INP-WealthPk
Entrepreneurial orientation to open SMEs’ doors to innovation, growth
February 20, 2023
Saba Javed
Small and medium enterprises (SMEs) – making up 90 percent of all the enterprises in Pakistan – need entrepreneurial orientation (EO), which will open the door to innovative strategies for growth and encourage their participation in CPEC to bring about an improvement in the nation’s struggling economy, reports WealthPK. Entrepreneurial orientation helps create employment opportunities and ensures economic development. It has three dimensions – proactiveness, innovativeness, and risk-taking. EO influences small and micro small businesses in developing nations like Pakistan.
It helps promote development and improve the performance of Pakistani small and micro businesses. According to Asghar Nasar, Regional Coordinator of SMEDA (Islamabad and Rawalpindi), risk-taking and the capacity to have the lowest costs are typically the outcomes of innovativeness but Pakistanis are risk-averse instead of risk-takers. “Education is essential to promoting innovation in organizations. We must arrange these types of orientations so that we can generate entrepreneurs in our society. New methods and techniques must be introduced for SME entrepreneurs and also the long-term plan of instilling a higher-risk-taking culture among them,’’ said Asghar.
He said it would be helpful if the government developed a long-term entrepreneurship strategy for those Pakistanis who were more risk-averse than being risk-takers. “Once an entrepreneur’s risk-taking propensity increases, it may be easier for the existing SMEs to grow into stronger and larger entrepreneurial entities that will help with the country’s economic development,’’ he continued. “EO is very important for performance enhancement. Many enterprises fail in the early stages of development due to resource constraints. EO encourages freshly created businesses to use less costly strategies to improve performance,’’ said the regional coordinator of SMEDA.
“There are certain issues that SMEs are experiencing in Pakistan, for instance, lack of finance, low technology, lack of market information, limited human resource development and deficient initiatives at the government level to create awareness among the people and lack of guidance mechanism for small entrepreneurs. Inflation has also badly affected all the businesses in Pakistan. How can we get benefit from the CPEC? The situation is really alarming, as our economy is import-based; we must have entrepreneurial orientations to encourage small and micro small businesses.’’ According to Asghar, 90% of all the enterprises in Pakistan are SMEs; approximately 5.2 million of them are currently working, employing 80% of the labour force.
Their share in exports is 25% and their contribution to the GDP is 40%. As the SMEs sector is considered the backbone of a developing economy, the CEPC will provide great opportunities for smaller businesses to flourish in Pakistan. He said with the participation of SMEs in CPEC, Pakistani businesses will also learn from Chinese corporate entities. “Access to the latest technology will be easier for Pakistani SMEs through business cooperation with Chinese companies. There are immense investment opportunities for both Pakistani and Chinese SMEs in CPEC, especially in the tertiary sector, transportation, construction, education, tourism, energy, mining, agriculture, livestock, and logistics.
CPEC is a way forward for the economic revival of Pakistan and investment prospects are highly favourable for local and international SMEs in the country,’’ Asghar added. He said the SMEDA authorities were working on a plan to create partnerships and joint ventures of Pakistani and Chinese entrepreneurs. SMEDA will also facilitate the entry of SMEs in the special economic zones (SEZs) that are being set up countrywide, he added. Asghar said entrepreneurial orientation had helped the SME sector flourish in the past. SMEDA took this initiative in collaboration with the Higher Education Commission to establish incubation centres in public universities to promote SMEs. Technical training for workers is necessary to boost skills, increase productivity and make them compatible with the emerging opportunities from CPEC, he emphasised.
Credit: Independent News Pakistan-WealthPk
