CYBERSECURITY AND ECONOMIC RESILIENCE IN SMES: A CASE STUDY OF PAKISTAN

This study aims to determine the role of cybersecurity in Pakistan's SMEs economically through the analysis of merit-goods, market failures, and public goods' economic theories. Due to an increase in the number of Internet users reaching over 87 million in 2023, the financial technology industry of Pakistan is developing quickly. Now, cyber threats have a much bigger attack surface due to fast digital development of the country. This study demonstrates that cybersecurity in Pakistani SMEs is characterized by four basic features of a merit good: extensive positive externalities, continuous market failures, widespread knowledge asymmetry among the SME managers, and underinvestment compared to the socially optimum level. This is achieved through a quantitative cross-sectional survey of 300 Pakistani SMEs conducted between November 2025 and April 2026, situated within a comparative single-country case framework [3], supplemented by secondary data sources and the theory of merit goods provided by the UK-based research [1]. In addition, the results of this study are discussed in terms of UN Sustainable Development Goals (SDG 8-Decent Work and Economic Growth and SDG 9-Industry, Innovation and Infrastructure). This study provides a complete seven-dimension Qualitative Management Framework for SME Cybersecurity in Pakistan to provide practical recommendations for managers, policymakers and institutions involved. Suggestions for the future include policy reforms, institutional development, regulatory harmonization, and the core research program that allows for further quantitative validation. Keywords: Cybersecurity; SMEs; Merit-good; Pakistan; Market Failure; Sustainable Development Goals; Qualitative Management Framework; Cyber Policy.