This post is coauthored with Francisco Campos
This post is coauthored with Francisco Campos
A bat and a ball cost Rs. 1100 in total. The bat costs Rs. 1000 more than the ball. How much does the ball cost? A culturally appropriate GRE? No, this question comes from the cognitive portion of a test designed to measure entrepreneurship in Sri Lanka.
The potentially deleterious effects of gender disparities on growth and poverty reduction have been receiving progressively more policy attention (reflected, for instance, in the inclusion of the promotion of gender parity amongst the Millennium Development Goals and the 2012 World Development Report). Inequities in labor market opportunities are of particular concern since labor earnings are the most important source of income for the poor in the vast majority of developing countries.
Although the vast majority of the poor live in rural areas and rural non-farm enterprises account for about 35-50% of rural income and roughly a third of rural employment in developing countries, relatively little is known about gender inequities in rural non-agricultural labor market outcomes due to data-limitations. This is unfortunate given the proliferation and diversification of rural non-farm activities and their potential to alleviate poverty, especially in countries where the importance of agriculture as an employer is likely to diminish.
Sarathbabu Elumalai is the founder and Chief Executive Officer of Food King, a food catering business in Chennai, India, with about 300 employees. He grew up in a slum but went on to get a masters degree from the Indian Institute of Management-Ahmedabad and then started the company in 2006 with only $40 in capital. He was honored for his entrepreneurship and leadership skills at the World Bank’s 2012 Global Youth Conference in March. He spoke with us about the challenges of launching a company and the critical need for information and access to finance.
Read this post in Bahasa.
Ambitious and fast rising—these words aptly describe modern Indonesia. Amidst a global economic slowdown, Indonesia was the third fastest growing economy among the G-20 for 2009 and it continues to post strong economic growth, at a projected rate of 6.4% for 2012. Improving economic competitiveness by creating a more salutary business climate is one of Indonesia’s national priorities for 2010 to 2014.
Indonesia is walking the talk. Doing Business in Indonesia 2012 launched January 31 in Jakarta, finds that all 14 cities previously measured in Doing Business in Indonesia 2010 have improved business registration processes over the last two years, while 10 out of 14 cities expedited the approval of construction permits. During his keynote address on the launching of the report, the Minister of State Ministry for Administrative Reforms talked about the cities moving from 'comfort zone' to 'competitive zone'.
As reports of sluggish global job creation continue, some look to new firms as a source of net job creation (Haltiwanger, 2011). But the lead article of this month’s Economics Letters, citing panel data from 93 countries, shows that most countries experienced a sharp drop in new firm registration during the financial crisis. As discussed in an earlier blog, relatively larger contractions are seen in countries with more developed financial markets and where entrepreneurs depend more on banks for start-up capital.
Can social entrepreneurs forge a more productive collaboration with corporations that yield development and business benefits? Bill Drayton and Valeria Budinich suggest that they can, as detailed in their article in Harvard Business Review. They introduce the concept of hybrid value chains (HVCs) based around four key criteria – that they create real economic as well as social value, have the potential to go to scale across borders, are profitable and hence sustainable, and offer a basis for new competition.
The subject of innovation is slowly but surely on the rise; as nations realizing the steady shift from resource to the inevitable knowledge based global economy demand high speed innovation to stay ahead of the competition. From Japan to Colombia, Washington DC to Bulawayo - politicians are emphasizing retooling education for innovation.
These days, job creation is a top priority for policymakers. What role do small and medium enterprises (SMEs) play in employment generation and economic recovery? Multi-billion dollar aid portfolios across countries are directed at fostering the growth of SMEs. However, there is little systematic research or data informing the various policies in support of SMEs, especially in developing countries. Moreover, the empirical evidence on the firm-size growth relationship has been mixed. Recent work of Haltiwanger, Jarmin, and Miranda (2010) in the U.S., suggests that (1) Startups and surviving young businesses are critical for job creation and contribute disproportionately to net growth and (2) There is no systematic relationship between firm size and growth after controlling for firm age. It is not clear whether these findings apply in developing countries where there are greater barriers to entrepreneurship, and where venture capital markets that finance young firms are not as well developed as in the US.
In a recent paper Meghana Ayyagari, Vojislav Maksimovic and I put together a database that presents consistent and comparable information on the contribution of SMEs and young firms to total employment, job creation, and growth across 99 developing economies. Our sample consists of 47,745 firms surveyed in the period 2006-2010. We then examine the relationship between firm size, age, employment, and productivity growth and how this varies with country income and find the following: