Michelitsch, R. 2014. Creating more and better jobs: The defining issue of our time. GREAT Insights, Volume 3, Issue 2. February 2014.
Hundreds of millions of people do not have jobs today and several hundred millions more will seek jobs by 2020. Most of these unemployed are under the age of 25 and live in developing countries. Whether these young people find jobs affects global security and well-being.
Seeking solutions to global unemployment is an urgent and pressing development issue. Studies have shown that jobs are the most important pathway out of poverty.
However, it is not just about the quantity of jobs produced. At the World Bank Group, working with our partners in development, we are also particularly concerned about creating quality jobs; these are ‘good’ jobs that are sustainable, offer fair pay, have good working conditions and provide opportunities for employees to advance. We also support quality jobs that provide opportunities for groups that are often marginalised – women, youth, the long-term unemployed and the poor.
The World Bank Group is implementing an ambitious strategy to help us achieve our two development goals: ending extreme poverty by 2030 and boosting shared prosperity for the bottom 40%. Central to achieving these goals is how we can support the creation of more and better jobs. We know that the private sector – which provides 90% of the jobs in emerging markets and the majority of jobs in advanced countries – offers the only sustainable solution to global unemployment. The public sector also has an important role in creating a business environment in which the private sector can grow and thrive, as well as providing important social safety nets for the poor.
Job growth in emerging markets is essential for global demand, but as we have learned through the study ‘Assessing Private Sector Contributions to Job Creation and Poverty Reducation’ (1) published last year by the International Finance Corporation (IFC), the private sector arm of the World Bank Group, too many obstacles keep private companies from growing. Removing these obstacles can significantly increase job growth.
Key factors for job creation
Some of the key findings of the IFC Jobs Study are:
What the World Bank Group is doing to foster more and better jobs
When we launched the Jobs Study, twenty-seven international financial institutions (IFIs) signed a communique pledging to work with IFC on private sector job creation. This was in addition to efforts across the World Bank Group to collaborate on jobs to leverage our collective strengths.
Since that time, the World Bank Group has continued to strengthen its focus on jobs. Instrumental to the success of our strategy is the establishment of Global Practices and Cross-Cutting Solution Areas, which will bring all technical staff together, making it possible for us to expand our knowledge and better connect global and local expertise for transformational impact. Job creation is central in all this and we are now putting in place a cross-cutting solution area on jobs, which will help provide seamless assistance to countries and companies seeking to create more and better jobs.
Another key action to multiply our impact on job creation is working with other international financial institutions, the private sector, donors and other key players, like the International Labour Organization (ILO). Unemployment is too big and important an issue for one development institution to tackle alone. We will achieve the fastest and most sustainable results by working with other partners, than we would working separately and in parallel. To this end, IFC is coordinating a global partnership to create more and better jobs called Let’s Work (2).
Building on the findings of the Jobs Study and the experiences of our partners, Let’s Work will address the needs of various companies, sectors and countries on this pressing issue. Let’s Work will help further improve knowledge and develop practical approaches to tackle the jobs agenda that would serve as a public good for the development community.
Roland Michelitsch is Global Head of the Let’s Work partnership at International Finance Corporation (IFC).