The first World Bank Competitive Industries conference on “Making Growth Happen” is just two weeks away. There’s been a thrilling addition to the impressive roster of speakers: A Nobel Prize-winning economist, Professor Joseph Stiglitz of Columbia University, has agreed to deliver one of the keynote addresses on Wednesday, October 16.
What makes this particularly exciting is that Stiglitz – a former Chief Economist of the World Bank – will talk to us not only about his prior work, but will be giving us a taste of what’s coming next. His forthcoming book, co-authored with Bruce Greenwald, “Creating a Learning Society: A New Approach to Growth, Development, and Social Progress," promises to hold a wide range of policy implications.
In anticipation of the talk, and judging by his analyses on his website, I thought I’d share some of my reflections on this theme in Stiglitz’s work and on its relevance for us – as well as some questions that I hope we will tackle during the conference.
After a long job search, you are rewarded by the phone call all job seekers wait patiently for, the interview invitation. You prep and spend as much time on the outfit you plan to wear as you do practicing mock interviews with your friends. You get to the interview all prepared to discuss your semester abroad as a graduate student, your thesis that took you to Congo and extensive work experience that landed you coveted past jobs. Your prospective employer will be as interested in your past work experience as in your formal education or schooling. The quality and the quantity (number of years) of relevant experience could drop you out of the race all together or…land you the job, determine your pay bracket and impact your future career growth.
Is a solid education enough to level the gender gap in human capital? (Credit: World Bank)
The future will be won or lost in the world’s cities. With half of humanity now living in cities – and with the breakneck pace of urbanization likely to concentrate two-thirds of the world’s population into metropolitan regions by 2050 – getting urbanization right is the over-arching challenge of this globalizing age.
Urban policy is now at the top of the news due to the bankruptcy filing of forlorn Detroit, which has long been a symbol of urban decay. Yet the urbanization drama goes far beyond the de-industrializing North: The destiny of cities worldwide will determine the success or failure of virtually every development priority – and it will be especially vital for job creation, innovation and productivity growth, environmental sustainability and social inclusion.
Growth poles can help create jobs for Africa's one billion citizens (Credit: World Bank)
We were asked the other day by our senior management to be outrageously aspirational when we engage with growth poles. I have been reflecting on what this means for our work on this topic in Africa, especially in light of the findings of the Africa Competitiveness Report. I think we need to be aspirational in three broad directions: (i) developing the capacity to get things done in Africa, (ii) ensuring all stakeholders benefit from growth, and (iii) mobilizing as much capital as we can, whether it be private, philanthropic or public.
How can countries create 600 million jobs for its citizens?
As the World Bank convenes its Spring Meetings in Washington this week to discuss the state of international development, the question on everyone’s mind is: How to restart growth and create jobs?
Job creation on an unprecedented scale is needed to avoid severe social dislocation: About 22 million jobs were lost worldwide during the global financial crisis – at a time when many developing countries face an explosion in their working-age population. According to the Bank’s “World Development Report 2013,” 600 million jobs need to be created in the next 15 years just to maintain current employment rates.
The surest way to empower women, close the gender gap, and ensure women’s participation in the development of their economy is through enabling equal job opportunities and employment for women. Recent efforts such as the Women, Business and the Law (WBL) project show that labor laws do vary between men and women. As we will see in three studies below, the law has an incredibly significant role in understanding female employment.
Eliminating gender disparity in laws leads to higher levels of female employment
The first study finds that gender disparity in the laws favoring males over females tends to lower the employment level of females relative to males, a result driven by employment in small and medium firms. The study uses a broad measure of gender discrimination in laws across 66 developing countries using the World Bank Group projects: WBL data and the Enterprise Surveys data to measure female employment in the private sector.
As David Francis pointed out in a recent blog, the private sector in Latin America and the Caribbean (LAC) region showed some resilience to the heavy distortions of the recent financial crisis. Latin America’s market economy is working in a way where more productive businesses are able to survive, while less productive firms are exiting the market.
But how does this fit into the larger picture of the region’s private sector?
A partial answer to this question is that the region’s private sector is adding jobs. Especially in a period where the developed world faced severe challenges on job creation, the region succeeded in creating new jobs by almost five percent in both manufacturing and service sectors. This trend is widespread: service sector firms in all countries – as we covered in a recent note on firm performance – added jobs. And in only 5 of the region’s countries did manufacturers decrease the number of employees on their books.
The enormity of the global job-creation challenge is underscored in a comprehensive new analysis by the International Finance Corporation, which issued a wide-ranging Jobs Study at a recent IFC forum on the urgency of the unemployment crisis. More than 200 million people are now unemployed worldwide – with another 1.5 billion people only marginally employed, and with an additional 2 billion working-age adults neither working nor seeking a job.
The need for stronger and more sustainable job creation will intensify with the approach of a global demographic surge. More than 600 million people will enter the work force – just in the developing world – within the next 15 years. And that figure, quantifying the painful withering of human capital caused by the unemployment crisis doesn’t even count the job-growth needs in the crisis-stricken wealthy nations.
In light of recent political and social unrest in the region, foreign investors are taking a “wait-and-see” attitude to projects in the Middle East and North Africa. For the region’s investment promoters, this demands better, more proactive performance than in the past. Fortunately, although much remains to be done, the investment agencies of the 19 MENA governments are, as a group, off to a good start, according to a World Bank Group report released today.
Global Investment Promotion Best Practices 2012: Seizing the Potential for Better Investment Facilitation in the MENA Region reports on the ability of investment-promoting institutions (IPIs) in 189 countries to handle investor inquiries and provide investors with quality business information through their Web sites. It shows that the MENA region was the only one in the world to achieve significant improvement since the last edition of GIPB in 2009, with the IPIs of Morocco and Yemen among the world's three most improved.
Like every other development institution, The World Bank Group's International Finance Corporation (IFC) is deeply concerned with how to create more and better jobs. There’s no question that jobs are the key issue in any discussion about ending poverty. The 60,000 poor people who participated in Deepa Narayan's Voices of the Poor study 13 years ago were right—jobs are the surest way out of poverty for people across the world.
Today, IFC publishes a report on the findings of a study about how jobs are created by the private sector. Given the private sector provides 90 per cent of jobs, the estimated 600 million that need to be created by 2020 will inevitably have to come from the private sector.