.

It may be reiterated here that a sustainable tech hub requires collaboration and support of multiple stakeholders in inducing growth. Federal and provincial governments are playing their respective roles in facilitating tech economy. However, proximity of local stakeholders is more tangible and impactful for the development of startup ecosystem in Faisalabad. It is pertinent to mention here that the city has made its mark on the tech map due to its private sector. And for any progress on the tech path, the private sector has to lead the efforts, with government sector in tow. FCCI and local tech community will have to be engaged in forging a tech alliance for a methodical structuring of startup ecosystem in the city. Besides business community, this tech alliance will include government agencies, city universities and external support entities. FCCI has already initiated the journey with the launch of “Digital Faisalabad” portal, however a lot of work has to be done on the ground to pull the city up in an intensively competitive tech economy, which has larger international than domestic connotations. Faisalabad needs to learn from successful model, but it has to design and build its own path for the growth of startup ecosystem. Only in that manner, it will become a robust tech hub of the country.

The Author is a Development Consultant, who could be reached at zia.banday@outlook.com