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The Economic Cost of Gender Inequality

Katrin Schulz's picture


Madame Ngetsi of the Democratic Republic of the Congo
is one of thousands of women in the world who—despite their talent, drive, and potential to contribute to the economic development of their countries—may never be able to fulfill their dreams of starting their own businesses. Their dreams may be dashed because of outdated legislation that reproduces debilitating gender roles. 

If she were a man in the DRC, Madame Ngetsi’s initial steps in starting her business would be to obtain a certificate confirming the headquarters location, notarize the articles of association, and register with the Commercial Registry.  As a woman, however, a significant roadblock stands in her way:  She is legally mandated to first obtain her husband’s permission to register a business.  This legal requirement, found in the family code rather than in any commercial or business code, is fully in effect in the DRC.  Permission letters are readily found on file at women-owned company registries.  Married men face no such requirement.

Placing your bets: Subsistence or Transformational Entrepreneurship

Morten Seja's picture


The importance of dividing entrepreneurs into two distinct categories: transformational and subsistence was the topic of an inspiring talk of MIT Professor of Entrepreneurship and Finance, Antoinette Schoar at the World Bank. In crude terms, subsistence entrepreneurs are solely concerned about their survival,  and are tiny businesses and unlikely to grow or create new jobs. However, it needs to be said that they remain an important economic pillar, especially for developing countries. Contrarily, transformational entrepreneurs, the considerably smaller group of the two, strive for growth, are generally larger business owners, and provide relatively secure employment opportunities for others. They are the catalysts of innovation, job creation, productivity, and competitiveness.  This leads to a crucial question for development – should we target our policies towards entrepreneurs with transformational qualities even though they may not be the poorest of the poor since these are the ones that create more, sustainable and (often) productive employment?

Are you financially literate or financially capable?

Siegfried Zottel's picture


‘Imagine you have a lot of mangoes on your farm and your neighbor has lots of tomatoes. You make a bargain and he says he will give you three tomatoes for every mango you give him. If you give him fourteen mangoes, how many tomatoes do you expect him to give back to you?’

This question, amongst others, has been asked in the 2009 and 2011 Kenya FinAccess surveys. If you got the answer to this question right (see end of the blog for the correct answer), congratulations! It may be an indication that you are financially literate. Or would you rather be financially capable? ‘Financial Literacy’ and ‘Financial Capability’ are two terms many have heard about and usually they are used interchangeably. However, in a recent World Bank publication, which tries to ‘Make Sense of Financial Capability Surveys around the World’, the authors (Perotti, Zottel, Iarossi, and Bolaji-Adio) reviewed key approaches to measure financial literacy and capability. In doing so, they identified Financial Literacy to be often associated with financial knowledge.

When ‘Scandals’ Bring Good News

Ivana Rossi's picture

The very word “scandal” has a negative connotation. The dictionary definition says scandals are “associated with a disgraceful action or circumstance, or an offense caused by fault or misdeed” – and therefore, by definition, scandals damage someone’s reputation. No one wants to be involved in a scandal.

But: What if something good could actually come out of a scandal? Could some scandals become the source of good news?

When it comes to the disclosure of financial and business interests by public officials, the eruption of a scandal evidently can produce positive results.

From the United States in the 1970s to the recent scandals involving high-profile public figures in France, along with countless other examples worldwide, many high-profile scandals provide the impetus for the establishment or reform of disclosure systems. Initially, scandals push the issue of public officials’ integrity to the forefront of public debate. Discussions get heated up by colorful articles in the media about public officials’ wealth, both legitimate and illegitimate.

But, fortunately, some countries manage to keep their focus on the most important aspects of public officials’ financial misdeeds, without becoming distracted by breathless media gossip about the size of their bank accounts or vacation homes. Some countries take the opportunity to realize that an effective disclosure system requires the real attention.

Innovator-in-Chief: The Public Sector – Catalyst of Creativity

Christopher Colford's picture

Brace yourself for some dramatic new evidence about innovation and entrepreneurship – and and circle the dates October 16 and 17 on your calendar.

Propelling leading-edge ideas about competitiveness, Professor Mariana Mazzucato will be among the luminaries at a major conference at the World Bank in mid-October, organized by the Bank's global practice on Competitive Industries. An all-star array of policymakers, academics, business leaders and development practitioners will focus on today's top global economic-policy challenge: spurring growth and job creation.

Exploring “Making Growth Happen: Implementing Policies for Competitive Industries,” the conference in the Bank's Preston Auditorium will include Mazzucato among
some of the world’s foremost analysts of competitiveness. A professor at the University of Sussex in the U.K., Mazzucato’s iconoclastic new book  – “The Entrepreneurial State: Debunking Public vs. Private Sector Myths” – is now rocking the economics world. Mazzucato's insights are forcing a rethinking about the essential role of the public sector in driving the investments that are shaping the modern economy.
 
Public sector? Shaping the economy? Yes, you read that right: Mazzucato amasses persuasive evidence that the government-funded development and deployment of advanced technologies has been pivotal in changing the economic landscape.

Government’s role as a growth catalyst has been just as creative as the role of the private sector – and perhaps even more venturesome. Despite their buccaneering bravado, for-profit firms have lately shied away from high-stakes, high-risk investments in unproven technologies. Mazzucato refutes the defeatist dogma that claims, falsely, that public-sector investment can never do anything right.

The evolution of startup competitions: The case of Pivot East

Nicolas Friederici's picture


One of the winning 'startup' teams at Pivot East2013 (Credit: PivotEast)

Innovation competitions of all sorts have become prevalent throughout Africa, from hackathons to ideation challenges, demo days, code jams, bootcamps, roadshows, and pitch fests, the list is endless. This development is almost parallel to the rise of tech hubs (BongoHive counts about 100 African hubs) that have sprung up from Dakar to Dar Es Salaam.

While it’s evident that events and competitions are valuable opportunities—especially for young innovators looking to leave their mark—more advanced ecosystems, like Nairobi’s,  have already begun to show signs of competition fatigue and competition hopping.

It's not about us: Building competitiveness by breaking down walls

Ivan Rossignol's picture

Workers unchain girder from delivery truck
(Credit: WSDOT, Flickr Creative Commons)

Creating 100 million jobs in developing countries will require outrageous ambition, as I discussed in my blog post in April about the Competitive Industries Practice’s work with our clients. Since then, the world’s jobs challenge has become no less severe. If anything, the outlook has worsened.

In India, where I’m based, the economic outlook has continued to deteriorate. Industrial output did not just stop growing in the last quarter: It shrank by about 1 percent. In the country with, by far, the largest number of new workers entering the global labor pool, the engine of job creation is not just stalled: It may be going in reverse. Across the developing world, including in East Asia, the last six months have seen growth slowdowns and setbacks in job creation. The slow recovery in the developed world is not reducing unemployment quickly enough, if at all.

So as we prepare to return from our summer vacations, this is a good time for World Bank staff to think about how to do things differently and how to take the lead in tackling the jobs crisis. What will it take for Competitive Industries to help our clients and counterparts deliver under these difficult circumstances?

It clearly can’t be done by the CI practice alone. Implementing solutions – fast – requires working across traditional sectors, at full speed.
 

Can cities be publicly traded?

Rana Amirtahmasebi's picture


The Charging Bull, a Wall Street symbol (Credit: Epyonmx, Flickr Creative Commons)

Apparently so.
 
The city of Nashville can now be bought and sold on the New York Stock Exchange.  Well, that is an overstatement.  More accurately, as of the opening bell on August 1st, the Nashville Area ETF (Exchange-Traded Fund) was listed on the New York Stock Exchange as NASH for about $25 a share. This is the first time that a city-based ETF has been developed.

Calling all mobile industry entrepreneurs

Maja Andjelkovic's picture


infoDev, a team within FPD, is committed to supporting promising entrepreneurs.

At infoDev, we’re fortunate to work with exciting technology startups in emerging and frontier markets every day. One of the questions we ask ourselves frequently is whether a startup team could achieve high-growth if it weren’t for the barriers they face that are specific to their local environments. These could include anything from a lack of experienced role-models and mentors, to inadequate early-stage financing, to challenging regulatory environments and the lack of an interconnected innovation ecosystem.
 

Global value chain suppliers are our connection to SMEs

Yara Salem's picture

 
SME connectors can boost the supply chains of apparel, and other industries (Credit: India Kangaroo, Flickr Creative Commons)

This is the second post in the “Supply Chain Junkie" series, which gives personal insights on supply chains- -the “new normal" of doing business that is currently being prioritized by IFC.

Fashion is about constant change and that holds true for the business strategies of apparel Global Value Chains (GVCs) in response to customer preferences and global developments. The global economic crisis has played a major role in the biggest changes to the operational model of these chains, forcing them to cut costs by further consolidating their operations through long-term strategic decisions on supplier countries and supplier firms.
 

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