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Private Sector Development

Korea: A model for development of the water and sanitation sector

Alexander Danilenko's picture
Cheonggyecheon Stream, Seoul, Korea 
Photo: Mark Pegrum

Can a sustainable water sector be developed simultaneously with a country’s growth? Can the water sector continue to expand and achieve comprehensive coverage and financial sustainability goals to become a recognized global model for water sector management and performance? Can a country without a single sewer line in 1958 have 90 percent of its wastewater treated by 2012?

The answer is yes! The example is Korea.

Easy business exit is as important as easy business entry

Simon Bell's picture



How to identify and support fast-growing firms that can take off, create jobs, and yield significant value in a short period of time is one of our biggest dilemmas in nurturing private sector development in emerging markets. 
 
The Sustainable Development Goals (#8) include the need for decent jobs as an important developmental priority, and small and medium size enterprises (SMEs) are expected to create most jobs required to absorb the growing global workforce.
 
But many young firms will fail; by some accounts more than half of new firms won’t make it to their second birthday. 
 
However, despite the high rate of firm failure, research from the US and evidence from India, Morocco, Lebanon, Canada and Europe shows that it’s largely young firms that create the bulk of net new jobs (net jobs are jobs created minus jobs lost) and lasting employment opportunities.
 
In addition, even when a firm survives beyond the first two years of operation, there are no assurances it will become a fast-growing firm -- a gazelle. 
 
Although estimates vary widely, the share of gazelles -- fast-growing firms that generate a lot of value-added and jobs -- is thought to be only between 4% to 6% of all SMEs, and, possibly, even less in many emerging countries.
 
All this makes creating favorable conditions for entrepreneurship a priority. 
 
Easing business entry -- the time and cost involved in establishing a new enterprise -- is extremely important.  As the annual Doing Business report shows, many countries have made a lot of progress on this indicator over the past decade.  
 
But business exit is an equally critical piece of the puzzle.

Chart: Where is Gender Discrimination in Business Regulated?

Tariq Khokhar's picture

60% of economies do not have laws mandating gender nondiscrimination in hiring and equal remuneration. Such laws are more common in OECD high-income economies, followed by economies in Europe and Central Asia. Gender equality can make institutions more representative, improve social cohesion and increase productivity.

How are future blue-collar skills being created?

Victor Mulas's picture



A technology bootcamp in Medellín, Colombia. © Corporación Ruta N Medellín/World Bank


The fourth industrial revolution is disrupting business models and transforming employment. It is estimated that 65 percent of children entering primary school today will, in the future, be working in new job types that do not exist today. These changes have been more noticeable in developed countries, with the 2008 financial crisis accelerating this transformation process. However, they are also affecting emerging economies that have traditionally relied on routine blue-collar jobs (e.g., textiles, manufacturing or business process outsourcing) for broad employment and economic development.

Start-ups are at the core of these disruptions in business models. In recent years, we have witnessed how completely new market categories have been created out of the blue, transforming entire sectors of the economy, including transportation, logistics, hospitality, and manufacturing. When start-ups disrupt a market, a new business category is created and new sources of growth and employment are generated.

When we think about start-ups and employment, the first thing that come to mind is the start-up founders, typically highly educated and motivated individuals. However, evidence from New York startup ecosystem, a testing ground of new jobs generated through technology after the financial crisis, suggests otherwise.

First, most of the jobs generated by the tech start-up ecosystem are not in start-ups but in the traditional industries that either are influenced or disrupted by start-up technologies (with over three times more employment generated in the non-tech traditional industry).

Second, more than 40 percent of these new jobs did not require bachelor’s degree skills or above. These are jobs like building a website, a basic database, a web or mobile app.

What are the skills needed to fill these categories — which we can call tech blue-collar skill jobs — and how people are being trained for them?

Do PPPs have a future?

David Baxter's picture


Photo Credit: Thomas Hawk via Flickr Creative Commons

In September, a whirlwind of meetings took place with agencies and development banks in Washington, D.C., and Europe that were focused on the current and future implementation of public-private partnerships (PPPs) across the global market. The healthy debate on the topic exposed the participants to interesting insights provided by proponents and naysayers of PPPs.
 
Many PPP experts that I met shared ideas on the changing context of PPPs and how these changes will impact the implementation of PPPs across regions and sectors in the near and far future. All agreed that the long-term consequences of future political, economic and societal changes are particularly difficult to predict.

The silent ‘change agents’ in government

Syed Akhtar Mahmood's picture

Sometimes, the drive comes from the senior echelons of government – a reform-minded government leader, an important minister or an agency head. At times, there is pressure from donors. Often, the two combine: The initial idea comes from a donor, which a powerful person in government then takes up as an agenda.

Many reforms happen in this top-down way. But, often, there are questions about their sustainability. Commitment to reforms may not be widespread. Once donor pressure wears off, or once the bold reformer at the top moves on (or loses interest or energy), reform initiatives dissipate. Sometimes, the reforms happen on paper, but implementation remains deficient. Top-down reform initiatives often fail to take on board the front-line officials. Implementation thus suffers, especially when the attention of the top-down driver shifts elsewhere.

The 2015 World Development Report, Mind, Society and Behavior, thus points to the need to understand the motivations and behavioral characteristics of different players, such as politicians and government bureaucrats, and how these affect their decisions and actions. The WDR argues that such an understanding helps design policy interventions and reforms that stand a chance of success even in seemingly intractable situations.

This brings us to a third way of reform, less common but potentially more powerful – one that is driven by the middle tiers of bureaucracy. Reforms initiated in the trenches enjoy, almost by definition, the commitment of those responsible for implementation. Reforms may also be better designed, since the officials know exactly what is feasible and where there are pitfalls. A single bottom-up reform may not be very bold.  But one reform may lead to another, and the cumulative impact may make a big difference.

Donor programs usually don’t regard mid-level officials as key drivers of reforms. It is often assumed that such officials will oppose reforms and they should thus be bypassed or, at best, co-opted in some fashion. Such assumptions lead to many lost opportunities. Mid-level officials can often be good initiators of reform if they are properly inspired and engaged. The attitudes and perceptions of this important tier of the bureaucracy have an important bearing on the formulation of policies and regulations, as well as on their implementation. These attitudes are shaped by an awareness of business-related issues, or a lack of it.

Competitive cities for jobs, growth, poverty reduction and shared prosperity?

Soraya Goga's picture
Photo by ecuadorpostales via Shutterstock

We are all aware of the statistics: cities are home to more than 50% of the world’s population, and they are growing so fast that 66 out of 100 people on earth will be urban dwellers by 2050. This, of course, will have major implications for people and poverty, climate change, and service delivery.
 
But did you also know that cities are the key drivers of global and national economic growth?
 
Currently, cities generate more than 80% of global GDP. Since the early 2000s, three-quarters of the world’s 750 largest cities have grown faster than their national economies. One of the key reasons for those cities’ success is higher productivity—as a result of their ability to attract skilled workers—as well as a high concentration of productive entrepreneurs and firms.
 
For decades, national and city leaders have also taken actions to build competitive cities, increasingly facilitating firms and industries to create jobs, raise productivity, and increase incomes over time—especially for the urban poor. They see this as the pathway to eliminate extreme poverty and to promote shared prosperity. This is particularly important in Sub-Saharan Africa and South Asia, where most of the world’s extreme poor live.

“Teach a man to fish…” - Sustainable Solutions in Afghanistan’s Rural Economies

Mohammad Shafi Rahimi's picture
An Afghan woman uses her skills to make artificial flowers for sell. Photo Credit: Rumi Consultancy/ World Bank.

Earlier this year, I visited a meeting of a Village Savings and Loan Association in Doghabad village and was impressed with the confidence and leadership women showed. Addressing the association, Karimi, who is a member, said: “Do not wait for men to come and decide for you, be the makers of your own community.” She encouraged women to take an active role in the association’s weekly meetings, and come prepared with business proposals and requests for loans. Like Karimi, numerous individuals who have participated in the Afghanistan Enterprise Development Program (AREDP) programs act as inspirational leaders in mobilizing people and gaining trust in the program.

It’s possible to end poverty in South Asia

Annette Dixon's picture



October 17 is the international day to end poverty. There has been much progress toward this important milestone: the World Bank Group’s latest numbers show that since 1990 nearly 1.1 billion people have escaped extreme poverty. Between 2012 and 2013 alone, around 100 million people moved out of extreme poverty. That’s around a quarter of a million people every day. This is cause for optimism.
 
But extreme poverty and the wrenching circumstances that accompany it persist. Half the world's extreme poor now live in sub-Saharan Africa, and another third live in South Asia. Worldwide nearly 800 million people were still living on less than $1.90 a day in 2013, the latest year for which we have global numbers. Half of these are children. Most have nearly no education. Many of the world's poor are living in fragile and conflict afflicted countries. In a world in which so many have so much, it is unacceptable that so many have so little. 

Is there a connection between PPPs, climate change, and life insurance? Turns out there is.

David Lawrence's picture


Photo Credit: United Nations

Public-private partnerships fit well into many sectors and industries, most obviously infrastructure and social services. But I never connected PPPs to the life insurance sector until I read a recent online interview with Andreas Gruber, the Chief Investment Officer of Allianz, a German insurance and asset management company. In the interview, Gruber gives a lucid assessment of PPPs and why they are important to Allianz.


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