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Acknowledgement On behalf of Sukkur Institute of Business Administration (Lead Partner Institute, Pakistan) thanks to all the university representatives across Pakistan for providing access to their students via email and other means for data collection and most especially to the students from participating in this study. We are thankful to Director Sukkur IBA, Professor Nisar Ahmed Siddiqui for his continuous support in conducting this survey across Pakistan. In particular, we acknowledge the administrative leadership of Dr. Phillip Sieger global Project Head for guiding us on our first involvement with this global project. We are also thankful to EY the international project partner and Sukkur IBA for funding GUESSS project in Pakistan. Dr. Altaf Hussain Samo Country Team Lead, Pakistan
[email protected] Asma Hussain Mahar
[email protected] To cite this report: Samo, A.H, and Mahar, A.H, (2016). GUESSS: Report for Pakistan (2016), Sukkur Institute of Business Administration, Sindh,
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Table of Contents Acknowledgement ........................................................................................................................................ 2 Executive summary ....................................................................................................................................... 6 1. Introduction ............................................................................................................................................. 7 2. Theoretical framework.............................................................................................................................. 8 3. Research Method ...................................................................................................................................... 8 4. Participants' characteristics ...................................................................................................................... 9 4.1 Age ...................................................................................................................................................... 9 4.2 Gender .............................................................................................................................................. 10 4.3 Nationality ......................................................................................................................................... 10 4.4 Levels of Studies................................................................................................................................ 11 4.5 Field of Studies .................................................................................................................................. 11 4.6 Summary ........................................................................................................................................... 12 5. Career Choice Intentions/ Entrepreneurial Intentions ........................................................................... 12 5.1 Career Path Right After Studies ........................................................................................................ 13 5.2 Career Path After 5 Years .................................................................................................................. 15 6. Drivers of Entrepreneurial Intentions ..................................................................................................... 17 6.1 University Context............................................................................................................................. 17 6.1.1 Entrepreneurial Climate at University ....................................................................................... 17 6.1.2 Impact of Entrepreneurial Climate at University ....................................................................... 17 6.1.3 Participation in the Entrepreneurship Programs ....................................................................... 18 6.2 Locus of control, attitude and entrepreneurial self-efficacy ............................................................ 19 6.2.1 Attitude towards Entrepreneurship........................................................................................... 19 6.2.2 Locus of Control ......................................................................................................................... 19 6.2.3 Self-Efficacy ................................................................................................................................ 20 6.3 Family Background ............................................................................................................................ 20 6.3 Society as a Whole ............................................................................................................................ 21 7. Nascent Entrepreneurs ........................................................................................................................... 23 7.1 Gestation ........................................................................................................................................... 25 7.2 Motivation......................................................................................................................................... 25 7.3 Founder Importance ......................................................................................................................... 26 7.4 Managing Importance ....................................................................................................................... 27 7.5 Business Idea..................................................................................................................................... 28
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8. Active Entrepreneurs .............................................................................................................................. 29 8.1 Motivation......................................................................................................................................... 30 8.2 Founder Importance ......................................................................................................................... 31 8.3 Managing Importance ....................................................................................................................... 32 9. Key Findings ............................................................................................................................................ 33 10. Conclusion and Recommendations....................................................................................................... 34 References: ................................................................................................................................................. 35
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List of Figures Figure 1: Theoretical Framework .................................................................................................................. 8 Figure 3: Nationality of Respondents ......................................................................................................... 10 Figure 4: Levels of Studies........................................................................................................................... 11 Figure 5: Field of Studies ............................................................................................................................. 12 Figure 6 (a): Career Path Pakistan and International.................................................................................. 14 Figure 6 (b) : Career Path ............................................................................................................................ 14 Figure 7 (a): Career Path After 5 Years Pakistan and International ........................................................... 16 Figure 7 (b): Career Paths After 5 Years ...................................................................................................... 16 Figure 9: Climate at university .................................................................................................................... 17 Figure 10: Impact of Entrepreneurial Climate ............................................................................................ 18 Figure 11: Participation in the Entrepreneurship Programs ....................................................................... 18 Figure 12: Attitude (1-7 scale)..................................................................................................................... 19 Figure 13: Locus of control (1-7 scale) ........................................................................................................ 20 Figure 14: Self-Efficacy (1-7 scale) .............................................................................................................. 20 Figure 15(a): Family and Entrepreneurship ................................................................................................ 21 Figure 15(b): Reaction ................................................................................................................................. 21 Figure 16: Society as a Whole ..................................................................................................................... 23 Figure 19: Created another Business Before .............................................................................................. 24 Figure 20: Economic Sector will your Business be Active .......................................................................... 24 Figure 21: Gestation .................................................................................................................................... 25 Figure 22(a): Motivation for Nascent Entrepreneurs ................................................................................. 26 Figure 22(b): Motivation for Nascent Entrepreneurs ................................................................................. 26 Figure 23: Importance for Nascent Entrepreneurs to Start a Business ...................................................... 27 Figure 24: Managing importance ................................................................................................................ 28 Figure 25: Sources of Business Ideas .......................................................................................................... 29 Figure 26: Economic Sector Business Mainly Active. ................................................................................. 30 Figure 27: Motivation for active entrepreneurs for doing a business ........................................................ 31 Figure 28: Importance for active Entrepreneurs to Start a Business.......................................................... 31 Figure 29(a): Managing Importance ........................................................................................................... 32 Figure 29(b): Managing Importance ........................................................................................................... 32
List of Tables Table 1: Universities Participated ................................................................................................................. 9 Figure 2: Gender ......................................................................................................................................... 10 Table 3: Career Path Right After Studies .................................................................................................... 13 Table 4: Career Path After 5 Years .............................................................................................................. 15 Table 5: Society as a Whole Index............................................................................................................... 22
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Executive summary The 7th edition of GUESSS study conducted in 2016 provides insights into the entrepreneurial attitude and intentions of students across the world. In this study 122,000 students from 50 countries participated, from Pakistan 1099 students of 12 universities Participated in this study.
The results of the study showed that among the respondents from Pakistan, 62% participant were male and 38% were female students, the average age of participant was 22 years. In Pakistan 11.3% students have intentions to start their business right after their studies as compare to 8.8% students globally. However, after five years of university education entrepreneurial intentions rate is 32% in Pakistan and 38.2% globally. The findings of the study suggested that on average Pakistani students get favorable entrepreneurial climate at their universities. Results of the study revealed that in Pakistan, 43.1% of the nascent student entrepreneurs get their business ideas from university studies and 23.9% students from research projects. However, conversion rate of these ideas into new businesses are lower in Pakistan as compare to global level. Findings on nascent student entrepreneurs showed that 14.2% nascent student entrepreneurs want to have 100% ownership in the business. These findings also indicated that male nascent student entrepreneurs are more willing to make their business as their main occupation than females. The study showed that active student entrepreneurs were 7.2% in Pakistan from which 24.8% have started their business in 2016. Among active student entrepreneurs businesses, 30% have no employees in Pakistan, while globally it is 26.9%. In Pakistan, female students have more positive attitude towards opening their own business than their male counterparts. However, when it comes to locus of control male students have more then female students in Pakistan. When it comes to confidence level for opening their new entrepreneurial venture; both male and female have almost equal level of self-efficacy. Results of study described that students get more support for entrepreneurial careers from their families especially when one or more member of their family is an entrepreneur.
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1. Introduction GUESSS project acronym of global university entrepreneurial spirit students’ survey is an international research study project that was initiated in 2003 by Swiss Research Institute of Small Business and Entrepreneurship, at the University of St. Gallen (KMU-HSG). The 7th edition of GUESSS conducted in 2016 become more international with the participation of 50 countries. For every data collection wave, the GUESSS core team developed a comprehensive survey that meets the highest academic standards. The link to the online survey is then sent out to the different country teams (every participating country is represented by one responsible country team). These country teams then forward the survey invitation to their own students and to the university partners they have recruited (who then also forward it to their respective students). The main objective of the project is to examine the entrepreneurial intentions, attitudes and activities of students around the world. After every two years the data is collected through survey. This is the 7th edition of the GUESSS in 2016 and Pakistan is participating for the first time. GUESSS aims at achieving the following basic goals;
Systematic and long‐term observation of entrepreneurial intentions and activities of students.
Identification of antecedents and boundary conditions in the context of new venture
creation and entrepreneurial careers in general.
Observation and evaluation of universities' activities and offerings related to the entrepreneurial education of students.
In broader perspective GUESSS has some objectives to achieve that are mainly for stakeholders;
Participating countries: generate insights on their respective basic conditions for entrepreneurship in general
Learning more about the entrepreneurial power of the students
Participating universities are enabled to assess the quantity and quality of their offerings in the context of entrepreneurship 7
Politics and public are sensitized for entrepreneurship in general and new venture creation in particular, and hopefully identify need for action
Students can benefit from the implementation of respective actions in the long term
Overall, GUESSS is maybe the largest entrepreneurship research project in the world.
We seek to further increase its global scope in the future and aim for an even stronger impact on research and practice.
2. Theoretical Framework The underlying theory behind the theoretical foundation of GUESSS project is the theory of planned behavior (TPH). According to this theory there are mainly three factors that generally influence the intentions to perform a specific behavior, those three factors are attitude toward the behavior, subjective norms, and perceived behavioral control. Figure 1: Theoretical Framework
University context
Attitude Subjective Norms
Family context
Perceived Behavioral Control
Career Choice Intention
Personal motives Social/ cultural context
3. Research Method From each participating country one university was selected to represent the survey. Data was collected using online questionnaire across all the universities and all the participating universities used the same questionnaire. These universities forwarded the questionnaire to their students. The questionnaire originally developed in English, the leading university in each country was made responsible for translating the questionnaire into local language if needed. In Pakistan the questionnaire was used in English language without making any changes into it.
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Sukkur IBA lead this in Pakistan for the 7th GUESSS research study project in 2016, data was collected from the first week of the April 2016 to the last week of the June 2016. More than 25 universities were invited out of which 12 universities (refer Table 1) agreed to participate in the survey. The online survey received 1099 responses of which 580 were valid responses that were used for analysis purpose in this report. Table 1: Universities Participated
1. Akhuwat-FIRST University 2. Foundation University, Islamabad 3. Ghulam Ishaq Khan Institute of Engineering Science and Technology 4.
Institute of Management Sciences, Peshawar
5.
International Islamic University Islamabad
6.
Isra University Hyderabad
7.
Lahore College of Women University
8. Mehran University of Engineering and Technology 9. Quaid-e-Azam University, Islamabad 10. Shah Abdul Latif University, Khairpur 11. Sukkur Institute of Business Administration (IBA) 12. University of Agriculture, Faisalabad 13. Other
4. Participants' Characteristics 4.1 Age The average age of the participants in the survey was 22 years (median= 18 years) in Pakistan, while international data shows that the average age of the participants is 23 years (median=23).
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4.2 Gender The survey result suggested that 62% participants were males and 38% participants were females who participated in the survey in Pakistan while globally 58.5% of female participated in the survey, which is higher than male respondents as shown in Figure 2. Figure 2: Gender 70.0%
62%
58.5%
60.0% 50.0%
41.5%
38%
40.0%
Internatinal
30.0%
National
20.0% 10.0% 0.0% Female
Male
4.3 Nationality Most of the respondents in this survey were Pakistani nationals (98.4%) while remaining were from Afghanistan and China and some other countries. Figure 3: Nationality of Respondents 120.0% 100.0%
99.3%
80.0% 60.0%
Nationality
40.0% 20.0% 0.3%
0.2%
0.2%
Afghani
Chinese
Other
0.0% Pakistani
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4.4 Levels of Studies In Pakistan 58.5% respondents were undergraduates as compare to 79.2% undergraduate participants globally. The postgraduate participants were 21.7% in comparison to international data that comprises of 16.1% postgraduate participant. Other level of studies e.g., PhD, MBA comprises 19.8% of total sample size while the international data show 4.6% of the students. Figure 4: Levels of Studies 90 80
79.2
70 60
58.5
50 %
International
40
Pakistan
30 16.2
20
21.7
19.8 4.6
10 0 Undergraduate (Bachelor)
Graduate (Master)
Other (e.g., PhD, MBA)
4.5 Field of Studies In Pakistan, the respondents were from various fields most the participants were from Law & Economics (incl. Business sciences) 27.4%, followed by 16% from engineering including computer science and architecture.
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Figure 5: Field of Studies 40%
35.9%
35% 30%
27.4%
25.4%
25% 20%
16.0%
15% 10% 5%
7.5%
8.3%8.8% 4.8%
1.9%
3.4% 1.8%
10.2% 8.8% 6.2%
0%
International National
4.6 Summary The data showed that majority of respondents were below 25 years. The participation rate for female was 38% along with males 62% showed the enthusiasm from both gender in responding the survey. Majority of the respondents were Pakistani with their counterparts from Afghanistan (.3%) and china (.2%). The participants were from various fields of studies almost covering a range of fields, mostly the respondent who responded are from Law & Economics (incl. Business sciences) with 27.4% followed by engineering students.
5. Career Choice Intentions/ Entrepreneurial Intentions The central question for the survey was to know the intentions of the students about starting their own business after university studies. In this regard the questions like-“what career path they will choose after studies” or “what career path they are expecting to have after five years”; were asked. In order to facilitate the analysis, we created four broader categories of respondents those who chose to be an employee are placed in category of “employee”; those who want to start their own business come under “founder” category; those who will succeed their family business or those
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which are not belong to family come under ‘successor” category and “other” category is for those who don’t know.
5.1 Career Path Right after Studies The findings from both Pakistan 74.6% and globally 80% showed a common trend that majority students right after their studies want to be an employee of any firm as indicated in figure 6 (a,b) Table 2: Career Path Right after Studies
Career Path Right after Studies
Pakistan
International
6.7
14.9
an employee in a medium-sized business (50-249 employees)
13.1
20.2
an employee in a large business (250 or more employees)
22.5
23.8
3.9
3.4
an employee in Academia (academic career path)
17.5
6.9
an employee in public service
14.4
10.8
a founder (entrepreneur) working in my own business
11.3
8.8
a successor in my parents' / family's business
2.5
1.9
a successor in a business currently not controlled by my family
0.8
0.7
7
8.1
an employee in a small business (1-49 employees)
an employee in a non-profit organization
Other / do not know yet
13
Figure 6 (a): Career Path Pakistan and International 8.1% 7.0%
Other / do not know yet a successor in a business currently not… a successor in my parents' / family's…
0.7% 0.8% 1.9% 2.5% 8.8% 11.3% 10.8% 14.4% 6.9% 17.5%
a founder (entrepreneur) working in my… an employee in public service an employee in Academia (academic…
International Pakistan
3.4% 3.9%
an employee in a non-profit organization an employee in a large business (250 or… an employee in a medium-sized business… an employee in a small business (1-49… 0%
6.7% 5%
10%
13.1% 14.9% 15%
23.8% 22.5% 20.2%
20%
25%
Figure 6 (b) : Career Path 90% 80%
78.1%
80.3%
70% 60% 50% Pakistan 40%
International
30% 20% 11.4% 10%
8.8% 3.5% 2.6%
7.1% 8.2%
0% Employee
Founder
Successor
Other
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5.2 Career Path after 5 Years When we look into Pakistani and the global responses of students, it was observed that after 5 years of completing their studies; more students showed their intentions to start their own business than right after completing their studies. If we compare fig 6(b) with fig 7 (b), we can find a change in intentions to become an entrepreneur over the period. In Pakistan intention to become entrepreneur after 5 years of completing their studies showed that 32.1% want start business as compare to 11.4% 5 years ago while globally it increased from 8.8% to 38.2%. Table 3: Career Path after 5 Years
Career Path after 5 Years:
Pakistan
International
an employee in a small business (1-49 employees)
3.1%
3.4%
an employee in a medium-sized business (50-249
3.7%
7.0%
13.7%
17.6%
4.1%
2.9%
an employee in Academia (academic career path)
13.9%
6.0%
an employee in public service
14.4%
9.5%
a founder (entrepreneur) working in my own business
32.0%
38.2%
a successor in my parents' / family's business
2.9%
2.3%
a successor in a business currently not controlled by my
4.3%
2.4%
7.4%
10.2%
employees) an employee in a large business (250 or more employees) an employee in a non-profit organization
family Other / do not know yet
15
Figure 7 (a): Career Path after 5 Years Pakistan and International Other / do not know yet a successor in a business currently not controlled by my family a successor in my parents' / family's business
10.2% 7.4% 2.4% 4.3% 2.3% 2.9%
a founder (entrepreneur) working in my own business
32.0% 9.5%
an employee in public service an employee in Academia (academic career path) an employee in a non-profit organization
6.0%
an employee in a small business (1-49 employees)
14.4%
International Pakistan
13.9%
2.9% 4.1%
an employee in a large business (250 or more employees) an employee in a medium-sized business (50249 employees)
38.2%
17.6% 13.7% 7.0% 3.7% 3.4% 3.1% 0% 5% 10% 15% 20% 25% 30% 35% 40% 45%
Figure 7 (b): Career Paths after 5 Years 60% 53.3% 50%
46.6% 38.2%
40% 32.1%
Pakistan
30%
International 20% 7.2%
10%
4.9%
7.4%
10.3%
0% Employee
Founder
Successor
Other
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6. Drivers of Entrepreneurial Intentions Under this section will analyze the intentions of students for becoming entrepreneurs and the drivers behind those intentions.
6.1 University Context 6.1.1 Entrepreneurial Climate at University
When the climate at university provides good opportunities to the students for starting their own business then it can increase the possibility that students may try to start businesses. In this regard students were asked that if their universities offer favorable climate or not. Questions like “The atmosphere at my university inspires me to develop ideas for new businesses”; “There is a favorable climate for becoming an entrepreneur at my university”; “At my university, students are encouraged to engage in entrepreneurial activities” were asked to know that how much the university have an environment to promote entrepreneurship for the students. The result indicated that Pakistani students find more favorable climate at university for staring business as compare to international students. Figure 9: Climate at university At my university, students are encouraged to engage in entrepreneurial activities.
4.3
There is a favorable climate for becoming an entrepreneur at my university.
4.2 4.6
The atmosphere at my university inspires me to develop ideas for new businesses.
4.1 4.9
5
0
1
2
International Pakistan
3
4
5
6
Mean
6.1.2 Impact of Entrepreneurial Climate at University
The result of the study suggested that the climate for promoting entrepreneurship at university effect positively on students intentions for starting business. Moreover, results also indicated that 62.5% of students found favorable environment at universities to enhance their ability to
17
understand and develop entrepreneurial skills. Globally, 38.5% of the students found favorable environment at universities. Figure 10: Impact of Entrepreneurial Climate Enhanced my ability to identify an opportunity.
5.26
Enhanced my ability to develop networks.
4.91
Enhanced my practical management skills in…
4.88
Increased my understanding of the actions…
4.97
Increased my understanding of the attitudes,…
5.15 0
1
2
Pakistan
3
4
5
6
7
Mean
6.1.3 Participation in the Entrepreneurship Programs
When universities provide favorable climate at campus for entrepreneurship then students ability to avail opportunities for opening their own business increases. For creating such environment for entrepreneurship, universities offer programs related to entrepreneurship like full degree programs or subjects. However the result indicated that 7.2% students studying specific program on entrepreneurship in Pakistani universities. Those who are taking entrepreneurship subject as an elective course were 23.2%, and those who study entrepreneurship as a compulsory subject are 22.4%. Figure 11 depict clearer picture of the students who are studying or not studying entrepreneurship Figure 11: Participation in the Entrepreneurship Programs I am studying in a specific program on entrepreneurship I have attended at least one entrepreneurship course as compulsory… International
I have attended at least one entrepreneurship course as elective.
Pakistan
I have not attended a course on entrepreneurship so far. 0
10
20
30
40
50
60
%
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6.2 Locus of Control, Attitude and Entrepreneurial Self-Efficacy 6.2.1 Attitude towards Entrepreneurship
The results suggested that on average Pakistani students have more positive attitude towards entrepreneurship in comparison to its international counterpart. In Pakistan male students have an average score of 5.5 and female have 5.4 on scale of 7 for the positive attitude for owning a business. While globally male students having an average of score of 5 and the female students average score was 4.1. Figure 12: Attitude (1-7 scale)
M e a n
5.6 5.4 5.2 5 4.8 4.6 4.4
5.4
5.5
5.5 5.1
Male
Female Pakistan
Overall
Male
4.9
5.0
Female
Overall
International
6.2.2 Locus of Control
After analyzing attitudes; we explored Pakistani and international students’ locus of control to start their own business in future. The result indicated that Pakistani students feel more positive than the international students. Male students having an average score of 5.32 while female students’ average was 5.28 on scale of 7 in Pakistan indicated that both were almost equally confident to start their own business in future. However, at global level the male students were more positive then female students.
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Figure 13: Locus of Control (1-7 scale) 6 5 M 4 e 3 a 2 n 1
5.3
5.2
5.3
Female
Overall
4.4
4.0
4.2
Female
Overall
0 Male
Male
Pakistan
International
6.2.3 Self-Efficacy
Self-efficacy is the confidence one has on his abilities and skills. When a person has positive attitude towards entrepreneurship and in future he is planning to execute his business for that purpose one should possess self-efficacy to go ahead and achieve his/her goal to become successful entrepreneur. The results indicated that Pakistani students have higher level of self-efficacy as compare to the international students. Figure 14: Self-Efficacy (1-7 scale) M e a n
6 5 4 3 2 1 0
5.4
Male
5.4
5.4
Female
Overall
4.7
Pakistan
Male
4.5
4.6
Female
Overall
International
6.3 Family Background Family play a role like an incubator for entrepreneurs and it is very helpful for entrepreneurs to start their business as they get good environment as well as support in order to initiate the business. The results indicated that in Pakistan higher no of students’ parents have entrepreneurial background as compare to international students’ parents.
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Figure 15(a): Family and Entrepreneurship 90 80 70 60 50 % 40 30 20 10 0
80.9 71.4 63.6 50
43.3
Are your parents self-employed?
26 2.80.9 No
17.5 10.8
4 1.7
Father Mother Both
No
Are your parents majority owners of a business?
12.3 6.6 3 5.3
Father Mother Both
Paksitan
International
The reaction on the willing of students to start their own business by other family members, friends and fellow student’s found that on average it was more positive in Pakistan than the global level. Figure 15(b): Reaction 5.77
5.8 5.73
5.75 5.7
5.71
5.65
5.64
5.65 5.6 5.55 5.5
5.46
5.45
International Pakistan
5.4 5.35 5.3 your close family
your friends
your fellow students
Mean
6.3 Society as a Whole Society defined by Mariam Webster as; “people in general thought of as living together in organized communities with shared laws, traditions, and values”. The results indicate that students and parents in Pakistan are taking pride in each other’s accomplishments. However, the score was little lower in Pakistan as compare to global level. In general the indicators for society have higher score in Pakistan than the rest of world.
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Table 4: Society as a Whole Index International
Pakistan
In my society, children take pride in the individual accomplishments of their parents.
5.46
5.32
In my society, parents take pride in the individual accomplishments of their children.
6.04
5.69
In my society, aging parents generally live at home with their children.
4.10
5.90
In my society, children generally live at home with their parents until they get married.
4.36
5.51
In my society, orderliness and consistency are stressed, even at the expense of
4.50
4.84
In my society, most people lead highly structured lives with few unexpected events.
4.51
4.76
In my society, societal requirements and instructions are spelled out in detail so citizens
4.43
4.69
In my society, individuals are encouraged to strive for continuously improved performance.
4.55
5.01
In my society, a person's influence is based primarily on: Ability and contribution to society
4.59
4.79
4.32
4.78
In my society, power is: Shared throughout society / Concentrated at the top
5.16
5.29
In my society, major rewards are based on: Only factors other than performance
4.25
3.96
4.24
4.43
Questions
experimentation and innovation.
know what they are expected to do.
/ Authority of one's position In my society, followers are expected to: Question leaders when in disagreement / Obey leaders without question
effectiveness (e.g., seniority) / Only performance effectiveness In my society, being innovative to improve performance is generally: Not rewarded / Substantially rewarded
22
Figure 16: Society as a Whole 4.43
In my society, being innovative to improve…
4.24
In my society, major rewards are based on:…
3.96 4.25
5.29 5.16 4.78 4.32 4.79 4.59 5.01 4.55 4.69 4.43 4.76 4.51 4.84 4.5 5.51 4.36 5.9 4.1 5.69 6.04 5.32 5.46
In my society, power is: Shared throughout… In my society, followers are expected to:… In my society, a person's influence is based… In my society, individuals are encouraged to… In my society, societal requirements and… In my society, most people lead highly… In my society, orderliness and consistency are… In my society, children generally live at home… In my society, aging parents generally live at… In my society, parents take pride in the… In my society, children take pride in the… 0
1
2
3
4
5
6
Pakistan International
7
Mean
7. Nascent Entrepreneurs To understand students, who are currently trying to start their own business, further analysis was done to know what they are trying to do for starting their business. The results suggested that 42.7% of the university students’ trying to start a business in Pakistan which is higher than the global level which is at 21.7%. The students who have shown their interest in starting their own businesses, 19.6% were from Sukkur IBA, followed by Akhwat-first, IMS and MUET with 17.7% and 11.6 percent respectively. When they were asked about the ownership share, 31.3% students said they will have 51-75 share in the business, 28% said they will possess 26-50% share in the ownership, 14.7% with 0-25%, 14.2% with 100% and 11.8% answered that they will have share of 76-99%. Nascent entrepreneurs were asked that how many co-founder they will have in their business to found, the results indicate that 26.9% will have two co-founder to establish a business, 38.1% says they will have female cofounder in their business, while 49.4% will be owned by individuals. However, 22.2% said they don’t have any fellow student as cofounder.
23
Most of the Pakistani 55% as well as international 44% nascent entrepreneurs are male and have not done any business before as compare to female (28% vs 42%); following figure shows the facts about Pakistan and international sample. Figure 19: Created another Business Before 55%
60% 50%
44%
42%
40% 28%
30%
10%
Yes
15%
20% 2%
NO
8%
6%
0% Female
Male
Female
Pakistan
Male Interantional
When the nascent entrepreneurs were asked “In which economic sector will your business be active in” in Pakistan most of the students answered that their business will be active in human health and social work activities. Whereas internationally students are more interested to operate in trade (wholesale/retail) industry. Figure 20: Economic Sector will your Business be Active 12.3 Other 11.4 0.9 Other services (e.g., transportation) 3.7 11.8 Trade (wholesale/retail) 13.7 2.8 Tourism and leisure 8.5 7.5 Manufacturing 6.5 14.2 Information technology (IT) and… 10.2 15.1 Human health and social work activities 6.2 2.8 Financial services (incl. banking, insurance,… 5.1 14.2 Education and training 5.8 3.3 Consulting (HR, law, management, tax) 7.5 0.9 Construction 2.8 2.8 Architecture and Engineering 7.1 11.3 Advertising / Design / Marketing 11.3 0
2
4
6
8
Pakistan International
10
12
14
16
%
24
7.1 Gestation In the start the entrepreneurs really have to work hard and to arrange resources necessary for starting business. In this regard they were asked to indicate which “gestation activities” they had already performed. The responses indicated that major gestation activities were done for gathering information about market, discussing product/idea and writing the business plan. Globally 51.2 % nascent entrepreneurs gestation activities focus more on gathering information about markets as compare to 39.3% nascent entrepreneurs in Pakistan. Figure 21: Gestation 23.8 20.1 10.3 Sold product or service 10.8 6.5 Registered the business 6.6 3.7 Applied for a patent, copyright or trademark 5.3 14 Attempted to obtain external funding 14.2 Purchased material, equipment or… 13.6 14.2 14.5 Started marketing or promotion efforts 14.3 14.5 Started product/service development 25.1 36.9 Written a business plan 30.5 39.3 Collected information about markets or… Nothing of the above done so far
International
51.2 43.9 35.4
Discussed product or business idea with… 0
Pakistan
10
20
30
40
50
60
%
7.2 Motivation What are the motives behind taking interest into opening a new business can be answered by looking at the average in figures 21(a, b). In Pakistan nascent entrepreneurs are motivated by many factors for starting their own business but on average their motivation mostly come from the idea which can play a proactive role in changing how the world operates. However, internationally nascent entrepreneurs on average are motivated by the factor to do something that allows them to enact values, which are core to them.
25
Figure 22(a): Motivation for Nascent Entrepreneurs To play a proactive role in changing how the…
6.1 6.0 5.8 5.7 5.9 5.9 6.0 5.2 4.7
To solve a societal problem that private… To solve a specific problem for a group of… To advance my career in the business world. To make money and become rich. 0
1
2
Pakistan
3
4
5
6
7
Mean
Figure 22(b): Motivation for Nascent Entrepreneurs To play a proactive role in changing how the… To do something that allows me to enact… To solve a societal problem that private… To play a proactive role in shaping the… To solve a specific problem for a group of… To be able to signal my capabilities to others… To advance my career in the business world. To mainly achieve financial success. To make money and become rich. 0.0
5.5 5.7 5.0 5.1 5.2 5.3 5.6 5.2 1.0
2.0
3.0
International
4.0
5.0
6.0
7.0
Mean
7.3 Founder Importance When it was compared that what are the things which are important to Pakistani and international nascent student entrepreneurs. We found that for Pakistani nascent student entrepreneurs it is important to convey their customers that they want to satisfy their needs rather than just to do business. They want to express to their customers that they fundamentally share their views, interests and values as important factors. On the other hand international nascent student entrepreneurs give more importance to convey their customers that they want to satisfy their needs rather than just to do business as shown in figure 23.
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Figure 23: Importance for Nascent Entrepreneurs to Start a Business 6.1 5.7 6 5.8 5.9 5.7 6.2 5.9 6.2 6.1 5.8 5.7 5.8 5.8 5.7 5.6
to make the world a “better place” (e.g., by… to be a highly responsible citizen of our world. to be true in serving a group of people that I… to be able to express to my customers that I… to convey to my customers that I want to… to provide a product/service that is useful to a… to have thoroughly analyzed the financial… to operate my firm on the basis of solid… 0
2
Pakistan International
4
6
8
Mean
7.4 Managing Importance Nascent entrepreneurs have something to give importance to do the business, how do they manage that importance is an important question. Results indicated that the Pakistani and international nascent student entrepreneurs have a strong focus on what the firm is able to achieve for societyat-large. Internationally and Pakistani nascent student entrepreneurs also give the importance to achieve competitive advantage in their domain of business.
27
Figure 24: Managing Importance To convince others that private firms are indeed able to address the type of societal challenges that my firm addresses (e.g., social justice, environmental protection).
5.54 6
To have a strong focus on what the firm is able to achieve for society-at-large.
5.75
To support and advance a group of people that I strongly identify with.
5.53
6.1
5.8 International
To have a strong focus on a group of people that I strongly identify with (e.g., friends, colleagues, club, community).
5.48
Pakistan
5.8
To establish a strong competitive advantage and significantly outperform other firms in my domain.
5.71
To have a strong focus on what my firm can achieve vis-à-vis the competition.
5.71
5.9
5.8 0
1
2
3
4
5
6
7
7.5 Business Idea Finding the business idea is very important question in Pakistan, 43.1% of the nascent student entrepreneurs gauged their ideas from university study, and 23.9% students from research project at university, 21.1% got their idea from family while remaining got their ideas from one resource or other. Internationally 36.9 percent of the students found widow of opportunity during university studies followed by the 31.5 percentage of students who got idea from their hobby and recreational pastime. Following figure elaborate more about Pakistani as well as international students.
28
Figure 25: Sources of Business Ideas 7.2
other
13 15.8 13.8 14.8
media (television, internet, etc) hobby or recreational pastime family members friends outside the university
7.7 9.3
other/previous self-employement
21.1 22.2 17.7 16.9
31.5
Pakistan
17.7 25.7 22.5 18.3 23.9 13.2
work activity outside the university Discussion with other students research project at university University studies 0
10
International
43.1 36.9 20
30
40
50
%
8. Active Entrepreneurs The result of the survey showed that only 7.2% respondents are active entrepreneurs, who are running some business or other in Pakistan in comparison globally level which is 8.8%. Among these active student entrepreneurs in Pakistani universities, 24.8% started their business in 2016.
Further analysis on active student entrepreneurs indicated that about 30% of the businesses have no employee; however remaining 70% possess the range of employees from 1-20 employees in Pakistan. Globally 26.9% of the firms have no employee, which is indicating similar trend as in Pakistan. If we see the percentage of ownership the entrepreneur possess in the business, Pakistan shows the same trends as international data, 39% Pakistani and 39.8% active student entrepreneurs own the 100% share in the business.
The active student entrepreneurs were asked that if they want to continue their business after they get their graduation, 65.9% Pakistani students said that they want to continue their business even after their graduation. While 55% of the international students said they want continue their entrepreneurial firm as well after their graduation. Most of the firms in Pakistan as well as globally does not have partners as the active student entrepreneurs own the business solely. In Pakistan 41.5% of the businesses does not have ownership stake of any other person, 19.5% of the active 29
student entrepreneurs have one partner. Internationally 28.7% of the businesses does not have ownership stake of any other individual, 24.5% have one partner, 24.7% have two partners, and 12.8% have three partners while 9.3% have more than three partners.
The nature of the business varies among active student entrepreneurs, some are more active in trade and others are running their business in education and training. Following figure shows the trend of Pakistani active student entrepreneurs according to their business operations in different sectors. Figure 26: Economic Sector Business Mainly Active. Other services (e.g., transportation) 3% Other 13%
Advertising / Design / Marketing 7%
Trade (wholesale/retail) 18%
Architecture and Engineering Construction 2% 2%
Tourism and leisure 3%
Consulting (HR, law, management, tax) 5%
Manufacturing 8%
Information technology (IT) and communication (incl. software & IT services) 10%
Education and training 22%
Human health and social work activities 7%
8.1 Motivation The study showed that the main motivation for staring business for active student entrepreneurs from Pakistan was to signal their capabilities to others (i.e., future employers, colleagues). However internationally active entrepreneurs get same as nascent entrepreneurs by doing something that allows them to enact values, which are core to who they are.
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Figure 27: Motivation for Active Entrepreneurs To play a proactive role in changing how the world…
5.1
To do something that allows me to enact values which…
5.1
To solve a societal problem that private businesses…
4.6
To play a proactive role in shaping the activities of a…
4.7
To solve a specific problem for a group of people that I…
4.7
To be able to signal my capabilities to others (i.e.,…
Pakistan
5.3
To advance my career in the business world.
5.1
To mainly achieve financial success.
4.5
To make money and become rich.
4 0
1
2
3
4
5
6
7
8.2 Founder Importance There are many things that are important for entrepreneurs to do, the study used set of things founder entrepreneurs think are important for them do to while they are running a business was asked from them as shown in figure 28. For Pakistani as well as international active student entrepreneurs conveying to customers that they want to satisfy their needs rather than just to do business was most important thing than anything else. Figure 28: Importance for active Entrepreneurs to Start a Business 5.4 5.4 5.3 5.6 5.6 5.6 5.6 5.7 5.8 6 5.1 5.6 5.1 5.4 5 5.3
… to make the world a “better place” (e.g., … … to be a highly responsible citizen of our… … to be true in serving a group of people… … to be able to express to my customers… … to convey to my customers that I want to… … to provide a product/service that is… … to have thoroughly analyzed the financial… … to operate my firm on the basis of solid …
0
1
2
3
Pakistan International
4
5
6
7
Note: these scores are averages of the scale from 1=totally disagree to 7= agree completely
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8.3 Managing Importance When inquired from active student entrepreneurs about managing importance of business. Active entrepreneurs on average score of 5.5 on scale of 7 think that they can manage their importance by establishing a strong competitive advantage and significantly outperforming other firms in my domain. The same was the preference of active student entrepreneurs internationally with similar score. Figure 29(a): Managing Importance
To convince others that private firms are…
5.4
To have a strong focus on what the firm is able…
5.2
To support and advance a group of people that…
5.2
To have a strong focus on a group of people…
5.3
To establish a strong competitive advantage…
5.5
To have a strong focus on what my firm can…
Pakistan
5.1 0
1
2
3
4
5
6
7
Mean
Figure 29(b): Managing Importance
To convince others that private firms are…
5.1
To have a strong focus on what the firm is…
5.3
To support and advance a group of people…
5.3
To have a strong focus on a group of people…
5.3
To establish a strong competitive advantage…
5.5017
To have a strong focus on what my firm can…
5.4 0
1
2
International
3
4
5
6
7
Mean
32
9. Key Findings GUESSS study 2016, provides insight into the entrepreneurial intentions and university experiences of over 122000 students from 50 countries, more than the previous survey in which 100, 000 responses from 34 countries were recorded. This was the 7th data collections wave from all over the world in which Pakistan participated for first time. This study provides multiple perspectives of entrepreneurial intentions around the globe generally and specifically in Pakistan. From field of study and family background to founder importance were analyzed along with their intentions to start business direct after their studies or after five years of study.
In Pakistan 12 universities participated in the survey lead by Sukkur IBA in which 1099 responses were submitted of which 580 were valid responses.
The findings of the study showed that average age students participated in the study was 22 years. Among the respondents 62% were male and 38% were females. The participant rate of undergraduate students was 58.5% as compare to 21.7% graduate students and 19.8% others including PhD/MBA students. Law, economic and business students participated more enthusiastically followed by engineering students.
In Pakistan 11.3% students want to start their business right after studies as compare to 8.8% globally. The students who want to start their business after five years of university education are 32% in Pakistan and 38.2% globally. In Pakistan on average students get more favorable entrepreneurial climate at university for idea generation as compare to global level university climate. This was also visible from the results, which suggested that 43.1% of the students got their ideas from university studies and 23.9% students from research projects. The findings also indicated that only 7.2% students studying specific program on entrepreneurship in Pakistani universities. In Pakistan female students have more positive attitude towards starting their own business than the male students. However, when it comes to locus of their control male have more control then female in Pakistan. When it comes to confidence level for opening their new entrepreneurial venture; both male and female have almost equal level of self-efficacy. Majority student entrepreneurs get more support from their family especially when their mother or father is 33
entrepreneur. It is easier for students to get their business started when there is someone from their family also created new businesses. Among respondents 43.3% have self-employed fathers while 2.8% students have self-employed mother, 2% described that their mother as well as their father are self-employed. However, when it comes to support for starting their own business in Pakistan on average students were more supported by their friends than their family members. The results indicated that 14.2% nascent student entrepreneur’s going to own 100% share in the business. Among nascent student entrepreneurs male students were more willing to make their business as their main occupation as compare to female students. Among the nascent entrepreneurs who intended to open their business, 15% male and 2% female already have prior business experience. In Pakistan nascent students entrepreneurs were more interested to involve in the startup businesses related to human health and social work. Active student entrepreneurs who already own their business were 7.2%, of which 24.8% have started their business in 2016. Among the active student entrepreneur businesses, 30% have no employees in comparison globally 26.9% of the active student entrepreneur businesses have no employee at all. Among these active students entrepreneurs majority were in education/training and wholesale/retailers related startups.
10. Conclusion and Recommendations The GUESSS study 2016 was conducted to understand the interest of students towards entrepreneurship. The literature suggest that for starting a business many things are important like entrepreneurial climate, idea, support, motivation, confidence and so many things. The findings of this survey indicated more favorable students’ entrepreneurial intentions in Pakistan as compared to globally for becoming entrepreneurs right after studies. This is due to favorable entrepreneurial environment students get at university level which developed their ability to search for information about market for getting entrepreneurial ideas based on the knowledge derived from studies, research projects and interaction with significant others. This suggest that university education play an important role in developing entrepreneurial alertness among the students for identifying the opportunities (Chang, Liu, & Hang, 2014).
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However, many students are not able to convert ideas into startups. The low conversion rate of idea into the startup business may be due to the result of unfavorable environment for doing business in Pakistan as indicated by World Bank report of 2014 which rank Pakistan at 105th out of 189 countries for starting businesses. This signify that universities should also help students in developing understanding and practicing the knowledge, skills and techniques of doing business in such environment for turning ideas into startups. For overcoming this barrier and fostering entrepreneurial climate universities should need to have more innovative ways so that the percentage of active entrepreneurs can be increased. There is need of promoting favorable environment for doing business by developing infrastructure in form of pre-incubators and incubators in universities. Starting more entrepreneurship related programs based on entrepreneurial education alertness and intention (EEAI) model (Samo, A.H, 2016), which not only teach them about idea generation but also develop their ability to start business in an unfavorable environment
References: Chang, W. L., Liu, J. Y., & Huang, W. G. (2014). A Study of the Relationship between Entrepreneurship Courses and Opportunity Identification: An empirical survey. Asia Pacific Management Review, 19(1), 1-24. Samo, A.H, (2016). Entrepreneurial Education Alertness and Intention Model, Lambert Academic Publishing. World Bank Report on doing business in Pakistan( 2014). http://www.doingbusiness.org/
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