for Key Role in the Innovation Economy
By Faruq Ahmad
The aisles were crammed,
and the booths were jammed. Earnest and intense
men (and some women) listened attentively as exhibitors
pitched gadgets, software solutions and services,
with all the exuberance of Silicon Valley. Monitors
flickered, there was garish advertising everywhere,
and an occasional TV crew wandered by, interviewing
and taping. The energy level was high, a mix of
excitement, adrenaline and confidence. This could
be Las Vegas or San Francisco. But Karachi, Pakistan?
I was at the Karachi Convention Center, where the
7th annual Information Technology Commerce Network
trade show was in full swing last month, with a
reported 60,000 in attendance. I had been invited
to speak at a daylong CEO forum program organized
by the Pakistan Software Export Board that ran concurrently
with the trade show. My fellow speakers included
Greg Hinkley, CEO of Mentor Graphics, who announced
that his development team from Lahore, Pakistan,
would be filing its first patent.
Some of those attending paid an extra $250 to hear
venture capitalists from the United States talk
about entrepreneurship, and how they could make
it big in the innovation economy. The room was full.
But Pakistan, you say with unease - isn't travel
there especially risky? Well, not for almost a dozen
invited Americans who mingled freely with the locals,
in what is just another bustling South Asian city.
While I would not attempt to underplay travel risks
for visitors, it was equally clear that here in
the United States, our anxieties are far too easily
stoked, and there is a lot to be said for replacing
fear with facts.
Pakistan is an ethnically similar, smaller neighbor
to India. Could its recent rapid 7 percent-plus
growth rate turn it into the next innovation-economy
player in the region? Its economic vitality in recent
years is consistent with the 800 percent increase
in its stock market. A key step is to build a bridge
to Silicon Valley, and the country is rapidly stepping
up its links. The South Asian networking group the
Indus Entrepreneurs (www.tie.org) already has offices
in Karachi and Lahore, and OPEN
( www.opensiliconvalley.com ) is following suit.
India and Pakistan are better viewed as companions,
rather than competitors. India is bursting at the
seams, and for some types of projects, Pakistan
could be the better choice, to everyone's benefit.
Hinkley, for example, said his company picked Pakistan
for its development team because of workforce quality,
lower costs and lower turnover.
As opportunities grow, experienced Pakistanis from
abroad are returning to positions of responsibility.
I was pleasantly surprised to find bureaucrats with
backgrounds that were anything but bureaucratic.
Yusuf Hussain, director of the software export board,
is a graduate of Rice, Cornell and the University
of Texas, and has been an executive at Time Warner
and MCI. His team includes Aon Rana, who cut his
teeth in senior marketing roles at Orange business
services in the United Kingdom.
In my field of expertise, venture capital, Pakistan's
success is particularly hard to predict. My investment
experience includes India and China, and I saw how
long it took these countries to get to critical
mass as attractive investment destinations for US
institutional investors. Pakistan is assembling
a $50 million fund to help kick-start venture capital
support for local companies. How the government
structures and selects managers for this fund will
determine whether future funds attract institutional
investors and sponsorship support from top Silicon
Valley firms, assuming attractive deal flow.
Done right, this first fund could help lay out a
road map for venture capital that moves Pakistan
forward in the global innovation economy. Pakistan
may be late to the party, but it seems to have finally
found the directions.
What of all the political turmoil that appears to
taint Pakistan? As one seasoned Indian-American
veteran of Silicon Valley pointed out to me, it
is an entrepreneur's job to turn handicap into opportunity.
Start-ups never have enough capital, or the right
people, or the revenue momentum or brand presence.
In Pakistan, add political stability to the list.
So long as it does not turn into a show-stopper,
it is just another challenge to work around. Judging
from my visit, Pakistanis certainly seem to be gearing
up to the task.
(Faruq Ahmad, founding partner of Palo Alto Capital
Advisors, was born in Pakistan. He received engineering
degrees from MIT and Stanford, and an MBA from Stanford.
Courtesy San Jose Mercury News)