EMERGING MARKET INSIGHTS - Which Firms Create More Jobs?
Identifying which firms hire, where, and why is essential for delivering opportunity to tomorrow’s workforce in developing economies. While predicting which firms will create the most jobs and better jobs is challenging, research provides valuable insights on the attributes of firms with the greatest employment potential.
Five themes consistently surface from the evidence:
A small number of firms accounts for a disproportionate share of new jobs.
The most dynamic employers tend to be relatively young, and their chances of success are generally unrelated to initial size.
Businesses tend to flourish in well-connected locations.
They accelerate when plugged into value chains, multinationals, or sophisticated suppliers.
Stronger management skills and technology adoption underpin their success.
These facts together point to practical, actionable ways of channeling private capital into large-scale employment, underscoring a potentially strategic role for policies to support firms.
Across a range of sectors, a narrow group of businesses creates up to two-thirds of all new jobs.
