The report highlights three main messages:
- Economies facing the most critical need to create more and better jobs are the least business ready. Young workforce economies, which are expected to face a significant influx of new workforce entrants, generally lack the supportive business environment necessary to deal with this surge.
Low-growth young workforce economies are falling furthest behind. Almost all economies in the young workforce demographic group have average B-READY pillar scores that are below the global median. Critically, the gap widens depending on the growth setting: high-growth economies are closer to the median, but medium-growth—and especially low-growth—economies lag much further behind. Low-growth young workforce economies are the most vulnerable, consistently posting the lowest scores across all pillars. Sub-Saharan Africa is home to most young workforce economies, making the region especially exposed to the risks associated with a challenging business environment. Notably, B-READY scores are consistently lower in these economies than in other regions, reflecting more pronounced regulatory hurdles, inefficiencies, and constraints facing firms and the private sector. Reforms in the business environment are needed to address the challenge of generating more and better jobs. - Economies find it harder to provide public services that support businesses than to enact laws and rules to regulate them—resulting in a persistent “public services gap.” There is a notable difference between the Regulatory Framework (Pillar I) and Public Services (Pillar II) scores across all regional and income groups, indicating that regulations are often implemented without the necessary public services to support them.
The public services gap is 2.8 times wider in young workforce economies than in mature economies. This gap may make it more challenging for firms to navigate regulations and access services efficiently, limiting the responsiveness of the private sector to job creation demands. Investing in digital infrastructure, modernizing government services, and making information more accessible can close this gap and support business growth. - The ease of regulatory compliance and effective use of public services by firms are critical for growth, yet they lag behind regulatory strength—resulting in an “efficiency gap.” This efficiency gap, defined as the difference between average scores on the Regulatory Framework pillar (Pillar I) and Operational Efficiency pillar (Pillar III), is observed, on average, across all economies. There is often a mismatch between rules and how easy they are to follow. This gap reflects government inefficiencies that hinder firms’ ability to fully benefit from strong regulations. Addressing it requires holistic measures to strengthen institutional capacity for the effective operationalization of the rules on the books.
Performance in the Operational Efficiency pillar tends to be higher in economies experiencing high growth, with gaps across growth groups most pronounced among those with a young workforce. Firms in low-growth economies face significantly more constraints and barriers than their counterparts in high-growth settings. While this association does not imply direct causation, it raises concernsfor job creation: in low-growth contexts, these constraints hinder business activity and limit opportunities for generating more and better jobs. Easing such barriers may not instantly transform an economy, but it can help kickstart private sector development and set the stage for growth. Streamlining processes and digitalizing services, supported by necessary communication campaigns and training activities, can boost efficiency. Making it easier for businesses to comply with regulations and access services helps them grow and create jobs.
By tackling these challenges, economies can unlock growth fueled by the private sector, helping all segments of the population access more and better jobs.
