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It is believed that Pakistan’s digital economy will follow a similar growth trajectory to India, but with a lag of about five to six years. This implies that the digital economy in Pakistan carries immense potential and is likely to see very rapid growth in the next five years or so. This paper provides an overview of Pakistan’s digital economy in terms of international players, successful local businesses and rising stars in different segments of the industry. We also evaluate the role played by incubation centers. The industry’s emerging financial landscape appears to be attracting international venture capital firms, which is surprising, given the country risk and monitoring and control issues that are usually seen as binding constraints to investment. However, these investors use models tested in Silicon Valley and in countries such as India to estimate the potential for increase in the capital valuation of digital businesses in Pakistan. This development has also started to attract local investors. As a result, we are seeing the emergence of a venture capital industry in Pakistan. Finally, we examine the policy environment in the country and find that the existing tax policies, which were designed for traditional businesses, could be a major obstacle to the growth of the digital economy. We conclude by recommending that the government review its tax policy in view of the different nature of digital businesses and adapt it accordingly.
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The Lahore Journal of Economics
21 : SE (September 2016): pp. 273312
Entrepreneurship and Innovation in the Digital Economy
Naved Hamid* and Faizan Khalid**
Abstract
It is believed that Pakistan’s digital economy will follow a similar growth
trajectory to India, but with a lag of about five to six years. This implies that the
digital economy in Pakistan carries immense potential and is likely to see very rapid
growth in the next five years or so. This paper provides an overview of Pakistan’s
digital economy in terms of international players, successful local businesses and
rising stars in different segments of the industry. We also evaluate the role played
by incubation centers. The industry’s emerging financial landscape appears to be
attracting international venture capital firms, which is surprising, given the
country risk and monitoring and control issues that are usually seen as binding
constraints to investment. However, these investors use models tested in Silicon
Valley and in countries such as India to estimate the potential for increase in the
capital valuation of digital businesses in Pakistan. This development has also started
to attract local investors. As a result, we are seeing the emergence of a venture capital
industry in Pakistan. Finally, we examine the policy environment in the country
and find that the existing tax policies, which were designed for traditional
businesses, could be a major obstacle to the growth of the digital economy. We
conclude by recommending that the government review its tax policy in view of the
different nature of digital businesses and adapt it accordingly.
Keywords: Entrepreneurship, innovation, economy, Pakistan.
JEL classification: L26.
1 Introduction
The digital economy has grown rapidly since the 1990s and, today, is
a dominant force in the world economy. According to the European
Commission (n.d.), “the digital economy now contributes up to eight percent
of the GDP of G-20 major economies [and is] the single most important driver
of innovation, competitiveness and growth.” In a recent report, McKinsey
* Director, Centre for Research in Economics and Business (CREB), Lahore School of Economics.
** Visiting faculty, entrepreneurship and marketing, Lahore School of Economics.
The authors wish to acknowledge the excellent research assistance provided by Junaid Shair, Rafiq
Khan and Beenish Amir (summer interns) and by Fatima Tanveer (research assistant, CREB).
Naved Hamid and Faizan Khalid
274
estimates that, in 2015, the value of world trade in digital services surpassed
that of goods (Manyika et al., 2016). This dominance is also evident from the
fact that, in 2016, five of the ten largest companies in the world by market
capitalization were technology companies: Apple, Alphabet, Microsoft,
Facebook and Amazon (PricewaterhouseCoopers, 2016).
India’s higher economic growth since the 1990s owes a great deal to
the rapid expansion of information technology (IT) and IT-enabled service
exports (which, in 2015, exceeded $80 billion) and more recently to the rapid
growth of digital businesses catering to the domestic economy in areas such
as e-commerce, on-demand services, finance and media. IT companies such
as Tata Consultancy Services and Infosys are among the top five companies
by market valuation in India.
In most developing countries, the vast majority of first-time
Internet users go online using their mobile phones rather than computers.
Digital businesses catering to the domestic market in India, therefore, took
off only with the availability of fast mobile Internet services, following the
launch of 3G/4G services in 2009. Since then, its digital economy has
expanded rapidly. A number of companies, such as Flipkart, Snapdeal,
Shopclues (e-commerce marketplaces), Olacabs (on-demand
transportation), Paytm (fintech), Hike and Zomato (social), are now
counted as global unicorns” – private companies with a market valuation
of over $1 billion (CB Insights, n.d.).
Pakistan has a number of well-established IT companies such as
Systems Ltd and NetSol, but digital business startups catering to the
domestic market are a more recent phenomenon. The growth of digital
businesses and new startups has accelerated since the launch of 3G/4G
services in Pakistan in mid-2014. The Fletcher School at Tufts has
developed a digital evolution index (DEI) that analyses the key underlying
drivers and barriers governing a country’s evolution into a digital
economy. Its report states that “each emerging e-commerce market will
chart its own path but neighborhoods matter [that is] countries in
close geographic proximity seem to display similar trajectories”
(Chakravorti, Tunnard & Chaturvedi, 2014).
Thus, in a sense, Pakistan could be about five years behind India in
this area. In 2013, a year before 3G/4G services were launched, Pakistan was
not among the top 50 countries based on its DEI, while India was ranked at
42, having shown among the highest rates of improvement in its DEI in the
Entrepreneurship and Innovation in the Digital Economy
275
period 200813. One can expect a similar improvement in Pakistan’s DEI
score by 2018.
In this paper, we look at digital businesses and startups in Pakistan
in terms of the entrepreneurial environment, the growth trajectories of
selected successful businesses and startups and the constraints to growth in
this sector.
1
The aim of the paper is threefold. First, we show that the digital
economy is expanding rapidly in Pakistan and that emerging companies
could be a major source of investment and growth over the next decade.
Second, highlighting the immense potential of the digital economy and
identifying the constraints to its growth may persuade policymakers and
other stakeholders to take measures to mitigate these constraints. Third,
since the process from startup to established company in the technology
sector is very rapid,
2
this allows us to clearly gauge which factors either
hinder or promote entrepreneurship in Pakistan. This could provide useful
insights for developing policies to promote entrepreneurship in the rest of
the economy as well.
The rest of the paper is organized as follows. Section 2 examines the
potential of the digital economy in Pakistan, assuming that it will follow a
trajectory similar to that of India. Sections 3 and 4 provide an overview of
emerging players and segments of the digital economy. This is followed by
a more detailed look in Section 5 at some of the success stories in the
industry. Section 6 describes the role of incubation centers and co-working
spaces in promoting digital startups. Sections 7 and 8 look at the emerging
financial landscape induced by the financing needs of new digital businesses
and the associated potential for capital gains. Section 8 examines policy
issues, particularly those that might retard the growth of the digital
economy, and Section 9 concludes the paper.
2 The Potential of the Digital Economy
The digital economy is sometimes called the new economy or the
Internet economy, but a more concrete definition is provided by a US
Department of Commerce report, The Emerging Digital Economy, which
“characterizes a digital economy [as] based on industries and forms of IT-
enabled business activity …. These [activities] include the IT industry itself,
electronic commerce among businesses, the digital delivery of goods and
1
We have interviewed a number of people involved with the digital economy in various capacities
(see Appendix).
2
Entrepreneurs go from an idea to a company with a capital valuation of over Rs1 billion in only a
few years.
Naved Hamid and Faizan Khalid
276
services and the IT-supported retail sales of tangible goods and services”
(cited in Kling & Lamb, 2000, p. 296).
In Pakistan, the third segment is already fairly well developed, with
activities ranging from provision of software and business services to
international and local businesses by firms such as Systems and NetSol to
gaming studios, mobile app developers and freelancers.
3
However, in this
paper, the term digital economy refers only to the fourth segment: the IT-
supported sale of goods and services to consumers.
The potential of the digital economy in Pakistan is tremendous,
given the country’s large consumer base. Its population is over 190 million,
of whom more than 50 percent are in the 1040-year age group (Pakistan,
Ministry of Finance, 2014), that is, people who are mostly literate and
comfortable using digital technology. Moreover, Pakistan is probably one of
the most urbanized countries in South Asia. A recent World Bank report on
urbanization in South Asia points out that,
According to the agglomeration index, an alternative
measure of urban concentration, the share of Pakistan’s
population living in areas with urban characteristics in 2010
was 55.8 percent. This compares to an urban share of the
population based on official definitions of urban areas of just
less than 36 percent, suggesting the existence of considerable
hidden urbanization (Ellis & Roberts, 2015).
Thus, a large proportion of the population has exposure to a wide
range of consumer goods and advertising and is within easy reach of private
delivery services. Finally, there is also considerable spending power: Credit
Suisse’s Global Wealth Report for 2015 notes that Pakistan’s middle class
consists of 6.27 million people,
4
making it the 18th largest middle class
worldwide (Shorrocks, Davies & Lluberas, 2015).
The key to realizing the potential of the digital economy is
widespread access to the Internet. This access has grown exponentially in
Pakistan since the launch of 3G/4G services in 2014. For instance, the total
number of broadband subscribers (including cellular subscribers) has
increased from 3.8 million in 2013/14 to 34.5 million (including 3G/4G
subscribers) in July 2016 (Pakistan Telecommunication Authority, 2016). Just
how phenomenal this growth has been is evident from the fact that, in 2016,
3
Pakistan is among the top five freelancing countries in the world (Elance, n.d.).
4
This is more than one fourth as large as India’s middle class, which was 23.67 million in 2015.
Entrepreneurship and Innovation in the Digital Economy
277
17.8 percent of Pakistan’s population had Internet access compared with 11.4
percent in India, where 3G/4G services were launched in 2009.
5
In brief, the size of Pakistan’s consumer market is in the range of one
sixth to one quarter that of India and Internet access is, if anything, higher.
Thus, as noted above, the e-commerce market in Pakistan should follow a
similar trajectory to that of India. Estimates of India’s e-commerce market in
2015 ranged from $13 billion to $23 billion and it is projected to be growing
at about 30 percent per annum. This provides some indication of the future
of Pakistan’s e-commerce market, which was estimated to be in the range of
$30 million to $60 million in 2015, that is, it should reach between $2 billion
and $5 billion by 2020. This would imply a growth rate of over 100 percent
per annum, which is similar to the rate achieved in the last five years.
3 The Digital Players
As today’s web economy develops rapidly, several categories of
digital players have emerged: from new businesses entering the industry to
the global giants. These digital players are classified broadly as (i)
international companies operating worldwide, (ii) the successful digital
companies within the Pakistani ecosystem and (iii) rising stars businesses
that have shown a remarkable growth trend and received risk financing in the
short time since their establishment (Figure 1). These categories are discussed
below. Since case studies of several successful digital companies are presented
later in this paper, this section describes only some prominent rising stars.
Figure 1: Categories of digital companies in Pakistan
5
In April 2016, there were 151.1 million broadband subscribers in India, including 133.5 million
3G/4G subscribers (Telecom Regulatory Authority of India, 2016).
Naved Hamid and Faizan Khalid
278
3.1 International Companies
As the Internet economy fundamentally reduces the need for space
and physical presence, today’s international giants have no geographical
limits. With the growth of the digital economy and as e-commerce expands,
global players see Pakistan as a potentially lucrative market. Despite security
risks and other concerns, a number of international companies have set up
operations in Pakistan in the last few years. One of the biggest entrants is
Rocket Internet, a Germany-based Internet company valued at more than $8
billion. It has launched several ventures in Pakistan, including Daraz (an
online shop for shoes and fashion), Foodpanda (an online food delivery
service), Kaymu (an online marketplace for used or new items), Lamudi (a
property portal) and Carmudi (an online platform for the sale and purchase
of cars, motorcycles or commercial vehicles).
In September 2015, Daraz, which operates in Bangladesh, Pakistan
and Myanmar, raised $56 million (€50 million), not from Rocket’s regular
investing partners, but with the CDC Group
6
leading the round
(ProPakistani, 2015). Simultaneously, there has been substantial investment
by Naspers
7
in expanding its OLX venture in Pakistan (a classifieds platform
with a presence in more than 40 countries). The launch of Uber Technologies
in Pakistan in March 2016 shows growing international recognition of the
market potential of the country.
3.2 Recent Local Successes
The mid-2000s saw the first wave of local online business startups in
Pakistan. Recent successes in this group include Zameen.com, Rozee.pk,
PakWheels.com and Shophive.com (see Section 5 for case studies). These
companies had the first-mover advantage and, as pioneers in the services
sector, established their brand names as leaders in markets such as real
estate, jobs and automobiles.
The success of such firms has attracted additional e-commerce
investment. Some of these businesses have even drawn international venture
capital funds of approximately $39 million from the US, Southeast Asia and
Europe. With such injected capital and ever-expanding Internet access, these
companies are constantly changing scale and consistently creating new
opportunities. These investments are used not only to expand capability, but
also for advertisement and promotion. The latter has helped these firms
6
A development finance institution owned wholly by the UK government.
7
A global Internet and entertainment group and one of the world’s largest technology investors.
Entrepreneurship and Innovation in the Digital Economy
279
establish (in their stakeholders’ eyes) their brands as valuable commodities
to achieve the expansion targets set together with their parent investors.
3.3 Rising Stars
A wave of young entrepreneurs in the digital economy has
emerged since 2012. They have turned novel ideas into promising startups,
with innovations in areas ranging from e-commerce to music and
broadcasting and from food to transportation and entertainment. The
availability of real-time information to consumers and the low cost of
accessing it has transformed the way people shop. Some entrepreneurs
who quickly realized that this change was a window of opportunity have
embarked on the road to building the new digital economy and, in a few
years, made a name for themselves.
A few such companies are described below to show the diversity and
innovativeness of the types of businesses being established.
Markhor (2012) specializes in quality footwear for men by producing
shoes in Pakistan and selling them directly to customers in the US. Its
unique selling proposition is to eliminate intermediaries and provide
an alternative to mass-produced shoes. The company became popular
when it successfully ran a Kickstarter campaign. It was able to generate
more than $100,000 from Kickstarter on receiving more than 500 orders.
Markhor has been recently incubated with Y Combinator in San
Francisco (Husain, 2015a).
XGear (2014) aims to revolutionize vehicle and driving management
with an innovative device that can be plugged into the car’s on-board
diagnostics port under the steering wheel. Once connected, it transmits
data wirelessly to the owner’s online account. This data can be accessed
online via mobile phone or computer. It has proved very useful in the
fleet management of company cars (Imran, 2014).
Wifigen (2014) gives business owners innovative ways to understand
their consumers and let them communicate with each other, using a
marketing and analytics tool for customers and brands. It provides free
Internet access to its customers and in return gains a social media
following and customer data, which helps these brands target their
customers more effectively. The company was recently funded,
bringing its valuation to $1 million (Husain, 2015c).
Patari (2015) is the largest Pakistani music streaming network. Patari
aims to bring all the music produced in Pakistan onto one digital
Naved Hamid and Faizan Khalid
280
platform through which users can access this collection. The website
currently hosts some 600 artists and 20,000 songs. These numbers are
expected to grow in the future (Salahuddin, 2015).
Finja (2016) is a fintech startup that aims to revolutionize payment
processes from traditional banking to new ways of digital banking. The
founders of the company are industry veterans such as Qasif Shahid,
who has over 20 years’ banking industry experience. It also receives
support from Monis Rahman (of Rozee), who has helped Finja secure
an investment of $1 million from a venture capital firm based in
Stockholm (Dodhy, 2016b).
Sukoon (2016) is a Karachi-based home repair service that aims to
revolutionize how people employ handymen at their homes and
offices. It provides services such as plumbing, electrical work, painting,
masonry, AC repair and carpentry. Sukoon was also funded recently
by a pool of Pakistani investors that include Humayun Zafar of
CresVentures, DotZero and The Indus Entrepreneurs (TiE) (Islamabad
chapter) (A. Rizwan, 2016).
4 Segments of the Digital Economy in Pakistan
The growing digital economy has had a sizeable impact on
traditional services offered in the market. Given the hyper-connectivity
among consumers, single vendors and third-party sellers, digital businesses
are now taking away the market share of traditional businesses. Digital
companies offering these services are empowered by the extensive
information available on their customers. These changes are taking place in
the consumer goods segment as well as in the services sector. We identify
four broad segments of the digital economy: (i) marketplace or classifieds,
(ii) e-commerce, (iii) services and (iv) digital advertising and web
enablement, which are briefly discussed below.
4.1 The Marketplace (Classifieds)
An online marketplace aims to provide a single trading platform to
multiple third parties. It might cater to a single or multiple genres of
products or services. Marketplaces in the digital economy operate in three
forms: land markets, job markets and multiple markets (Figure 2). Zameen
and Lamudi are successful examples of marketplaces servicing real estate
players. Zameen has acquired funding of $29 million, making it the biggest
provider in the online land market. Other mega-players operating in
Entrepreneurship and Innovation in the Digital Economy
281
Pakistan include Rozee (the job market), OLX (multiple markets, including
second-hand or used goods) and PakWheels (automobiles).
Figure 2: Market types and companies
Online classifieds are a convenient, cost-efficient way of exchanging
products and services and pose tough competition to existing mechanisms
of classified advertising. Traditionally, selling many items such as furniture,
used electronics and automobiles was very difficult and people relied
largely on references or brokers to make the sale. These platforms provide a
way for sellers to expose their products to an enormous customer base.
4.2 E-commerce
Pakistan has seen a rise in e-commerce in the last five years, with
many businesses rapidly launching their services online. Typically using the
Internet, e-commerce facilitates the trading of goods between different
parties. Such commerce is divided into two segments: business-to-business
(B2B) and business-to-consumer (B2C).
In Pakistan, most e-commerce is B2C and can be further divided into
three types, which overlap in some cases, although it is still useful to make
the distinction (Figure 3). The first category includes the online stores of
traditional retailers with brick-and-mortar stores. Many successful local
brands such as Bareeze, Khaadi and StoneAge now have online stores. The
second type are digital retailers such as Homeshopping, Shophive and
Symbios, which have their own inventory and a limited number of selected
sellers, but deliver all goods themselves. The third segment of e-commerce
includes digital businesses such as Daraz and Kaymu, which provide a
platform for third-party sellers and span a wide range of products from
hundreds of sellers.
Naved Hamid and Faizan Khalid
282
Figure 3: E-commerce types and companies
4.3 Services
Some noteworthy innovations have been made in the online services
industry in Pakistan. Significant new entrants have emerged in major areas
such as transportation, delivery and entertainment (Figure 4). Most known
brands in each category have seen tremendous growth and acceptance in a
short span of time. Careem, Uber and Savari have all started successful
operations in the personal transportation (ride-on-demand) segment, while
delivery services have grown rapidly because of companies such as
Roadrunner, Delivery Chacha, Foodpanda and EatOye. Other service
providers such as Bookme, Javago and MyTicket help in booking cinema
tickets, hotel rooms and airline, train and bus tickets.
Figure 4: Service areas and companies
4.4 Digital Advertising and Web Enablement
These companies provide a range of services with the aim of
delivering complete online solutions to their clients. The key services they
Entrepreneurship and Innovation in the Digital Economy
283
offer include e-commerce solutions for traditional services sector businesses
(brick-and-mortar retailers), including website development and web-based
customer services. They also provide alternative marketing and brand
development services through social media marketing and website solutions
that allow media companies (in print, TV and radio) to monetize their
content and services. Bramerz is a market leader in this field (see Section 5).
5 Some Success Stories
This section provides a number of case studies, describing their
operations and associated challenges and constraints.
5.1 Rozee
Rozee was founded in 2005 by Monis Rahman as a job portal to post
jobs online for his existing venture, Naseeb (a social networking site he had
developed earlier).
8
In 2007, he began turning it into a business and hired the
first salesperson. Those who had invested in Naseeb, which was listed in the
US as a C-corporation, were rolled onto Rozee, a Pakistani private limited
company. After the first round of investment, Rozee became a fully owned
subsidiary of Naseeb.
Rahman feels that his experience as an entrepreneur in Silicon Valley
has been very beneficial. In addition, having worked with an organization
in the US has fostered his investors’ trust in the business and helped
transactions be carried out faster. Following US regulations in terms of
finance also gives his investors a sense of security.
5.1.1 Business Model and Operations
As an online job marketplace, the company has changed how
Pakistan looks at online enablement. Rozee caters to employees with an FSc
degree or higher, but predominantly advertises jobs that require at least a
Bachelor’s degree. It has moved from processing around 700 job applications
a day in 2008 to 40,000 job applications a day in 2015/16. The Rozee team,
which consisted of around 18 people in 2008, has grown to 280 people across
its offices in Lahore, Sialkot, Faisalabad, Gujranwala, Riyadh and Jeddah.
Initially, Rozee did not charge employers for job listing, but for
conducting CV searches. The business model has evolved over time and
Rozee now offers supplementary services around its core product of job
8
This case study is based on the authors interview with Monis Rahman, the CEO of Rozee.
Naved Hamid and Faizan Khalid
284
listings for all those who can pay for the additional services. ‘Insta-match’ is
an algorithm that highlights people who have not applied for the job, but are
predicted as a good match. There is an option to brand jobs, where Rozee
highlights an employer’s brand name and they can post their logo with it.
Rozee also develops hiring sites for organizations such as Mobilink and
Engro. These jobs are posted on Rozee’s website. It also sells banner
advertisements on its website to monetize the substantial traffic it receives.
Rozee’s philosophy is that it does not, and will never, charge
jobseekers to apply for a job. Over time, it has realized the need for improved
CV writing as very qualified people were losing out because their CVs were
so poorly written. Now, Rozee charges from Rs1,500 to Rs12,000 for senior
management level CVs. It also includes a priority feature for Rs3,000 a year
that gives jobseekers insight into jobs and analytics such as Linkedin’s
premium account or Glassdoor. The analytics include the median and mean
pay for similar jobs, the number of applicants and the customer’s relative
rank. Rozee believes there is scope for improving this service. It plans to add
an assessment arm to its functions whereby it will offer tests that employers
can use to gauge a prospective employee’s credentials. These can also be
added to an applicant’s CV.
By allowing employers and employees to connect online, Rozee has
enabled around a million people to find jobs at a fraction of the money and
effort involved in traditional newspaper advertisements. Companies,
especially startups, which initially found it very hard to advertise jobs, can
now do so cheaply and this helps them grow faster.
5.1.2 Financing
In 2008, Rozee became the first Internet company in Pakistan to raise
a venture capital investment of $2 million. In 2010/11, it issued a convertible
note in the US. The investors included both old investors and a few new
ones. The note was converted into equity along with the round Rozee did in
May 2015 when $6.5 million was raised from a Swedish and UK-based fund,
which are both organized by one group. With more negotiating power and
conditions in Pakistan improving, Rozee was able to choose from four funds
and had very entrepreneur-favorable terms.
5.1.3 Constraints and Challenges
Although Rozee is an ‘online’ job portal, only 25–30 percent of its 280
employees are part of the IT department. Finding it hard to convince
Entrepreneurship and Innovation in the Digital Economy
285
companies to hire online, it has a massive sales team that accounts for more
than 50 percent of its staff. In terms of human capital, Rozee believes that
Pakistan lacks certain skills largely because the ecosystem does not
incentivize people to learn those skills. There are many jobs for which it has
had to ‘groom’ employees who were smart enough to learn quickly.
However, it has not faced any shortage of IT employees, requiring fewer
than 100 employees in that capacity.
Rozee has been used by 65,000 employers to date. Around 400
organizations in Pakistan use hiring sites through Rozee. These include large
organizations such as the United Nations, banks and telecom firms. The
product is very cost-effective for companies as Rozee charges them only a
fraction of what it would cost in-house. However, as a pioneer in this
segment in Pakistan, it was very difficult for Rozee to convince companies
to join it. It had to plan and execute job fairs on the ground, which were
attended by around 145,000 jobseekers. Employers were invited to set up
booths. This was one way Rozee was able to show that its online presence
was a reality and not just virtual. It also employs a large sales team that
interacts with employers in person and persuades them of the potential
benefits of moving online so that they are comfortable with the idea of
posting jobs online.
It is now working on an advertisement campaign to reach the mass
market of employers who have yet to work with Rozee. It has hired an
advertising agency and plans to use conventional channels such as the
television and print media, which is necessary to change people’s views.
The scale it is aiming at needs such advertisement to reach small towns.
Rozee targets mainly businesses and not jobseekers. People are hesitant to
hire online because they have never done so. Over time, it will gain
acceptance, but by undertaking this kind of advertising, Rozee is speeding
up the process.
Although Rozee is eyeing other foreign markets, having established
a reputation in the Middle East for being hardworking, it is waiting to prove
itself before expanding abroad any further. In Saudi Arabia, it caters to the
domestic market where it matches local people to local jobs. Rozee also plans
to work down the chain and include jobs for unskilled workers. With this, it
wants to establish itself for blue-collar job openings. Rahman has a personal
interest in this segment. However, the financial feasibility of such a task is
very long-term. Currently, blue-collar workers are hired at their own
expense in the Middle East. Employers do not pay to hire them as they do
for white-collar jobs.
Naved Hamid and Faizan Khalid
286
Rahman is also incubating or mentoring six companies. Being part of
the industry gives him an opportunity to identify good ideas and support
them either financially or through nonfinancial mentoring. Easy Tickets is a
website that allows customers to buy movie tickets in real time. It is linked
to 12 cinemas all over Pakistan and is integrated with all banks with kiosks
at the cinema where tickets bought online can be printed. Travelplay caters
to airline tickets, car rentals and hotel bookings. He also supports Pring, an
SMS platform, and Checkin, an air travel-related online startup.
Rahman is risk-averse when it comes to investing in startups. He
invests only when entrepreneurs have started showing numbers and their
ideas appeal to him. The funding is on an individual basis: he and his friends
club together like an informal venture fund. Everyone gets the same
investment terms and they trust his decisions. The goal is to invest $100,000
or so and ensure the startup reaches the traction stage and begins growing
from a revenue perspective. With Rahman’s links to international funds,
they aim to raise an investment round of $1 million3 million.
5.2 PakWheels
PakWheels, an online marketplace for buying and selling used cars,
was founded in 2003 by Hanif Bhatti and a few friends. It has now become
a platform for automotive enthusiasts.
9
The CEO of PakWheels, Raza
Saeed, along with his friend Suneel Sarfaraz, bought PakWheels in 2008.
Saeed had started a software development and consultancy business
named Uraan. Later, in 2005, he cofounded Confiz with Zartash Uzmi.
Confiz employs over 300 people and provides mobile solutions, enterprise
resource planning and content management services to Fortune 500
companies such as Macys and Walmart.
In 2008, in partnership with Sarfaraz, Saeed acquired PakWheels. It
was still a small venture but Sarfaraz’s significant business experience and
Saeed’s knowledge of software solutions made it possible for them to
improve the business model significantly. PakWheels has grown by 20 times
as much, making it the largest online community-based automobile website
in Pakistan.
5.2.1 Business Model and Operations
PakWheels has been in business for about 13 years and is therefore
ahead of other companies in terms of market penetration. It is a platform
9
This case study is based on the authors interview with Raza Saeed, the CEO of PakWheels.
Entrepreneurship and Innovation in the Digital Economy
287
for buyers and sellers to purchase and sell used vehicles online, and also
serves as a discussion forum for users to share information and suggestions
on new automobiles or brands available or to discuss issues regarding their
automobiles.
The website offers research on new cars, compares different cars and
provides blogs and other news. It also provides specialized reviews that
people find useful when deciding which car to buy, used or otherwise. The
decision to buy a car is the second biggest decision a person makes and
PakWheels provides services for every step, from the decision to buy a
motorcycle to the decision to upgrade to a new car. Specialized tools such as
CarSure and car valuations have been added to the site. Under the CarSure
option, customers can have their cars inspected by a team.
PakWheels has multiple sources of revenue, primarily the
advertisements that FMCGs put up on the website to reach the customer
base of the company. Advertisements by car companies and specialized
offers for dealers are also posted on the website. Even private dealers who
wish to sell used cars have their ads featured on the website for Rs1,000.
5.2.2 Financing
PakWheels was acquired using money raised from Confiz. The equity
is divided between the owners and shareholders who own a significant
minority. PakWheels has had only one round of venture capital funding in
which it managed to raise $3.5 million from an international investor. The
company has made small investments, such as in Autogenie. It has also
invested in two external startups (urbangalleria.com and tripkar.com) and
incubated several other startups. Saeed believes it is important to give
startups time and nurture them properly if investing in them.
5.2.3 Issues and Constraints
PakWheels has around 150 people working in Karachi, Lahore and
Islamabad. The workforce consists of both IT professionals as well as people
with a business background. There are 20 product engineers, 10 marketing
people and the rest are part of the car inspection and sales teams.
According to Saeed, technology companies have not been able to
create more skill sets and there is a problem finding the right talent for an
organization. The basic skill set required at PakWheels is project
management, analytics, user experience, user interface design, sales and
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digital marketing. Managing employees becomes difficult when certain
skill sets are in great demand. In future, PakWheels aims to be with the
customer through all steps related to car purchase and maintenance. Car
inspection and transaction services on the customer’s behalf are a prospect
it plans to consider.
5.3 Shophive
Arslan Nazir, a graduate of the Nottingham Business School, started
an online retail business in electronics in 2002 as his family had run a similar
business for some years. In 2006, he launched Shophive.
10
He started the
business with limited resources and worked from home. He then hired two
people for content and delivery. Within a year, he had moved into an office
with six employees.
For the coding and design of his website, he gave two of his friends a
20 percent stake each in the business as he was short of cash. Nazir used
bootstrapping to keep costs low and reduce the need for external finance.
Within a short time, his friends lost interest in the idea and started fulltime
jobs of their own, while Nazir invested even more in the company, seeing
immense potential in the industry. Later, he bought back the 40 percent equity
his friends had owned, giving him 100 percent ownership of the company.
5.3.1 Business Model and Operations
Shophive was initially used by customers as a reference website for
comparing prices and products. Gradually, its own sales started growing.
Publicizing the business online was hard at the time as social media were
not as active. In order to promote the business, Nazir offered friends a
discount of up to 30 percent to change their status on MSN to “Shophive”
and spread the word. This worked as people became curious and found out
more about the business. Shophive has yet to market its brand widely and
relies on repeat orders and referrals as its main source of traction.
Shophive was a pioneer in e-commerce in Pakistan when it began in
2006. It focused on providing ‘genuine goods, which it identified as an
important niche, given the large number of fakes and copies being sold in
the market. When it initially tried to market this idea, people did not trust it
and the company had to state it was a genuine seller on the website. Over
time, people realized that Shophive dealt in genuine products and the word
spread. It expanded from electronics to other goods and now sells over
10
This case study is based on the authors interview with Arslan Nazir, the CEO of Shophive.
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30,000 products. The company is focusing on bigger-ticket items, based on
the trust it has earned among its customers. Shophive has four different
modes of functioning: a just-in-time purchase system, inventory, resale and
imports. Imports take around two to four weeks for delivery and orders are
placed in advance.
Shophive receives 60 percent of its orders from Lahore, 15 percent
from Karachi and the remaining from Islamabad, Rawalpindi and the rest of
the country. It delivers to more than 200 areas in Pakistan through TCS. It
currently has one large warehouse in Lahore. For most items, orders are
delivered on the same day within Lahore. For other cities, delivery takes a
day. Bigger products such as refrigerators are delivered within three to five
days overland. There are also two pickup points in Lahore that cater to
clients who want to avoid paying delivery charges.
Shophive has only one retailer for each product it offers, who is
thoroughly examined against quality parameters to ensure the quality of the
supplier and reduce any confusion for the consumer. It also makes sure that
retailers have authentic rights to sell the product. Everything sold on the
website is guaranteed to be genuine. Once the product is ordered, it is sent
by the retailer to Shophive, where it is checked against the order, inspected
and delivered to the client in time.
5.3.2 Constraints and Challenges
When Shophive began operations, cash-on-delivery was not
functional in Pakistan, not even in Lahore. It then opened small back-end
offices in Faisalabad and Islamabad so that its riders could deliver via cash-
on-delivery. Nazir believes this was a blessing in disguise as the company
had to provide excellent service to attract clients. Initially, clients purchased
cheaper products, but the good service they received built trust and bigger-
tickets items became more popular. At the time, online card payment did
not work very well and Internet bank transfers were used instead. Even
today, bank transfers are preferred, particularly for big-ticket items. The
industry average is 95 percent cash-on-delivery and only 5 percent in online
payments, whereas Shophive has 25 percent in online payments, which
includes 20 percent through Internet banking and 5 percent via credit card.
Shophive has signed up as a payment merchant and accepts all credit
cards. It will start accepting debit cards as soon as OneLink is integrated with
its system. The payment system is 3D-protected and customers are
redirected to Mastercard or Visa websites to complete the payment process,
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which ensures the security of their financial information. Currently,
payment methods such as Easy Paisa, Mobicash, U-pay and Time Pay are
also used, but they are expensive alternatives and are usually used only for
small-ticket items.
Initially, Shophive’s policy on returns was to replace defective items
without any restriction. This created problems when clients started taking
undue advantage of the policy, forcing Shophive to pay out of its own pocket
to avoid negative online reviews. Nazir used this as a marketing strategy
and clients who had used the policy to their benefit spread the word. Over
time, Shophive changed its policy and currently offers a seven-day
replacement policy in case of a manufacturing defect or damaged item. If the
product does not match its details online, the entire amount is refunded.
In terms of human capital, Shophive has not had any issues. It now
has around 60 employees, with seven to eight staff in managerial positions,
seven to eight in IT, ten in sales and the rest in accounts, fulfilment centers,
deliveries and packing. Nazir handles business development and customer
services himself. His employees have been working at Shophive for four to
nine years and since they are well taken care of, turnover remains low. The
company uses referrals from existing employees when hiring new staff.
The heavy tax burden and complex FBR rules for the industry pose
a problem. Shophive has to comply with tax laws such as withholding tax
and sales tax, which are cut at source. Unlike offline retailers, all Shophive
transactions are fully documented and there is no possibility of tax evasion.
The nature of cash-on-delivery is problematic as some delivery staff have
taken money from clients and not deposited it with Shophive.
Although Nazir attends startup events if he has time, he does not
plan to incubate any firms as he wants to focus on Shophive. In 2011, he
started a clothing website, Collection.pk, which he closed down two years
later as it made him lose focus on Shophive. While Shophive is already one
of the largest electronic retailers in Pakistan, Nazir has ambitious growth
plans and is considering venture capital funding, specifically from
international funds. One of the main reasons he is looking towards external
funds is to expand the marketing budget. He plans to open warehouses in
Karachi and Islamabad and multiply the number of pick-up points from six
to 30 by 2020, with a presence in other cities. Moreover, Nazir plans to
continue the horizontal and vertical growth in products that has always been
part of his vision for Shophive.
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5.4 Bramerz
The name of the company, Bramerz, is derived from the first names
of its founders: Badar Khushnood, Amir Sarfraz and Zeeshan Saleem.
11
All
three are alumni of Government College and the Lahore School of
Economics. The company was started in 2005 as a small-scale, part-time
project. They started working on it seriously in 2008 while all three still had
fulltime jobs. They hired a small team to work with them part-time, which
went well for a while, but was extremely challenging.
At the time, Nestle was looking for a Google-certified digital agency.
Bramerz was shortlisted because Sarfraz, one of its founders, was Google-
certified in advertising. Thereafter, Bramerz grew very quickly into a digital
marketing agency. By 2012, it was functioning as two agencies: Bramerz and
3scrowd. The need for this arose as Bramerz was competing with clients
such as Samsung, Huawei, Nestle and Pepsi. The agencies were kept
physically apart on separate floors of the building.
5.4.1 Business Model and Operations
In its early stages, Bramerz catered to all the digital needs of its
clients. Providing a full range of services on the digital spectrum sets it apart
from its competitors. It offers a wide variety of products and services that
include, but are not limited to, software production, publishing, digital
media and social media. Bramerz does not charge for its services, but instead
takes a fraction of the revenue. This is an innovative performance-based
model: Bramerz makes money if its clients do.
Bramerz is the only Google-certified agency for content monetization
in Pakistan and only one of forty such agencies in the world. It helps
companies go online, which is its key contribution to the Pakistani IT
ecosystem. It places advertisements in the content, using priority advertising
and ad networks optimally to maximize views. It is impossible to manually
manage the 80 million-page views that Bramerz handles and it has
developed a sophisticated model and software for this purpose. It also uses
direct advertising and other means it has on offer. For content monetization,
Bramerz boasts a no-cost solution. It uses a revenue-sharing model with
clients: there are no upfront costs and the revenue generated is divided as
11
This case study is based on the authors interview with Badar Khushnood, entrepreneur-in-
residence at Bramerz.
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stated in the contract. For e-commerce platforms, it uses a revenue-sharing
model that specifies a percentage in the budget for digital marketing.
Bramerz was recently taken on board by Radio Pakistan to bring 50
years of its archives online. Its customers in terms of advertising include
many Fortune 500 companies such as Nestle, Pepsi and Samsung. Its
founders leverage their marketing and business background in conjunction
with technology to create products that cater to the needs of companies in a
rapidly moving world. Bramerz offers its clients four unique products:
Publishrr, Fishry, Olaround and Anytickets. Publishrr was launched to help
newspapers and news channels go online. The Nation and Nawa-e-Waqt
were the first to use this service, which was later productized. Over time, the
team has acquired companies such as the Daily Times, Qudrat, Dunya News
and Samaa TV.
Publishrr is its flagship product. Fishry is an e-commerce platform
through which the company manages all the needs of a business from
website development to mobile applications. Dominos was its first major
client and now it has more than 50 local brands on its portfolio. Fishry helps
brick-and-mortar stores go online and reach a wider market. Olaround is a
loyalty and discount application launched in 2012, long before 3G access in
the country. The fact that powerful smartphones and 3G were not available
then created issues regarding growth and the product was shelved.
Anytickets was started in October 2015 as its newest venture. This is a
cinema ticketing site that currently caters to the Cinestar cinema in
Township, Lahore.
The Pakistan Super League, which had its first tournament in 2016,
was completely digitalized by Bramerz, including the website, live scoring,
live streaming, a fantasy league, a mobile app and merchandise sale via e-
commerce platforms. Bramerz used cutting-edge technology to make sure
the website did not crash with the huge traffic online. This venture helped
generate good leads and companies now want to purchase the fantasy
league app while Geo TV wants to buy the mobile app.
Even with a very low budget, Bramerz accepts such contracts to
create leads. Its products are created with the aim of just covering costs. The
strategy is to make money from successive leads. Now that sports can be
productized, Bramerz can sell to any cricket club as the requisite backend is
ready. This is the vision the company wants to scale up.
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5.4.2 Financing
The founders pooled in the seed investment of Rs1.8 million.
Drawing only salaries, they plough back all profits into the business. Their
capital is currently estimated at around Rs60 million to 70 million. Bramerz
has thus seen excellent growth and is now looking at international venture
capital funds for a path to quicker growth.
5.4.3 Constraints and Challenges
In terms of human resources, 70 percent of Bramerz employees have
a background in business and the rest in computer science. Given the dearth
of talent the company needs, it selects fresh, energetic graduates and trains
them. The downside is that many young recruits tend to change jobs quickly,
often leaving within a year or two. As trained employees, they are offered
higher salaries at bigger companies, which Bramerz finds hard to match.
However, in more than half a dozen cases, old employees returned because
they had found the work environment at Bramerz very attractive. This is one
way Bramerz feels it can retain employees, even on lower salaries. It also
uses its profit-sharing model with top employees.
Bramerz states that one reason for its success is its stringent legal
contracts, which are necessary in Pakistan. Clients tend to negotiate the price
down and then expect to widen the scope of services later. Therefore, the
company makes sure every detail of its responsibilities to the client is clearly
written down for future reference. Another reason is the comprehensive list
of services provided in-house, which means that customers need not contact
different agencies for distinct digital requirements. As the only Google-
certified agency for monetizing content in Pakistan and one of forty such
certified agencies in the world, Bramerz has a special niche in the industry
and a competitive edge over its rivals.
An interesting constraint it identified was that no bank was willing
to give the company a special corporate lease rate for laptops. They would
provide such rates for cars, but not laptops, which are essential to the IT
industry. Moreover, getting credit cards for people working in the industry
was a problem due to certain regulations. Sending payments abroad was
identified as a concern, along with complex regulations and the high direct
and indirect taxes on the industry. Such companies in the digital economy
work on a low margin and high volumes to generate profits, which means
their revenue numbers are extremely large and their profits relatively small.
The recent turnover tax (8 percent), which is on revenue and not profits, will
make it impossible for such companies to survive.
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6 Incubation Centers and Co-Working Spaces
A major contribution to the wave of startups since 2012 has been the
emergence of a large number of incubation centers in the country. There are
over 30 incubators (mostly IT-based) currently operating in Pakistan and
about half a dozen are very active. They provide support services such as
mentorship, stipends, office space, uninterrupted power supply, broadband
Internet, training and development, funding opportunities and legal advice.
Most new technology entrepreneurs are young: many have only an
undergraduate education, if that, and very limited financial resources.
However, they are bright and have the energy and hunger it takes to succeed.
6.1 Services Provided
The selection process for a place at an incubator is very competitive
and plays an important role. At this stage, the idea is vetted by experienced
professionals and the capability of the team behind the startup most
incubators insist on there being a minimum of three partners is assessed.
The services the incubator provides to the startups that are selected help ease
many of the constraints they face as well as providing the support they need
to get through the initial stages of the process, including a collegial
environment where they can refine and test the practicality of their ideas.
The main services provided are outlined below:
Mentorship. Incubators/accelerators have mentors who guide and
advise startups on various matters. Mentors are generally successful
entrepreneurs or industry experts selected from across industries so that
they have a broad spectrum of knowledge and experience from which the
teams can benefit. Mentors also provide the inspiration necessary to keep
young entrepreneurs motivated.
Stipends. Startups that are incubated are either at the idea or early
development stage and so their product is not generating any revenue. Most
young entrepreneurs are straight out of university or college and have no
savings to meet even their limited personal expenses. Therefore, a number
of incubators/accelerators provide a meagre stipend, mostly per person, to
cover basic costs. A few incubators also require a share in equity in return
for providing stipends to the founders.
Office space. Rent is a major cost that acts as a barrier to entry for
startups. Most incubators provide office space within their buildings to the
selected startups. This is almost always free, with a few exceptions. Founders
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are provided a working area, supported by other amenities such as
conference rooms, printing facilities, cafeterias and common areas.
Uninterrupted power supply. Pakistan has faced critical energy
shortages in the last few years, with power cuts becoming the norm.
Although this is a major constraint to industries in the manufacturing sector,
which rely heavily on energy supplies, it also hinders growth in the digital
economy. Using generators or UPS units can be very expensive. Incubators
and accelerators generally provide uninterrupted power supply to startups
by installing generators and bearing the full cost of power.
Broadband Internet. Internet access is the core of the digital
economy around which these startups grow. Incubators/accelerators,
therefore, make sure that high-speed broadband is available to startups.
Training and development. Founders of startups are given technical
know-how of entrepreneurship at the incubation centers. They are taught
about product development, business development, financial planning,
pitching, marketing and corporate communication. Coupled with
mentorship, this provides the perfect environment for young entrepreneurs
to learn and evolve. Some incubators go to the extent of providing grooming
and language classes.
Funding opportunities. One of the most sought-after dimensions of
an incubator is the networking it can provide. This gives entrepreneurs the
opportunity to grow individually, receive feedback on their product and
find angel investors who are willing to put money into the business.
Accelerators focus on funding because the startup is mature enough to
absorb investment and has figures for revenue and customers, which are
then used in the pitch to attract investors.
Legal advice. Legal advice is very costly and startups necessarily
require legal protection in terms of intellectual property rights or patents. In
addition, getting a business registered can be time-consuming as well as
costly. Unambiguous, contractually binding arrangements between partners
are essential for the long-term success of a new business. Incubators offer
these services free or at minimal cost and the quality of the legal advice is far
superior to what they would get even if they were able to pay for it.
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6.2 Active Incubators and Accelerators
As mentioned above, there are about half a dozen very active
incubators and accelerators, three of which we discuss below. These include
the best known ones in the sense that they were involved in the development
of many of the rising stars discussed in this paper. The aim is to give a feel
of how incubators or accelerators work as well as how they contribute to the
success of a startup.
The three selected cases are Plan 9, the LUMS Center of
Entrepreneurship (LCE) and Nest I/O. These represent a range of possible
models and sponsors for such activity (Figure 5). All three select their
startups through a rigorous process whereby successful entrepreneurs and
industry gurus scrutinize the best ideas of a large pool of business ideas
presented. Once selected, the startup is inducted for a period of four to six
months. Each incubator/accelerator has two or three cycles a year.
Figure 5: Most active incubators and accelerators
6.2.1 Plan9 and PlanX
Plan9 is one of the early entrants, providing a facility for budding
entrepreneurs and a platform for young startups to test their business ideas,
pitch them to industry leaders and gain initial recognition. Plan9 is an
initiative of the Punjab government under the Punjab Information
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Technology Board (PITB). It started operations in 2012 under the leadership
of Dr Umar Saif, who is currently chairman of the PITB and vice-chancellor
of Information Technology University (ITU). In the last four years, Plan9 has
incubated more than 118 startups, helping them to shape their business
models and to work efficiently in the environment on their own. Plan9
provides a startup with six months of incubation, where each founder is also
given a stipend of Rs20,000 per month for up to five members in a team. It is
a world-class facility based in Arfa Tower, Lahore.
The PITB also runs another operation simultaneously by the name
of PlanX (an acceleration center), which provides acceleration services to
startups that have shown some traction in business and started commercial
activity. PlanX inducts startups once they have begun making sales and
serving early customers. It guides these startups in efficient business
techniques, establishing contacts in the industry, learning best practices to
achieve growth and helping them find suitable employees, partners and
investors
6.2.2 LUMS Center of Entrepreneurship
The LCE was formed in 2014 by LUMS to support young
entrepreneurs. It does not limit the induction to LUMS students. Rather, it
invites people from all across Pakistan. Khurram Zafar, the executive
director, is the inspiration behind the center and was one of the founding
board members of Plan9. He has extensive international experience, having
co-founded two software product startups in Silicon Valley and been part of
the founding team of two global IT consulting firms.
LCE offers multiple plans for startups and they can opt for monthly
stipends of approximately Rs25,000 per person on the team in return for 7.5
percent equity in the firm. Startups can also be incubated under a non-
resident’ acceleration program in which, for 2.5 percent equity, they are
given mentoring sessions, talks, some marketing/PR support and pitching
rights at the startup summit. Graduation from the LCE is in the form of an
investors summit that gathers businesspersons, industry leaders and local
and international investors. Startups pitch their business ideas to these
people for investment. This platform has proved to be very successful and
companies have raised significant investment via this method.
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6.2.3 NEST I/O (P@SHA’s Tech Incubator)
The latest addition to the list of incubators in Pakistan is NEST I/O,
launched in 2015 in Karachi. This is an initiative by the Pakistan Software
Houses Association (P@SHA) and has been funded and supported by
Google for Entrepreneurs, Samsung and the US Consulate General in
Karachi. It is managed by Jehan Ara, the current president of P@SHA. She
understands the entrepreneurial landscape and future potential of IT in
Pakistan, having served as president of P@SHA for more than eight years.
NEST I/O has a similar strategy to Plan9 and LCE, whereby it
incubates startups for four months and provides initial advice and services.
The program comprises four different phases: power building (nest),
gaining momentum (ramp up), revving up (propel) and gearing up and
taking off (fly). These modules help startups in various areas, such as
defining their mission and vision, team building and HR skills, raising
funds, managing cash flows and law-related issues.
6.3 Co-Working Spaces
Incubators and accelerators have proven very successful in the last
few years. The only drawback of such programs is that startups can become
too dependent on mentors, professional advice and excellent facilities: this
can become an obstacle once they have graduated from an incubation
program. However, another innovation, co-working spaces, can make this
transition easier by providing the kind of facilities and work environment a
startup has got used to at the incubator, but for a reasonable fee.
Most such companies start either at home or an incubation center.
Once they outgrow the space at home or graduate from the incubation
center, it is a challenge to move into an independent office space. Money is
usually tight and investing in any assets that will not help them fuel business
growth is a low priority. Thus, renting a new office, utility bills, back-up
energy arrangements and printing and Internet facilities can become a
serious problem for startup founders.
To address this problem, co-working spaces have opened up across
the country from Peshawar to Karachi. These venues provide founders and
their employees with office space, Internet access, meeting rooms, gaming
zones for recreation and relaxation pods. Some of the best known co-
working spaces are DotZero (Karachi), The Hive (Islamabad) and
OfficeSpace (Lahore). On average, the charges range from Rs8,000 to
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Rs12,000 per month per seat. This amount falls as the number of people
within the startup increases.
These spaces are a good opportunity for startup teams to save on the
fixed cost of assets. They also help teams network with the community by
arranging meetings and other programs. Such spaces are very popular
among the freelancer community. Power outages and infrastructure
requirements pose a challenge to young freelancers and these spaces play an
integral role in providing a good platform at relatively affordable prices.
A recent entrant in this area is Tech Hub Connect, a PITB initiative
that aims to promote entrepreneurship and freelancing in Pakistan by
providing a world-class facility for the community. The center is located in
Arfa Tower, Lahore, next to Plan9 and PlanX, and is a good opportunity for
young startup graduates and freelancers to join free of cost. Its location gives
freelancers exposure to IT companies, ITU, Plan9, PlanX and other industry-
related offices.
The LCE plans to arrange for the services of accountants and
lawyers as well as professionals in marketing and other business-related
areas. Startups will be charged for these on a time/usage basis. The center
will charge startups on a monthly basis. To encourage them to move out as
they get bigger, the per-head cost will increase as the number of team
members increases.
7 Emerging Financial Landscape
Financing for small and medium enterprises (SMEs), particularly
new businesses, has always been problematic because traditional lenders
such as banks require documentation and collateral, which both SMEs and
new startups lack. However, the ability of digital businesses in Pakistan to
raise risk capital has been a revelation and is a key reason for the rapid
growth of these businesses and the excitement surrounding digital startups.
There have been numerous attempts many supported by
international development institutions to establish venture capital funds
in the country, but none have succeeded so far. The two main reasons for
this are (i) the inability of investors to control expenditures and monitor the
performance of the firms they have invested in and (ii) the lack of an exit
strategy in the face of an underdeveloped capital market.
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These two constraints do not seem to be binding in the case of digital
businesses. Direct control and monitoring of a company is not necessary
because online traffic and transactions are easily observed by investors and
there are established models for estimating the capital valuation of a
company at any time. Since global players are always interested in
expanding their operations in new markets, and acquiring successful firms
in new markets is the most cost-effective way of doing so, venture capitalists
have an effective exit strategy. As a result, both international venture capital
funds and local investors have begun investing in digital businesses in
Pakistan, giving birth to a venture capital industry in the country (Table 1).
Table 1: Equity investments in Pakistani companies, 2015 and 2016
Company
Product
Amount
raised
Investors
Daraz
Shopping portal
$56 million
Asia Pacific Internet Group
CDC Group
Zameen
Property portal
$29 million
Undisclosed
Rozee
Job portal
$6.5 million
Vostok Nafta
Piton Capital Lead
Investment
Vivid
Technologies
Voice
technology
$350,000
(seed
investment)
Sunbridge Ventures
Rosemont Group
Telefonica
Conrad Labs
Finja
Fintech
$1 million
Vostok Emerging Finance
Beauty Hooked
Home beauty
services
$280,000
Fatima Ventures
Travly
Transport
$200,000
Cres Ventures
Faisal Sherjan
Sources: Dodhy (2016a, 2016b); Husain (2015b); ProPakistani (2015, 2016); TechJuice
(2015), Zameen.com raises $20 million,” (2016).
8 Sources of Financing
A key milestone for startups on graduating out of the incubation
cycle is to obtain funds for product development, operations, marketing,
human resources and other requirements for their business model to
succeed. We have seen financing evolve from traditional to venture
financing in Pakistan. Traditionally, new businesses source investment from
family and friends and, subsequently, by ploughing back their earnings. In
this new era of financing, startups are not valued by asset size or existing
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operations, but by their future growth trajectories. Such investments may be
seen as risky for not having any physical asset base, but they are preferred
by international investors as there is less country risk since all operations run
on cloud services.
According to Monis Rahman, the CEO of Rozee, there is a growing
trend of international investors from the Far East and Europe: they see huge
potential in the economy in the years to come (personal interview). There
were a number of international investments in 2015, ranging from as low as
$100,000 to $20 million for Zameen. Pakistan provides these investors with
a very good option for returns based on the size of the country and market
growth potential. There are several different players in this field and are
discussed briefly below.
8.1 International Investors
Globally, investors look to invest in emerging markets, which yield
a greater rate of return than investing in developed countries. International
investors see Pakistan as a potential emerging market and are very hopeful
for the future. There were multiple investments in 2015/16, which were
clearly made with the expectation of future growth in the country. Frontier
Digital Ventures, a Malaysia-based venture capital firm focusing on online
classified businesses in emerging markets, has invested $3.5 million in
PakWheels. As stated by Shaun Di Gregorio, founder and CEO of Frontier
Digital Ventures, We love frontier and emerging markets and have a wealth
of expertise and a proven track record of extracting value in the
opportunities these markets present” (TechJuice, 2014).
8.2 Local Investors
As more and more international investors eye Pakistan as an
emerging economy and assess its potential for growth, the local community
is also picking up cues and trying their hand at investing in these startups.
There are several kinds of investors operating locally.
8.2.1 Venture Capital Companies
Venture capital is a relatively new phenomenon in Pakistan: only a
handful of companies have explored this space and provide opportunities
to young startups. The founders of these investment firms personally scout
for new startups by attending entrepreneurship events such as business plan
competitions and startup summits and visiting incubation centers.
Naved Hamid and Faizan Khalid
302
The pioneer players are CresVentures in Lahore and DotZero
Ventures in Karachi, which have already made some investments in local
startups (see Box 1). DotZero was set up as a seed and angel investment fund
in 2015, having started in August 2013 as a nonprofit foundation for IT to
help local entrepreneurs and foster entrepreneurship in Pakistan. It started
by providing office space, mentorship and networking opportunities to
startups. Seeing greater opportunities, it decided to relaunch itself as a seed
and angel investment fund. The company invests in early-stage startup
companies that demonstrate a mass appeal for the product or idea. It has
invested in eight startups, which include Popinjay, Dealtoday, Sukoon,
PerkUp and others. DotZero employs a pool of advisors and individual
investors who evaluate ideas and invest as a fund or individually as suited
to all stakeholders.
For both companies, on average, the ticket size of their investments
ranges from $100,000 to $200,000 and disbursements are tied to quarterly
targets. Startups are also provided mentorship, advice and direction by these
venture capital firms as their founders have significant experience in the
industry. They also understand venture capital, having spent a portion of
their lives in the US or worked with companies based there, which has given
them exposure to international venture capital firms.
Box 1: CresVentures: A case study
The founder and CEO of CresVentures, Humayun Mazhar, in
collaboration with his friend Aizaz, started a company by the name of
CresSoft in the 1990s: the first company in Pakistan to exclusively focus
on IT export services.12 At the time, he was managing his family
business and when his jute production plant closed down, he decided to
focus on developing his IT business.
Unfortunately, CresSoft suffered two major setbacks in 2001. The
IT bubble in the US burst in March 2001 and, as a result, many clients
lost businesses. IT spending by other companies was severely curtailed.
While CresSoft was struggling with this, 9/11 occurred and US blue-chip
companies became reluctant to do business with Pakistani companies.
CresSoft’s clients wanted risk-averse strategies put in place and Mazhar
had to open offices in Dubai so clients would feel safer. Some clients
stayed with CresSoft, but many left, affecting 70 percent of its business
dealings. Finally, in 2004, Mazhar decided to shut down CresSoft.
12
This case study is based on the authors’ interview with Humayun Mazhar, the CEO of
CresVentures.
Entrepreneurship and Innovation in the Digital Economy
303
In 2013, after assessing the progress and potential of new startup
companies in Pakistan, he decided to set up a venture capital firm because
at that time, most people who turned to banks for loans were unable to
get them due to the stringent evaluation criteria. In preparation, Mazhar
took a course on venture capital in Berkeley in which he learned about
angel funds and super angel investors. He decided to start an angel fund
in Pakistan. An angel fund requires an experienced board of advisors with
IT and business backgrounds to help choose appropriate candidates who
want to start their own business. Three of Mazhar’s former CresSoft
employees came on board, helping him undertake investments in
healthcare, innovative agriculture and e-commerce.
CresVentures focuses on local market monetization because
parallel markets operate in India and a learning model is already
available against which to compare ideas. In its assessment, it looks at
the skills and abilities of the owners more than the idea itself. A soft
launch of CresVentures took place in October 2015, with the provision
of investment to potential startup companies in the portfolio such as
PerkUp, Sukoon and Travly. PerkUp is a Karachi-based setup that offers
customer loyalty and engagement services to consumers and businesses
by helping them obtain loyalty rewards from various businesses. This
encourages customers to revisit stores, reenergizes lost customers and
involves them on birthdays and anniversaries (F. Rizwan, 2016). In this
way, merchants are able to segment customers into groups and send
targeted offers and track redemptions.
Sukoon.com.pk is a recent Karachi-based online home repair
venture. CresVentures invested $200,000 in Sukoon, followed by
investment by TiE’s Islamabad chapter and DotZero Ventures. This
investment is unique in that the top angel funds in Lahore, Islamabad and
Karachi are sharing risks and cooperating in the development of a tech
startup. Travly was started in Lahore in 2013 after being incubated at
Plan9. It joined the PlanX accelerator and collaborated with the Lahore
Transport Company to digitize bus routes in Lahore. It helps customers
plan bus trips or book rickshaws online; it even provides logistical services.
Companies in the portfolio are chosen based on their growth
potential. Once selected, they are provided investment, mentorship and
domain expertise. Evaluating a company is an art and can be a challenge
to assess if its growth targets are being met. Once the company achieves
its set targets, CresVentures and its co-investors hunt for a chief
investment officer (who has the experience needed and is based in
Pakistan) to monitor the next round of pooled investment.
Naved Hamid and Faizan Khalid
304
In some cases, among young entrepreneurs who have the
potential to grow, trust issues may arise in terms of the shareholding
agreement. As CresVentures demands 30 percent equity upfront before
investing in an idea, many entrepreneurs are reluctant to approach the
company for fear of a takeover in the future (it also has control over
accounting and co-investment by other investors and funds). In 2014/15,
approximately Rs300400 million in investment was raised through
startups such as Sukoon and PerkUp, although meeting its estimate for
the current year will be hard. While the number of companies is
increasing, finding startups with good-quality founders and ideas to
incubate has become more difficult.
8.2.2 IT Companies
With the rise in IT in Pakistan over the last 30 years, companies such
as Systems, Netsol and Confiz Solutions have expanded by providing B2B
services, primarily to international clients. They are also looking to
participate in the digital economy and are exploring ideas internally as well
as promising startups to support.
Successful digital businesses such as Zameen and Rozee are also
looking to expand through promising startups. Their owners have been in
the industry long enough to understand this new shift in the digital
economy. They actively participate in national business plan competitions
held by universities and incubation centers and when they see a promising
startup, may offer funding. These companies have a big local presence and
are able to provide startups with investment as well as office space and
amenities. Startups can also seek technical support from such companies as
they have in-house talent in software engineering and related areas.
8.2.3 Traditional Business Families
The latest addition to local investors includes corporations or
traditional business families, although many of them find it hard to evaluate
startups, given the concept of investing in a new business that has no
physical assets. As Khurram Zafar, the director of LCE, says, Our local
businessmen and local industrial groups are sitting on a goldmine with a lot
of liquid cash and they are just waiting for a success story, which will
motivate them to invest” (personal interview). However, he also noted that
these businesses found it hard to understand how companies in the digital
economy functioned and thus needed to become familiar with investing
techniques in this context.
Entrepreneurship and Innovation in the Digital Economy
305
Currently, they see every investment as a joint venture with the
founders of the startup. They also expect the founders to invest a similar
amount if they are to be partners: the latter’s passion, hard work and ideas
are not enough to be accepted as a valuable asset. These investments are at
a nascent stage and traditional companies are still exploring this space. Some
local players that have made investments include the Fatima Group, SEFAM
and others. However, once more and more prominent business groups start
investing in startups, other business groups will also become interested.
9 Policy Issues
The active startup scene and rapid expansion of the digital economy
in Pakistan indicate that there are some positives in the country’s policy
environment. The most important of these may be its liberal foreign
investment policies. Pakistan allows 100 percent foreign ownership and there
are no restrictions on the repatriation of profits and capital. Another important
positive is the role played by the Punjab government through the PITB (and
ITU) in terms of providing a voice to the emerging industry on policy issues,
establishing, as already discussed, one of the first and most active incubators
(Plan9) in the country and facilitating the entry of major international
companies into Pakistan.
13
The importance of providing a voice on policy
issues can be seen from a recent example. In 2015, all the provinces (including
Punjab) levied a 19.5 percent tax on Internet services, but lobbying by the PITB
and others succeeded in having the tax withdrawn in Punjab. Today, it is the
only province in the country that does not tax Internet services.
However, there are still a number of concerns with regard to
government policies such as the regulatory environment and, more
importantly, taxation, which can hamper the growth of the digital economy.
These arise in part because, as noted by the former IBM vice-president and
investor in Wifigen, John Russell Patrick, “Pakistan's business laws are still
structured around an industrial economy with tangible assets. By contrast,
technology startups are based on ideas and knowledge for which there is no
regulatory framework” (Nazar, 2016).
This is also true of policies and laws with regard to taxation. In
countries such as India, the IT industry was able to grow rapidly in the 1990s
because it escaped the pervasive controls and regulations that had stifled the
growth of traditional industries. Unfortunately, the ignorance of the
government is no longer an advantage. In Pakistan, in the last few years, the
13
For example, at the time of the launch of Uber in Lahore in March 2016, the Uber team met the
Punjab chief minister, who assured them of the government’s support and initiated discussions on
establishing a partnership to promote the use of technology in facilitating the transport sector.
Naved Hamid and Faizan Khalid
306
government has focused on increasing tax revenues. While this is clearly
necessary, given the weak tax administration machinery and strong
pushback from the present government’s traditional constituencies, it has
found it very difficult to increase the collection of direct taxes. Therefore, it
has attempted to increase tax revenues by imposing withholding taxes, in
lieu of income tax, on turnover, which is borne disproportionately by the
formal, documented sectors and businesses in the economy.
14
The implications of such a tax policy for established businesses in the
formal sector are bad enough; for new businesses in the digital economy,
they can be disastrous. There is a very high level of documentation in this
sector, as information is available on every aspect of a business from the
number of visitors to the company’s portal to every transaction that takes
place online. The approach of digital businesses in the early stages is very
different from businesses in traditional sectors as their aim is not profits, but
growth and increase in capital valuation. Amazon, for example, was a
multibillion dollar company before it started to make a profit. Uber, which
has a capital valuation of over $60 billion and had over $2 billion in gross
revenues in the second quarter of 2015, is still making losses on its
worldwide operations (Solomon, 2016).
To illustrate the absurdity of the tax regime facing digital companies
in Pakistan, we can look at a hypothetical situation. If Uber were a Pakistani
company, it would have had to pay an 8 percent turnover tax on $8 billion
in gross revenues, i.e., $640 million despite a loss of over a billion dollars. In
addition, Uber would have had to withhold income and sales tax (15 percent
and 16 percent, respectively) from over 5 billion dollars it paid that year to
its driver contractors. In other words, if Uber were a Pakistani company, it
would have closed down a long ago or moved to Dubai. The latter is what a
number of successful digital businesses in Pakistan are thinking of doing.
Another issue is the taxation of the Internet, which is the backbone
of the digital economy and is heavily taxed in Pakistan. Both businesses and
individual consumers pay a 10 percent withholding income tax and a 19.5
percent provincial sales tax (except in Punjab) on Internet services, including
mobile Internet access. In terms of the cost of doing business, this represents
a 30 percent surcharge on the basic price charged by the service provider. In
addition, it reduces the demand for Internet services and the profitability of
the service providers and thus adversely affects the quality of, and
investment in, critical Internet infrastructure in the country.
14
In theory, individuals and businesses that file income tax returns can get a refund against excess
withholding tax payments, but in practice it is virtually impossible to get an income tax refund in
Pakistan.
Entrepreneurship and Innovation in the Digital Economy
307
10 Conclusion
This paper has shown that the digital economy has huge potential
for growth in Pakistan. The direct benefits of this are large: not only will it
boost economic growth in the country, but it will also provide good jobs to
a substantial portion of the young people coming out of Pakistan’s rapidly
expanding higher education system. This is important not only from an
economic point of view, but also for political reasons as a large number of
educated unemployed persons could be a problem for the security and
stability of the country.
The growth of the digital economy would also give rise to a new
generation of entrepreneurs and boost investment in the economy, both of
which are in short supply at the moment. Moreover, its indirect benefits may
be even larger, as it could play an important role in increasing documentation
of the economy and improving the functioning of key markets. For example,
the labor market in Pakistan is highly fragmented; information on the
availability of jobs and salaries is an important reason for this fragmentation.
Employment portals such as Rozee make information on job openings and
salaries in all skills, industries and parts of the country available to anyone
interested. This should result in enhanced labor mobility, improved job-to-
skill matching and reduced downtime for new entrants as well as those
between jobs. At the moment, these portals cater to white-collar jobs, but it is
only a matter of time before blue-collar jobs are also covered.
Another market that would benefit greatly from the development of
the digital economy is agriculture where, for most products, there is a large
wedge between the prices received by farmers and those paid by consumers
in cities. By bringing buyers and sellers together, marketplace websites have
the potential to greatly reduce this wedge, thus benefiting both farmers and
consumers and increasing the production of high-value crops. Marketplace
websites also expand the reach of SMEs and help promote their sales and,
therefore, growth.
However, to realize the full potential of the digital economy, the
government must recognize its importance as well as how it is different from
traditional industries and introduce appropriate changes in the relevant tax
and regulatory policies. If such policies are put in place, there is every reason
to expect that, in five years’ time, the digital economy will be in excess of $2
billion and its high growth rate could transform Pakistan’s economy.
Together with CPEC, the digital economy could be the new driver of
Pakistan’s economic growth.
Naved Hamid and Faizan Khalid
308
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312
Appendix
People interviewed by the authors
Name
Position
Company or
organization
Date of
interview
Nabeel A. Qadeer
Director
Plan9
19 Jan 2016
Monis Rahman
CEO
Rozee
2 Feb 2016
Imran Ali Khan
Co-CEO
Zameen
24 Feb 2016
Badar Khushnood
Entrepreneur in
residence
Bramerz
26 Feb 2016
Arslan Nazir
CEO
Shophive
28 Apr 2016
Humayun Mazhar
CEO
CresVentures
3 May 2016
Aezaz Hussain
CEO
Systems Limited
5 May 2016
Khizra Munir
CEO
CO Pakistan
3 May 2016
Faisal Kapadia
CEO
Mindmap
Communications
1 Jun 2016
Farzal Dojki
CEO
DotZero Ventures
2 Jun 2016
Fawaad Saleem
CEO
Digital Tribe and Startup
Grind
2 Jun 2016
Jehan Ara
President
P@SHA and NEST I/IO
3 Jun 2016
Raza Saeed
CEO
PakWheels
10 Jun 2016
Khurram Zafar
Executive director
LUMS Center of
Entrepreneurship
29 Aug 2016
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... The concept of digital entrepreneurship emerged in the start of 21st century, authors like (Hull, Hung & Hair, 2006;Davidson & Vaast, 2010;Yaghoubi, Salehi, Eftekharian & Samipourgiri, 2012;Digital Entrepreneurship Monitor, 2014;Growth European Union, 2016;Hamid & Khalid, 2016;Leong, Pan & Liu, 2016& Anckar, 2016 & Collier, 2016& Anckar, 2016 and support the theory i.e. Actor Network Theory (Latour, 2005). ...
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To cope with the challenges of the digital era, entrepreneurs hunted a novel version of entrepreneurship i.e. digital entrepreneurship. Digital entrepreneurship is the process of hunting opportunities by using the digital technologies and information communication technologies (ICTs) for launching startups and revolutionizing existing corporations. Aim of the current research is to find out the moderating role of social capital in the relationship of digital entrepreneurship with entrepreneurs’ innovative predisposition. Researcher collected primary data (cross-sectional) from the digital entrepreneurs of Pakistan by distributing well-structured developed and adapted questionnaire. Current study applied various descriptive and inferential tests to analyze the phenomenon. Results elaborated that the instrument used for data collection is reliable, valid and the data collected through the scale is normal. Results also revealed that there is significant relationship among digital entrepreneurship, entrepreneurs’ innovative predisposition and social capital. Furthermore, it is revealed that there is significant influence of digital entrepreneurship on entrepreneurs’ innovative predisposition. Analysis also identifies that social capital does act as enhancing moderator in between predictor and criterion variable. It is concluded from the findings of the study that digital entrepreneurship plays an important role in improving the innovative predisposition of entrepreneurs that are pivotal for the economic growth of the region as well as country. So, this study contributes in actor network theory by inclusion of social capital as moderator and analyzed its effect on relationship of digital entrepreneurship with entrepreneurs’ innovative predisposition to make decisions for the betterment of digital entrepreneurs and society.
... Whereas, on one hand, the assessed findings are supported by the earlier findings of Wu et al. (2016) in China, however, on the other hand, the findings of Sridhar (2018) for India and China are in contradiction with current results. According to Hamid and Khalid (2016), there is a tremendous upsurge in Pakistan's urban sprawl and this urban sprawl is more expedited recently, because approximately half of the country's population are residing in cities. The main reasons of population shift toward cities is to increase and grab the chances of opportunities including jobs, education, and health facilities, i.e., to improve the standard of life. ...
Article
In modern era, where urbanization is at its peak, has resulted a significant economic-gap among rural and urban residents across developing nations, and had a considerable impact on CO 2 emission. The current study investigated that how urbanization affects emission of CO 2 in Pakistan. To achieve the expected long-and short run goals, we utilized the better suited approach of Auto-regressive Distributed Lag (ARDL) approach. Similarly, causality investigation was accomplished through vector error correction model (VECM). The current outcomes from unit root tests verified the stationarity of the selected variables. Whereas, ARDL outcomes endorsed the relationship among the selected variables of the model. We observed that emission of CO 2 goes-up with increase in urbanization. Similarly, VECM endorsed the existence of SR unidirectional causal connection towards the emission of CO 2 from urbanization. In short-run, however, economic growth is one-way, Granger produces CO 2 emissions. As a result, the effect of short-run results on CO 2 emissions coming from economic growth and urbanization is supported and validated by these causalities. In a nutshell, government action is critical in developing energy-efficient and environmentally sustainable ways to reduce CO 2 emissions and improve the environment.
... In contrast, current outcomes are not compatible with the outcomes of Fan and Zhou (2019). Pakistan has experienced the fast expansion of urbanization after its existence, and this growing rate of urbanization has tremendously increased recently (Hamid and Khalid 2016). Nearly half of the Pakistan's population is now urban dwellers. ...
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The growing urbanization has created a substantial economic imbalance between the urban and rural households in the world’s emerging economies and put a significant effect on carbon dioxide emissions. Simultaneously, many researchers have grown concerned by the significant consequences of urbanization on carbon emissions. In current research, we make an effort in Pakistan to investigate how urbanization affects the carbon emissions. In order to attain the intended goals of long run and short run investigation, we employed the most appropriate method of auto-regressive distributed lag model for time series data-set, while the vector error correction model, on the other hand, was employed to investigate causation. The estimated findings of the auto-regressive distributed lag model supported the association amongst the model’s selected variables. In long and short run, the estimated findings approved that as the level of urbanization rises, so does the carbon emissions. Furthermore, the estimated results of the vector error correction model acknowledged the validity of short run unidirectional causal relationship from urbanization towards carbon emissions and from carbon emission towards energy consumption, as well as in short run, where economic growth one-way Granger generates the carbon emission. To summarize, based on the current findings, that reflects the significance of the underlined factors. The study recommends that government should prioritize the development of energy efficient and environment friendly strategies with respect to fast growing urbanization to control the carbon emission.
... The methodology employed has been structured as research and documentation reviews of reports, journal articles, and statistical data to provide an overview of the trends in entrepreneurship in the digital platform and on the demand for ICT skills (Hamid & Khalid, 2016). The data collection methods included survey data conducted in Bangalore during January-September 2019 through online questionnaires, focus groups, and interviews with stakeholders to test the survey and literature review findings on women's Entrepreneurship, career prospects in managerial positions, female entrepreneurship and digital skills. ...
... 1. Political and regulatory environment (9 indicators) 2. Business and innovation environment (9 indicators) B. Readiness subindex (3 pillars) 3. Infrastructure (4 indicators) 4. Affordability (3 indicators) 5. Skills (4 indicators) C. Usage subindex (3 pillars) 6. ...
... In addition, to explain more about the literature review, the disruption effects of the digital transformation overwhelm many sectors including; retail (Escobar, 2016), banking (Dutta, 2015), publishing (Klamet, 2017), payment (Goparaju, 2017), tourism (Sovani & Jayawardena, 2017), agriculture (Burkaltseva et al., 2017), entrepreneurship (Hamid & Khalid, 2016) and women entrepreneurship (Balogh, 2016;Freedman, 2016). The disruption effect of digital economy developmen which is quite encouraging, yet it came along with multiple risks. ...
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While the study of the regional economy and its factors has been well-researched, relatively less is known on the issues for the digital economy sectors affecting the regional economy. Therefore, the aims of this paper are: to investigate the regional economic impact caused by digital economy sectors; to analyze the multiplier effect of these sectors on the output, income, and employment; and to calculate the economic impact of additional investment in the digital economy sectors. The study focuses on the region of East Java Province, Indonesia. The method used in this study is the input-output analysis (13 x 13 aggregation), which generates transaction of goods and services at a certain time. This study uses data from the Central Bureau of Statistics, Input-Output Table of East Java Province year 2015, which includes 110 economic sectors, which are then grouped into digital related and non-digital related sectors. The result indicates that digital economy sectors have both backward and forward linkages to other sectors in the region. Further finding shows that digital related manufacturing sector has the highest multiplier effect on the output, income, and employment. While investment injection on the digital economy sectors, based on the analysis, will make better disruption on East Java economy. The government of the region should put an emphasis to attract more investment in the digital economy sectors.
... It is a new economy represented by the inclusion of technology and digital information [3]. The digital economy is a dominant force in today's economy, and is sometimes called the new economy or the Internet economy [4]. There is an opportunity for a country to transform the economy and to contribute to the development of the digital economy [5]. ...
Digital planet: Readying for the rise of the e-consumer -a report on the state and trajectory of global digital evolution
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Female-led Pakistani startup Beauty Hooked raises $280,000 seed funding
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Finja, a fintech startup from Pakistan, raises $1 million in seed funding
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Global online employment report
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Markhor is the first Pakistani startup accepted into Y Combinator
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Pakistan jobs marketplace startup pockets $6.5 million funding
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This entrepreneur dropped out of high school, discovered engineering and built a $1 million startup
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Pakistan startup hopes for a global hit with xGear, brings 'quantified self' to your car
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