Competitiveness

Over the next decade, 1.2 billion young people in emerging and developing economies will become working-age adults, making job creation an urgent priority. Competitive countries—those with transparent and predictable regulations, skilled labor, stable financial systems and potential for development of local suppliers to global companies—have the edge in attracting investment. Those with competitive, efficient markets can foster economic growth, create jobs, and drive productivity gains which can lead to higher incomes and lower poverty.

Growth by itself is not enough. Patterns of growth and trends in income inequality also matter in reducing poverty. In countries afflicted by slow growth and pervasive poverty, for instance, poverty declines when growth becomes more labor intensive and when the work of people living in poverty becomes more productive. Incomes rise when employment shifts from informal to formal arrangements.

Achieving the Bank’s goal of ending poverty will require developing countries to expand market opportunities, attract private investment, and develop the private sector. Governments cannot do it alone. They ensure economy-wide incentives for broad-based growth, and make it easier for firms—new and established—to do business. The private sector in lower- and middle-income countries and in fragile and conflict-affected states will need to be more dynamic in identifying opportunities, competing and innovating, and creating jobs. Governments and the private sector can invest in human capital.

Important policy and institutional underpinnings for efficient markets include open trade regimes, competition, favorable investment climates, and capacity for innovation. These promote integration with global value chains (GVCs), increase investment volumes and returns, lower business costs, and encourage formation of new businesses.

The World Bank Group’s work on competitiveness focuses on three areas: private investment and firm growth; business climate and regulatory risk; and competition policy and State-Owned Enterprises (SOEs). We work with countries to help strengthen innovation policies, strategies, and financing with the goal of strengthening entrepreneurship and small businesses, especially for youth and women. We help governments adopt policies to improve predictability and transparency for investors.

We work with governments to implement market regulations to support competition and maintain anti-trust enforcement. We advise them in State-Owned Enterprise (SOE) reform and restructuring to improve private-sector participation in the economy.

Competitiveness for Jobs and Economic Transformation (C-JET) is a new global partnership facility that helps foster the economic transformation needed to enable better jobs for more people, sustainably and at scale. The Umbrella 2.0 trust fund program will focus on the enabling conditions and programs that promote the entry and growth of competitive firms and sectors as drivers of better jobs.

External Affairs Contact

Paul Clare
pclare@worldbankgroup.org