Inclusion that promotes growth?

The notion of inclusive growth has diverse definitions. A key priority is to support the economic opportunities of marginalised groups, including those in the informal sector – not just redistributing benefits of growth, but providing those groups with opportunities and more equal playing fields. Here are some examples of how growth and inclusion can go hand-in-hand, from our program at IDRC supports research that promotes economic growth and inclusion simultaneously.

Our GrOW program supports evidence that can inform social and economic policies to improve poor women’s lives, while promoting economic growth. One of the key barriers for women is their ‘double burden’: they spend far more time doing unpaid work caring for their families than men. GrOW-supported research is testing the provision of daycare in low-income countries. In Kenya, the Nairobi City Council and  IDRC-supported researchers aim to improve the quality of childcare in the city’s low income settlement. This is providing new evidence on the economic returns of expanding affordable and quality child care options for poor women, and on sustainable financing models for low income countries.

While one-third of all businesses are owned by women, they face many disadvantages: in access to training, finance, and markets. WEConnect helps women-owned businesses connect to large companies committed to buying from women owned and minority businesses. IDRC support helped build a database for women entrepreneurs to register (which also makes it possible to understand characteristics of growth-oriented firms). In India 600 Indian women-owned businesses registered in the database, and 60 became certified to supply large companies: this helped generate additional revenue of 170 million CAD annually, and employ more than 4,600 people across India. We are expanding this work to expand connections to markets and value chains, through supporting work on inclusive distribution, promoting social enterprise like B Corps, and promoting better jobs in value chains in garment, electronics, and agricultural in South-east Asia.

In Latin America, cash transfer programs have reduced poverty, helped reduce inequalities, and provided incentives to families to educate children and bring them to health clinics. Our program supports organisations that help beneficiaries get access to financial services, so that they can use the cash grants to save and invest, and thus improve the small-scale activities that typically engage in. Proyecto Capital provides marginalised groups with access to saving accounts financial training to help them use their savings to enhance their small businesses. The research supported by IDRC helps to show what impact this has, and what can be done to improve the programs. Getting a savings account and financial education can improve the small businesses, for example invest in animals by as much as 10 per cent (at very low costs), and thus increase incomes and well-being.

Around the world, job prospects are scarce. This is a particularly the case for young people, and Africa is most affected by this as it has the youngest population. In many developing countries, young people are creating their own jobs to improve their economic prospects. Entrepreneurship is part of the solution.  Policies are needed to support young entrepreneurs. IDRC support is helping to provide governments with evidence on critical questions: Who are the young entrepreneurs? What are their challenges? Which ones have the potential to grow, and what are reasons behind failures? How can programs and policies support their aspirations? First-time data in more than 15 countries in Africa, Asia and Latin America. Policy makers, like in Vietnam, can now use this data to boost small businesses and support youth ventures.

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