Najiullah Khattak
My first exposure to entrepreneurship and innovation came in 2006 when I started teaching as a visiting lecturer at the Institute of Management Studies, University of Peshawar. At the time, the term “startup” was virtually absent from Pakistan’s business vocabulary. Entrepreneurship was not a fashionable career choice, venture capital was unheard of, and incubation centres had yet to emerge.
I was assigned four courses: Agriculture Marketing, Export Marketing, New Product Development, and Managing Conflict at Workplaces. As a young lecturer standing before classrooms full of aspiring professionals, I quickly realised that conventional teaching would not be enough. My goal was to make learning practical and memorable.
Instead of relying solely on textbooks, I encouraged students to engage directly with the market. They conducted real export exercises, interacted with businesses, and developed new product concepts. The results were encouraging. One group successfully exported a footwear product to the UAE. Another designed an innovative toothbrush concept. Many others developed ideas that connected creativity with commercial opportunity.
Back then, innovation meant creating tangible products, solving practical problems, and integrating technology into physical goods. The emphasis was not merely on having an idea but on transforming that idea into something useful and marketable.
Twenty years later, I find myself mentoring startups at various incubation centres, including the Business Incubation Centre at the University of Peshawar and the National Incubation Centres. Along the way, I have gained experience in politics, governance, manufacturing, and industry. I have served as Advisor to the Chief Minister of Khyber Pakhtunkhwa, worked with donor-funded development programmes, served on the Board of Directors of the Khyber Pakhtunkhwa Economic Zones Development and Management Company (KPEZDMC), and developed Pakistan’s first alkaline ionised mineral water brand.
These experiences have given me a unique vantage point from which to observe Pakistan’s entrepreneurial ecosystem. While there is no shortage of talent, ambition, or creativity, there remains a troubling gap between innovation and industrial problem-solving.
The first twenty startup pitches I attended revealed a pattern that continues today. Many focused on perfume impressions, beauty products, or the rebranding of imported goods. Others involved assembling components sourced from abroad and packaging them for local markets. Some startups adapted existing mobile applications or software platforms with minor improvements.
There is nothing inherently wrong with these ventures. Entrepreneurship often begins by identifying market opportunities. However, what struck me was the relative absence of startups tackling the challenges faced by Pakistan’s industries, farms, hospitals, and municipalities.
Where were the startups building affordable automation systems for factories? Where were the innovators developing low-cost waste management technologies for industrial zones? Why were so few entrepreneurs designing machinery for agriculture, water conservation systems, or climate adaptation technologies? Why were our engineering graduates not building robots, industrial sensors, or advanced manufacturing solutions tailored to Pakistan’s needs?
The irony is that Pakistan has no shortage of problems waiting to be solved.
The country has one of the youngest populations in the world, with nearly two-thirds of its citizens under the age of 30. Every year, thousands of graduates enter the workforce from engineering, business, agriculture, and medical universities. Yet much of this talent remains disconnected from the productive sectors of the economy.
Meanwhile, Pakistan’s startup ecosystem has experienced both growth and setbacks. Venture capital investment surged during 2021 and 2022, attracting international attention and creating optimism about the country’s entrepreneurial future. However, much of this investment flowed into e-commerce, fintech, logistics, and digital services. While these sectors are important, they do little to address the structural challenges facing manufacturing, agriculture, energy, and environmental sustainability.
This matters because manufacturing contributes only around 12 to 13 per cent of Pakistan’s GDP, significantly lower than many successful emerging economies. Countries that transformed their economic fortunes did so not merely through apps and platforms but through innovation in production, engineering, and industrial technology.
South Korea invested heavily in research and industrial development. Germany built strong links between universities and manufacturers. China evolved from assembling imported products to designing and producing advanced technologies. In each case, academia, industry, and government worked together to create an ecosystem where ideas could be converted into products.
Pakistan has yet to establish such a connection at scale.
One of the biggest challenges is the disconnect between academia and industry. Universities produce graduates, while industries struggle to find solutions to operational problems. Researchers often work in isolation from the marketplace, while businesses rarely engage academic institutions in product development or applied research.
The result is predictable. Students graduate with theoretical knowledge but limited exposure to real industrial challenges. Businesses continue importing solutions that could potentially be developed locally. Startups gravitate towards low-entry barriers rather than tackling complex technical problems that require research, experimentation, and collaboration.
This is not a criticism of academia alone. Industry must also accept responsibility. Businesses frequently view research as an expense rather than an investment. Few allocate meaningful resources to research and development. Government incentives for innovation remain limited, and funding for applied research is often inadequate.
Yet the opportunities are immense.
Pakistan faces pressing challenges related to water scarcity, climate change, waste management, agricultural productivity, energy efficiency, healthcare delivery, and urbanisation. Each challenge represents an opportunity for entrepreneurs to create products and technologies that generate both profit and public value.
Imagine startups developing affordable irrigation technologies for small farmers, AI-driven tools for crop management, low-cost sensors for industrial efficiency, machinery designed specifically for local manufacturing needs, or innovative waste-to-energy solutions for rapidly growing cities. These are not distant possibilities. They are opportunities waiting for the right ecosystem to emerge.
The future of Pakistan’s startup ecosystem should not be measured solely by the amount of venture capital raised or the number of incubation centres established. It should be measured by the number of real-world problems solved, products manufactured locally, patents commercialised, and industries transformed.
Pakistan does not suffer from a shortage of ideas. It suffers from a shortage of bridges connecting ideas to implementation.
The next phase of our entrepreneurial journey must move beyond replication and rebranding. It must focus on research-driven innovation, product development, and industrial problem-solving. Universities must engage more deeply with industry. Businesses must invest in research and development. Policymakers must create incentives for technology commercialisation and applied innovation.
If we succeed, Pakistan’s startups will become more than businesses. They will become engines of economic transformation.
Until then, many startup dreams will continue to be born in incubators and pitch competitions, but their potential to reshape Pakistan’s economy will remain frustratingly stalled.
The writer is a Corporate and Development Communications Specialist
