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In its 2022 report, the startup ecosystem evaluation website Startup Blink put Karachi among the top 10 start-up-friendly cities in South Asia.

The port city of Pakistan has broken India"s dominance of the list by moving up four spots in a year to enter the top ten cities.

The other nine cities are all in India, but according to reports, Karachi has eclipsed Lahore as the top city in Pakistan this year as well as other towns with a reputation for being startup-friendly.

However, Karachi"s position has fallen five positions to number 291 on a global scale.

Lahore, meanwhile, dropped 48 spots this year to take up position 305 globally. Third in Pakistan, Islamabad fell one spot to 438th overall on the list.

Pakistan dropped two spots overall in the global ranking of startup-friendly countries, landing at position 76. Additionally, it came in second place in South Asia and fourth place among the nations of the Central Asia Regional Economic Corporation (CAREC).

According to the paper, effective start-ups and digitization are crucial to Pakistan"s economic growth.

During the pandemic, Pakistan saw an increase in digital entrepreneurship and investment in startups. These businesses were helped along by advancements in broadband availability, digital infrastructure, and a new foundation for digital payments. Special Technology Zones provided tax breaks and incentives to nearby IT businesses.

According to the research, Pakistan has made significant progress in strengthening its legal system to support digitization, but still need clarification on taxes and incentives for domestic investment.

According to Start Blinkup, the nation"s political unrest makes it difficult to establish dependable rules and a trusting atmosphere that would improve its startup ecosystem. Concerns about the availability of skilled labour and the rising capital need for new businesses are also present.

Due to the rising demand for financing for new start-ups, Pakistan must strengthen its startup ecosystem in order to meet these demands for competent and trained labour.