There is Global Agreement on the Top Economic Priority – But What to Do About It?

Researchers for Pew’s Global Attitudes survey have spoken to 37,000 people in more than 40 countries about their opinions on current economic challenges and the best policies to tackle them. One thing almost everyone agreed on: the most important economic priority around the world, in developing, emerging, and advanced economies, is jobs.

This is not an easy problem to solve. In developing countries, the traditional solution to unemployment is to create more government jobs, while almost everyone else gets by on subsistence agriculture, day labor, or informal economic activity of one kind or another. But between meager tax revenues and the growing unwillingness of international donors to finance bloated government payrolls and inefficient state-owned enterprises, this government-led strategy is becoming increasingly difficult for poor countries to pursue.

To accommodate the more than one billion young people who live in developing countries, as well as the millions of all ages thrown out of work during the financial crisis, the private sector needs to start creating a lot more jobs. At least 40 million new jobs are needed per year worldwide, according to the ILO, just to keep pace with the growth of the labor force. This is not a problem that governments in any country can solve on their own.

In developing countries, one of the best ways to get the engine of job creation going is by promoting entrepreneurship – and removing the legal, regulatory, and institutional barriers that prevent successful entrepreneurs from growing their businesses and employing others.

Look around any city or town in the developing world and you will see entrepreneurs everywhere: taxi drivers, market vendors, and micro-manufacturers. But most of these people are “necessity entrepreneurs,” forced into self-employment due to the dearth of job prospects in the formal economy. Those that have the right skills, resources, and drive to really scale up their business and employ others are often stymied by corruption, badly designed regulations, weak legal institutions, poor access to finance, or lack of formal titles to their property.

Solving the world’s number one economic challenge will not be easy, but getting the private sector involved is a positive start.

Jon Custer is the Communications & Social Media Coordinator at CIPE.