There are many communities in the country which are not known for their entrepreneurial orientation. Urdu speaking and saraeki communities are known examples. The said communities rather look more toward job opportunities to ensure financial security. For better jobs, higher education is a pre-requisite. So the people in the middle or lower classes in such communities have to look at public educational institutions to seek higher education as few can afford the hefty fees of private educational institutions. Public educational institutions, with limited capacities and politically determined quotas, thus become a source of confrontation in between different ethnic groups in the country. Government jobs are another source of confrontation between ethnic groups.
An alternative scenario also exists in the country. There are examples of various other communities who instead of relying on jobs in public or private sector, have been creating jobs for themselves and for others by virtue of their entrepreneurial orientation. Entrepreneurial orientation perhaps eliminates the possibility of getting into confrontation with other ethnic groups over limited jobs available in public or private sector. Question therefore is how job oriented communities can develop an entrepreneurial orientation to stop their reliance on the limited job market. To answer this question we can look at the constituents of an entrepreneurial culture among the leading entrepreneurial communities like Memon, Delhi wala and Chinioti. Also how these cultural components can be brought into other communities.
Social capital and Entrepreneurship
A common myth about entrepreneurship is that it requires a lot of investment. Memon, Delhi wala and Chinioti communities on the contrary started with a very humble background. Many centuries before, all what they had was (a) a strong culture of trust, (b) a will to survive in an economic atmosphere dominated by Hindu community, and (c) a strong belief in the benevolence of their Creator. Delhi wala community got some support from a Mughal emperor in the beginning; however, their source of livelihood was confiscated by the British establishment as a punishment for supporting the rebels in the 1857 mutiny against the British forces. The three communities survived through tough times by virtue of one critical component of their culture, that is: The spirit of trust, cooperation and sacrifice for others. This cultural component is also referred to as ‘social capital’ in modern literature. European history also contains a few similar examples. Protestants, Dutch and Jews, just to name a few, also faced difficult circumstances yet survived by virtue of a high degree of social capital. Study of European communities in the history, various entrepreneurial-ethnic-groups around the world and in Pakistan, suggests that social capital within such groups is a fundamental ingredient in the development of entrepreneurial culture.
Without social capital, development of an entrepreneurial culture is perhaps not possible. This is because entrepreneurs need a lot of support from the people around them when they intend to start a business. A prior relationship with potential suppliers, vendors, customers, distributors, retailers, employees, partners, investors, mentors etc. makes it a whole lot easier. A customer you already know might give you confidence that if the product/service is at the right price, right quality and delivered at the right time, than he or she would purchase. A supplier may offer supplies on credit, while employees who trusts in you, may wait for a few days in case if you fail to pay salary on time. Investors may invest not just because they want to support, but also because they have trust in your character, and that you may not disappear with the money, also because it is not just your credibility, but the credibility of your entire family which is at stake. Now as the business paddles ahead, the continuous support from all the stakeholders makes it much easier for the entrepreneur. Now imagine if the stakeholders do not trust each other, or not willing to cooperate. How would that facilitate each other? Trust is the fundamental lubricant of in any market, which allows the flow of capital and resources between stakeholders; it is not the other way around.
How to develop social capital?
How social capital and subsequent entrepreneurial orientation can be developed in a community? To answer this we may look at the experience of local entrepreneurial communities. The experience of Memon, Delhi wala and Chinioti in this regards is not very different from their European counterparts as mentioned above. Their experience suggests that a strong religious orientation among community members provides the basic motivation for cooperative behavior and entrepreneurial orientation. There are many examples from the tradition of the Prophet s.a.w and the life of Sahaba-e-kiram r.a which encourage self-employment, which can be referred to as the first step on the path of entrepreneurship. Islamic Belief in God as provider of sustenance can make a believer less risk averse, collaborative behavior encouraged by Islam can foster trust, and fear of Day of Judgment can prevent Muslim entrepreneurs from betraying commitments in the market. So for a Muslim community, the first encouragement toward cooperative behavior and entrepreneurship emerges right from their own belief system.
The concerned in job oriented communities needs to evaluate if such a culture of trust, cooperation and sacrifice persist in their community? Assuming if it does not, then working on enhancing the religious orientation of the community member may help. Practicing Muslims are more likely to cooperative and sacrifice for others and honor their commitments for the sake of reward on the Day of Judgment, while such a behavior makes them appear more trustworthy among stakeholders.
Practical use of social capital increases social capital. When a person honors his commitment with stakeholders, cooperates with others, than such a behavior typically increases the level of trust between two people. There is a saying in Urdu language ‘tali donon hathoon say bajti hai’, means it takes two hands to clap. Therefore, more stakeholders indulging in trustworthy and cooperative behavior can trigger a virtuous cycle subsequently increasing the likelihood of such a behavior in future. The spirit of cooperation and sacrifice among the family members (usually brothers) working together in the same business is pivotal to the success of a family business and survival during tough times.
Sometimes the level of trust in a community drops so low that cooperative behavior raises eyebrows, and people question very intention of the person cooperating with others. If so happens, then a practicing Muslim need to recall that doubting other’s intentions (bad-gumani) is strictly discouraged by Prophet s.a.w. Furthermore, backbiting (gheebat), and making a baseless accusation behind someone’s back (bohtan) are grave sin. In a community where such social ills exist, developing a culture of trust is difficult. More religious education about desirable and undesirable habits, therefore, is important to increase the level of social capital among the community members. The upbringing of children by the parents and family members is critical in development of desirable behavior.
The Motivation for Entrepreneurship
Social capital is a fundamental ingredient of an entrepreneurial culture; however, it may not be the key driver toward entrepreneurship. Likewise, the belief that Allah s.w.t is the sole provider of sustenance also reduces the risk avoiding behavior, another necessary ingredient of entrepreneurial mindset, but may not push a person to start a venture. The push or motivation toward an entrepreneurial orientation can be of intrinsic or extrinsic nature. Teachings of Islam do provide some intrinsic motivation. For example:
- A hadith suggests that 9/10 parts of rizq are provided by Allah s.w.t to the traders in the market, while only 1/10th is for the labor class. Furthermore, doing a business is Sunnah of Prophet s.a.w, and Sahaba-e-kiram r.a.
- Research (published in Harvard Business Review) also suggests that a business man or an entrepreneur may also live a more ideologically independent life as compare to an employee. Employees often have to agree with the values or beliefs of their employers to improve their job prospects. This may not be the case of entrepreneurs, if they are not highly dependent on someone like an investor.
- Islam also does not discourage its followers to strive for financial security in a legitimate way, in fact Islam discourage toward choosing a life where one is at the risk of begging for help from others. In order to ensure financial security for oneself and family, a person may want to put his or her eggs in multiple baskets. It means starting multiple ventures or diversifying one’s portfolio of investments over the period of time may enhance a person’s financial security. This is very much possible for an entrepreneur, however, difficult - if not impossible - for an employee.
On the other hand, extrinsic motivation can emerge due to the threats in the external world. For example, lack of employment opportunities. Chinioti community, for example, was dependent on Hindu community almost a century before, as Hindu were dominating in every business. But some members of the Chinioti community observed that Hindu do not touch animal hides due to religious reasons. Hides were converted into leather, a raw material for a variety of goods like shoes and bags. A few entrepreneurs from the Chinioti community experimented with dealing in hides, and started in a very humble way. This turned out to be a road toward immense fortune for the pioneering entrepreneurs in Chinioti community. Looking at the success of a few, the rest also got motivated, and ventured into the leather business with the help of the pioneers. After a few generations, they have diversified in a variety of fields. For more details, please see the book ‘Kamyab Log’ by Dr. Amjad Saqib.
How to start?
The answer to this question would depend on your age. For example, consider a person in 40s who is already employed, have a family to support, kids going to school, a kitchen to run etc, with no other financial support; such a person would be risk averse. However, the same person may have market experience, necessary level of maturity, contacts, credibility, some savings to invest which may help him or her to initiate something, depending on how street smart a person is. Someone who is much younger, perhaps in his teenage or early 20s, unmarried, may not have financial pressures (if his or her family is financially stable), and can experiment starting something, however he or she may lack the necessary experience, level of maturity, contacts and credibility, and may have to borrow money from his parents or elders.
If we look at Memon, Delhi wala and Chinioti, we see that their path toward entrepreneurship begin perhaps very early. At the age of 14-15 the boys particularly are encouraged to spend time in father’s business, or business of a relative, or a family friend etc. Often teenagers spend a few hours every day in a running business, generally doing odd jobs. They are also encouraged to spend much of their summer vacations likewise. By the time a boy reaches his 20s, he already has many years of market experience, and has learnt the tricks of the trade. Furthermore, they have full moral support of their family if they want to initiate something on their own after gaining many years of experience.
For job oriented communities, this is perhaps difficult to digest. They would want their children to only focus on their formal education, which is considered fundamentally important to secure admission in a reputable university, which is believed to be a pre-requisite to get a good job. However, entrepreneurial communities which are not dependent on job market for financial security may consider formal education as a matter of life and death. So if as a parent you are willing to support your children to become entrepreneurs, you may also encourage them to spend time in a running business (smaller is better), so they may learn the tricks of the trade first hand. However, in order for this to happen, you must personally know a businessman or an entrepreneur who is willing to accommodate your boy and provide him the necessary training.
For the person who is married and have financial obligations toward his family, who now wants to start a business, might want to check if he or she already knows a customer. Many Memon, Delhi wala, Chinioti already know a willing customer before taking the risk. All what they have to do is to make sure that they fulfill the customer’s expectation so ensure repeat sales. This is exactly where the prior relationship with the potential suppliers, vendors, potential employees, partners, investors, mentors, etc. may become handy. An employed person may take a leave from his job for a couple of weeks, and try to engage all the potential stakeholders to ensure a sale. But taking a leave may not be required at all in some cases. It might be very much possible to fulfill a customer’s requirement in your free hours after the job or on your weekend. Once you see customer’s coming back, and even bringing more customers by referring you to others, then you might think of leaving your fulltime job if the returns are promising. To summarize, the following questions you might want to ask from yourself:
1. Do I have the necessary skill/experience in domain
2. Do I have the necessary contacts with the right vendors, suppliers, distributors, customers, and do they also trust me?
3. Do I know people who I can hire
4. Can I satisfy customer needs/wants using my skill, experience, connections, contacts and other resources.
5. Can I satisfy some customers without investing, or investing only 1/10th of the financial resources I have?
6. Is my family willing to support me in the process of taking the jump toward starting my own business, will they back me up for a while in case if I collapse?
If you are working in a small or medium size business, and if you have good terms with the owner, then you might look for an opportunity to get into partnership over a new venture which your employer might want to start but do not have the necessary time to do so. Your employer can also be your first customer. A student entrepreneur of mine had an employee who would cut potatoes for French fries for his small food outlet. The boy instead decided to sell my student potatoes strips, he even asked for a small investment from my student (his employer) which he provided happily. In a few months he was supplying large quantity to many food outlets and restaurant, earning a handsome amount per month. Now sky is the limit for him. There are many such examples.
Frugal Lifestyle, Organic Growth and Communal Support
The habit of frugal lifestyle, encouraged by teaching of Islam, also followed by the elders of Memon, Delhi wala and Chinioti communities in general (the new generation is these communities are perhaps leaving this habit), can be referred to as fundament to successfully walk on the path of entrepreneurship. Robert Kiyosaki is among the modern advocates of this habit for entrepreneurs. Kiyosaki suggests that an entrepreneur must avoid spending on any asset which does not yield any return to the extent possible. A frugal lifestyle allows an entrepreneur to avoid spending on any unnecessary expenses, particularly luxuries, while reinvesting some of his savings back into the business and keeping the rest for an uncertain future. Memon community is particularly known, even mocked due to their frugal habits. Those who mock, perhaps fail to understand the deep wisdom behind this habit. The modern followers of Minimalism and Stoic philosophy (which includes top entrepreneurs of Silicon Valley) on the contrary would fully understand the wisdom behind the Memon’s attitude toward spending on necessities only.
It must be noted that the personal expense of an entrepreneur’s lifestyle or the lifestyle adopted by his or her dependents, is a cost of business he or she owns. According to a Chinioti entrepreneur, by keeping their expenses to the bare minimum, Memon today still can outperform the Chinioti entrepreneurs in the market. The money saved by avoiding unnecessary expense not just at a personal level, but also while doing business (like maintaining a luxurious office even if does not add any value to the business), can be reinvested in the business, or can provide safety net to the entrepreneur in case business suffer some kind of a loss. Reinvestment of profits also saves an entrepreneur from approaching a bank whose involvement is also found to be paradoxically detrimental for business growth. All entrepreneurs I interviewed from Memon, Delhi wala and Chinioti community shared a similar concern. Recently a friend working with entrepreneurs in Sialkot also shared a similar observation.
An entrepreneur, who do not owe to a bank, or any informal investor, who also have been able to sufficiently save, is more capable of facilitating new entrepreneurs or the ones in trouble. A culture of frugality wide spread in an entrepreneurial community can better facilitate other entrepreneurs within or even outside the community.
Indirectly a culture of frugality can also contribute in maintaining social capital. The social relationship between family members, relatives and even community members can become competitive in a material sense, with a culture of auspicious consumption of luxury items. The resources at the disposal of community members, which were used to facilitate each other, may be diverted toward raising the so called standard of living. As a result class consciousness may spread, competition may often turn into conflicts, subsequently weakening the social bonding and the spirit to cooperate and sacrifice within the community members. The reduction of cooperation and sacrifice may also end up reducing the level of trust. A culture of frugality is crucial to maintain high degree of social capital in a community.
Therefore, a job oriented community which intends to turn entrepreneurial may also look into its spending habits. Competition to get ahead in material consumption may have a negative impact on entrepreneurial success. The social relations which are fundamental to entrepreneurial success may also be weakened in the process.
Final thoughts
A question which has not been sufficiently answered so far is who is going to bring this change within the job oriented communities? The answer is ‘you’, if you happen to be a part of the communities. This you may do by (a) setting an example by following the suggestions mentioned above, and if you are too old then encouraging the young ones in your family toward starting their own venture, (b) by initiating a discussion and sharing business ideas with the community members, (c) sharing this article, even translate it if possible, or similar ones within your network, (d) finding like minded people who can keep reminding each other, etc.
Cultural transformation is an intergenerational process. Many from the job oriented communities which I meet frequently are already convinced to walk on an entrepreneurial path, all what they need is perhaps some moral support from the elders in their family. On the contrary the new generation of the Memon, Delhi wala and Chinioti communities are becoming job oriented. Some business owners in these communities are not even hopeful that their generations old family business would survive after them as their children are no more interested to carry it forward. This would eventually leave gaps in the market in coming years. Perhaps entrepreneurs from job oriented communities can fill in the gaps, or let the Chinese avail the developing opportunity.
The future depends on the choices which we make today. If we intend to secure the financial future of our upcoming generation, the answer perhaps lies in become self-reliant by walking the path of entrepreneurship. The living examples in entrepreneurial communities can provide immense learning opportunities. If we want to remain hopelessly dependent on public and private institutions to keep creating jobs for us, then it up to us. However, if we want to take the charge of our own destinies, then the choice is again ours.
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