Economic growth can lead to new and better employment opportunities and provide greater economic security for all. Moreover, rapid growth, especially among the least developed and other developing countries, can help them reduce the wage gap relative to developed countries, thereby diminishing glaring inequalities between the rich and poor.
Jobs are the bedrock of both economic and social development. And growth drives development. By leveraging labor, individuals and households have a sustainable pathway out of poverty.
Creating jobs — led by the private sector
Creating high-quality, sustainable jobs (target 8.3) requires a strong and thriving private sector. In low- and middle-income countries the private sector accounts for up to 90 percent of jobs. Micro, small, and medium-size enterprises, especially in services and agriculture, account for the largest share of new jobs. The formal private sector remains underdeveloped and weakly competitive in many low- and middle- income countries, with the number of formal wage jobs less than the number of new entrants joining the labor force each year. There is a strong correlation between country income and the density of new formal firms. After the decline in business registration across regions due to the 2008 global economic crisis, most regions — particularly East Asia and Pacific —have seen an uptick in recent years (figure 8e).
Increased economic growth is needed to meet the target of 7 per cent GDP growth in the least developed countries
In the period 2010-2014, the global average annual growth rate of real GDP per capita was 1.6 per cent, slightly below the rate achieved over the period of 2000−2004. The growth rate of countries in developing regions was more than triple that of developed regions (4.1 per cent versus 1.3 per cent, respectively), yet the rates for both regions were below their historical averages. This suggests that much work remains to achieve the goal of sustained and inclusive economic growth. The challenge is particularly steep for the least developed countries, whose per capita growth accelerated for a time, but has since slowed to only 2.6 per cent on average during 2010-2014, less than half the target rate of at least 7 per cent a year.