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TGen building at night / dlritter via freeimages

An employers’ view on job creation

Brent H. Wilton | 06 May 2014

The private sector is the primary generator of sustainable employment, so governments need to work to ensure that the environment for growth is promoted and maintained.

How can we create more and better jobs? This question has been asked for many years, and more so lately in the wake of the 2008 financial crisis. It is easy to propose answers, but more difficult to turn these into practical realities. So what are the answers?

  1. Economic growth: without a growing economy, where economic activity is encouraged, businesses and jobs will not be created. It is the private sector that is the primary generator of sustainable employment, so governments need to work to ensure that the environment for growth is promoted and maintained.
  2. Reduced risks: entrepreneurs incur risk by starting a business, and employing workers. We need to ensure a regulatory environment that reduces the risk factors associated with taking on employees.
  3. Appropriate regulatory framework: doing business also incurs costs. If the bureaucratic burden is too onerous or inappropriate, then business and job creation will be hampered. The World Bank Doing Business Report is a great starting point in addressing that regulatory framework.
  4. Rule of law: Lack of respect for the law by individuals, government agencies and governments themselves, jeopardises sustainable economic growth and fosters informality in the economy. While informality may provide jobs, they are unlikely to be decent jobs.
  5. A culture of entrepreneurship: not everyone may want to start a business; we may not all have the aptitude for such an undertaking, but we need to support those that do. To increase jobs, there need to be more employers, more businesses prepared to become economic actors. Education in entrepreneurship is vital to achieve this.
  6. Access to business support, including credit: business growth requires resources, which are often only available by borrowing. However, if banks are risk-averse, or the cost or credit too high, then enterprises will be unable to move from start-up to viable entity, capable of employing.
  7. The right people to employ: skills, skills, skills… Job applicants need to be able to demonstrate the skills businesses want. Without these, employment will be unlikely. Each of us needs to take responsibility and control of our own lifelong learning, and governments need to support this by designing and providing curricula and vocational training programmes in collaboration with business.

To invest in the longer term, the environment for doing business needs to be one that creates confidence. This can be done with appropriate government policy and reforms.

There will always be additional requirements, depending on particular circumstances and national contexts, but, in general terms, having these seven criteria in place would go a long way to alleviating the employment crisis we face.

Political will is vital, as is a medium- to long-term vision in taking the right steps. All of society’s actors must play their role if more and better jobs are to be part of our joint future.

Photo credit main picture: TGen building at night / dlritter via freeimages

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Brent H. Wilton

Brent H. Wilton is secretary-general of the International Organisation of Employers (IOE), the wo...

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