For most people in developing countries, a job is the most certain way out of poverty. By 2020, the world will need to create 600 million jobs just to keep up with population growth. These jobs must be good jobs—because job growth alone isn't enough to catalyze development.
That’s because far too many jobs in developing countries today are in the informal sector—where workers struggle with fewer rights, hazardous working conditions, and low wages. Informal jobs are closely correlated with poverty.
IFC believes the private sector—which accounts for nine out of every 10 jobs—is critical to creating more and better jobs. As the world’s largest global development institution focused on the private sector, we work with private businesses in more than 100 countries to foster the right kind of job growth.
We work to ensure that jobs are created for both men and women – including youth—and that these jobs are sustainable, productive, offer fair pay, higher wages, good working conditions, and provide opportunities to advance. In 2012, our clients directly supported nearly 3 million jobs.
We also worked with financial institutions to increase lending to micro, small, and medium enterprises—which, in turn employed more than 100 million people. But direct jobs are only a small part of the story. For example, IFC estimates that across value chains, every direct job may lead to as many as 20 indirect jobs.
IFC also plays a leading role in helping businesses and governments identify ways to strengthen employment. Last year, we conducted a study—with the support of our donor partners—that identified four key obstacles to job creation: inadequate infrastructure, limited access to finance, weak investment climate, and insufficient skills and training.
Encouraged by our findings, nearly 30 international finance institutions pledged to work with us to spur job creation. Together, we launched the Let’s Work global partnership, which aims to work with policymakers, private sector companies, and development practitioners to remove the main constraints to job creation.
Throughout the next three years, Let’s Work will carry out country pilots, generate new methods, and share best practice knowledge to create more and better jobs.