Innovation under Pressure: Mapping the Boom, Challenges, and Resilience of Pakistan’s Startup Ecosystem (2019–2024)

Abstract

The Pakistani startup ecosystem has undergone profound changes from 2019 through 2024. This paper provides a comprehensive analysis of these developments at the national level, encompassing all major regions and industries. We conduct a thorough literature review of entrepreneurship in Pakistan, covering venture capital growth, the rise of innovation hubs and incubators, evolving government policies, and the dynamics among ecosystem stakeholders. Using a mixed-methods approach that combines quantitative analysis of publicly available data with qualitative insights from reports and studies, we map the ecosystem’s trajectory over the past five years. Key indicators including the number of startups, funding volumes, incubator/accelerator proliferation, investment flows, gender participation, and regional distribution are examined in depth. We find that Pakistan experienced an unprecedented venture funding boom in 2021–2022 (peaking at over $350 million in 2021), followed by a sharp correction in 2023 amid global and domestic headwinds. The number of supporting organizations (incubators, accelerators, co-working spaces) expanded dramatically, backed by both public and private initiatives. Yet, challenges such as a persistent early-stage funding gap, gender disparities, and regional imbalances remain. The discussion situates these findings in the broader context of Pakistan’s economic and social environment, adopting a humanistic lens on how entrepreneurship impacts society. We conclude with actionable recommendations for policymakers, educators, investors, and entrepreneurs aimed at fostering a more resilient, inclusive, and innovative startup ecosystem in Pakistan.