Entrepreneurs and Small Businesses Spur Economic Growth and Create Jobs

WASHINGTON, June 20, 2016—Achieving the World Bank Group’s twin goals of ending extreme poverty and boosting shared prosperity will require unprecedented efforts by developing countries to unleash private sector-led growth. Reaffirming its commitment to supporting entrepreneurship as a key driver of growth and development, the World Bank Group will participate in this year’s Global Entrepreneurship Summit in Silicon Valley, an annual event hosted by U.S. President Barak Obama and attended by over 700 entrepreneurs from 170 countries around the world.

A central theme of the summit is the critical role played by startups and small businesses in creating jobs and spurring economic growth. Small and medium enterprises (SMEs) represent the vast majority of the business population in low-income countries (excluding micro firms and the self-employed). According to a recent study from the International Finance Corporation (IFC), SMEs account for more than half of all formal jobs worldwide, and their share of aggregate employment is comparable to that of large firms.

The economic opportunities linked to SMEs are also significant: ICT and mobile technology sectors are growing rapidly in developing countries, while in the clean-technology space SMEs can tap into a market estimated to reach USD1.6 trillion over the next decade.

The Role of Small and Medium Enterprises in Development

In addition to being drivers of local growth and job creation, SMEs play an increasingly important role in addressing urgent development challenges, in particular those related to sustainability and service delivery.

As President Barack Obama said when opening last year’s Global Entrepreneurship Summit in Kenya, “Entrepreneurship creates new jobs and new businesses, new ways to deliver basic services, new ways of seeing the world—it’s the spark of prosperity.”

Recognizing the crucial role of SMEs for development, the Bank Group, through the Trade & Competitiveness Global Practice’s Innovation & Entrepreneurship Unit, focuses on building the capacity of promising companies in high-growth sectors like agribusiness, ICT, and clean technology. A global network of business incubation centers—Climate Innovation Centers, Agribusiness Entrepreneurship Centers, and Mobile Application Laboratories (mLabs)—has also been established to support emerging entrepreneurs at each step of their journey by providing early-stage financing, technical training, and market intelligence.

Meet the Entrepreneurs

Entrepreneurs with business ideas that have the potential to transform local communities will take center stage at the Summit. From disaster relief to education and farmer incomes, their innovations can have far-reaching results.

Take Farmerline, for example. The income of small-scale farmers is dependent upon a number of shifting factors, like variable market prices, weather, and evolving farming techniques. Emmanuel Owusu Addai co-founded the mobile app Farmerline to provide this data to smallholder farmers across Africa. Since its 2013 launch, Farmerline has helped increase harvests and incomes for more than 200,000 farmers in four countries. Addai previously participated in the World Bank’s Mobile Startup Camp, a weeklong program for entrepreneurs to refine their product strategies, business models, and marketing pitches.

In Jamaica, Nichole Crawford co-founded Niritech to prepare students for more competitive jobs in the Caribbean region. Recognizing weaknesses and digital literacy gaps in local secondary schools, Crawford designed Niritech to offer online study resources and exam preparation at affordable prices. Crawford participated in the Slush Global Impact Accelerator, a joint program of the World Bank Group and Finland, and will speak about her company at the Summit.

A Growing Momentum

Given the economic and development benefits of fast-growing and high-impact companies like Farmerline and Niritech, support for small and medium enterprises has emerged as a top priority in the global agenda. This focus on SMEs is reflected in the establishment of the World SME Forum (WSF) in 2015. Similarly, the Addis Ababa Financing for Development Action Agenda emphasizes the importance of affordable access to finance for SMEs, as well as adequate skills development training for entrepreneurs, while the World Trade Organization is promoting initiatives to ensure that trade facilitation measures do not restrict SME participation in global trade.

“International initiatives like the Global Entrepreneurship Summit and institutions like the World Bank Group will continue to play critical roles in identifying innovative approaches for supporting young, growth-oriented, and technology-enabled entrepreneurs,” said Ganesh Rasagam, Innovation and Entrepreneurship Practice Manager in the Bank Group’s Trade & Competitiveness Global Practice. “They are the backbone of local economies, and, by providing new solutions to old development issues, they can also be important drivers of sustainable and inclusive growth.”