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.