The high-tech startup industry in Pakistan is facing many challenges. Some of these challenges are because of government policies.
A case in point: we run a company, Aero Engine Craft Ltd, which is Pakistan’s first aerospace R&D startup that is developing environmentally safe contrail-free aircraft engines for the global aviation industry.
A deep-tech startup like ours needs infrastructure and it has to be grounded at a location. Unlike IT startups, they cannot relocate to the Silicon Valley in the acceleration phase. They need technical support from the tech ecosystem around them for innovative development.
In Pakistan, such clusters with huge capital-intensive, high-tech infrastructure reside within the government’s domain.
Although they are strategic in nature, they are underutilised and operating at a fraction of their capacity that is limited to defence maintenance.
Heavy Industries Taxila, Heavy Mechanical Complex, Pakistan Ordnance Factory, Pakistan Aeronautical Complex and Precision Engineering Complex are strategically important, but commercially dormant organisations. They have a lot of wasted potential, although they are fairly equipped to support commercial spaces and the R&D industry
Heavy Industries Taxila (HIT), Heavy Mechanical Complex (HMC), Pakistan Ordnance Factory (POF), Pakistan Aeronautical Complex (PAC), Precision Engineering Complex (PEC) and Technology Upgradation and Skill Development Company (TUSDEC) are a few example of strategically important, but commercially dormant organisations. They have a lot of wasted potential, although they are fairly equipped to support commercial spaces and the tech R&D industry.
Despite capacity, resource and massive infrastructure, there exists neither the incentive to work nor the procedures to support commercial technological development within these organisations. Similarly, some labs in academic institutions are also very well-equipped. But unfortunately, they do not have a commercial outlet for growth.
In developed countries, such high-tech industrial complexes have a strategic division and a parallel commercial division for growth. Organisations such as Rolls-Royce, Airbus and Boeing operate commercial and military wings and are multi-national entities in their own right.
In addition, deep-tech startups lack the funding and facility to import technology. As a result, they have to develop all technology in-house, which is an expense on their time and money. Secondly such startups cannot make heavy investments into infrastructure, such as precision machinery and equipment, as it is capital-intensive with spatial and temporal constraints. Unfortunately, there is no cluster of high-tech industry in the private sector that can support its elements.
For all the above reasons, venture capitalists and private investors lack confidence to invest in tech-intense startups.
Firstly, they want quick returns. Secondly, they know that no technical support exists to build up the technologies to scale and mass produce. In other countries, startups trying to make supersonic commercial planes have raised around $100 million from venture capitalists.
Thirdly, government research grants in Pakistan mostly support core research, which will be applied in the next century. The focus is on seed research. It has its own importance, but is limited to an academic environment. Therefore, it is not the suitable breeding ground for high-speed commercial growth. You can plant a seed of invention in a research environment and grow a sapling, but you cannot grow a forest. It requires full-time dedication and commitment — and a lot of speed.
The open-source research produced by Pakistani academics and scientists in this realm is used by other countries to make commercial products — for example, drugs, batteries, solar cells etc. — as well as financial profits. Whereas in Pakistan, we glorify ourselves by publishing research in high-impact factor journals only and that is where it ends.
This is due to a lack of funding and vision for product-based tech startups in our entrepreneurial landscape.
Some government organisations want to support IT-based platforms only whereas technology is a wrap-up in this day and age. You cannot determine where one tech domain ends and the other begins — so it is a rather unfair argument. There is no priority set to fund applied impactful research that can be commercialised. Unless we cash in on our institutional research by funding technology startups as a priority, our entrepreneurial landscape is bound to stay barren.
Institutional research is only one-third of the work on the road to commercialisation — and that too on a logarithmic trajectory.
Dr Qureshi is CEO and Mr Qureshi os CTO of Aero Engine Craft Ltd
Published in Dawn, The Business and Finance Weekly, February 1st, 2021