While employment creation in developing countries is high on the agenda of most donor agencies, there are different views on how to achieve it. Key insights include:
- In the medium term, labour-intensive light manufacturing industries, supported by a conducive investment climate, can deliver productive jobs for low-skilled workers at scale. This potential may change in the age of automation, with more opportunities emerging in service sectors.
- SMEs contribute a large share of employment in developing countries; however, as many fail, their net job creation rate is likely similar to large firms. Job creation efforts should target SMEs that grow.
- Increasing productivity and incomes of the many people in traditional agriculture also needs to remain a short-term priority.
For more specific resources on labour markets and employment in light of the COVID-19 pandemic, please refer to the DCED knowledge page on Socioeconomic impacts and national responses.
Photo credits: © ILO / Mirza A.