Jobs Mdtf: Call for Expressions of Interest in Four Prioirty Areas

JOBS MDTF: CALL FOR EXPRESSIONS OF INTEREST IN FOUR PRIOIRTY AREAS

Reducing inequality in market access and raising productivity offarmers and informal SMEs through value chain development

Background / motivation:

60 percent of workers (80 percent in developing countries) are farmers, small-scale entrepreneurs, own account workers, or wage employees in the informal sector. They are involved in low productivity activities, mainly are poor, and tend to have poor access to markets and are not in position (size, market power, access to information) to capture value. An agenda to promote shared prosperity and reduce poverty needs to improve earnings opportunities for these workers, by linking them to sources of market demand and helping raise productivity and capture value added opportunities. Value chains are increasingly viewed as an effective channel through which to deliver these outcomes due to their ability to deliver expanded market access through contracting arrangements, which also create the incentives for greater learning and technology diffusion. But many questions remain about the effectiveness of value chain approaches to deliver sustainable jobs and earnings for small farms, microenterprises, and the informal sector. The barriers for these firms to access established value chains are significant, the incentives for lead firms to transfer knowledge to microenterprises is often questionable, and the capacity of microenterprises to sustain and upgrade their positions in value chains is hugely challenging. And among farmers and micro-entrepreneurs, the ability to pursue these opportunities can vary significantly. Challenges can be compounded by differential access to assets, human capital and restrictions on mobility that can vary by gender, age, income and household composition etc., and would need to be factored into solutions for outcomes to be inclusive. For example, understanding what underlies the patterns of gender sorting across crops/products and activities across the production processes can ensurewomen can enter VCs and exploit the gains from participation.

Objective:

This call seeks proposals interventions and pilots that seek to support formal and informal SMEs, microenterprises, and smallholder farmers to expand market access, raise productivity, and improve earnings by integrating them in competitive value chains (VC) (local or global). Proposals should focus on innovative approaches to meet these objectivesby addressing issues such as:

•Overcoming information asymmetries and coordination failures to support access and higher value capture

•Support for adoption of standards

•Establishment of common user facilities

•New approaches to microenterprise capacity building

•Brokering linkages among value chain agents, including working with lead firms to expand their network of suppliers or to enter new markets

•Innovative uses of technology in supporting the above interventions

• Identify and address potential differences in women’s and men’s constraints and ability to access the proposed solutions

Proposals should be closely linked to ongoing and planned operations. Proposals that address how changes in trade, investment and business regulations impact VC dynamics would be considered. They should be focused on value chains and sub-sectors with high job creation potential, particularly in lagging regions and in other locations where the poor and bottom 40 percent as well as women-owned farms and microenterprises are concentrated.

The role of ICTs in expanding job opportunities

Context. Information and communication technologies (ICTs) ICTs can help firms grow by linking them to markets and facilitating information flows. Even the smallest firms and self-employed entrepreneurs can now use ICTs to connect with markets locally or globally. This should help reduce firms’ transaction costs, overcome information asymmetries, and address coordination failures in ways that expand access to and participation in markets.

The examples are many. While Angie’s List, Yelp, and Zomato provide consumers better information about service providers, OpenTable and Booking.com help service providers to link with customers, even across geographies, just as Amazon, Alibaba, and eBay link businesses to each other and to consumers. And platforms such as Etsy connect small niche producers with global markets. Many local platforms also exist, in economies as diverse as India, the Kyrgyz Republic, Morocco, and Kosovo.

But the jobs impacts resulting from firms’ use of ICTs are not well understood, especially in the developing world. For ecommerce, jobs impacts should include producer firms directly, but also impact jobs in logistics and supply chains, retail markets, and those in the ICT, financial services, and other ‘supporting infrastructure’ sectors and markets. For on-line ratings and review services that address important information gaps, jobs impacts should flow from the creation of positive reputations by firms and individuals, helping buyers make better choices and expand the set of producers they are willing to buy from, and pushing providers to deliver better services in markets that are more competitive. Understanding these dynamics should inform how public policy could influence more firms to adopt ICTs to link with markets and resources, and to unlocking job opportunities in the process.

Objective. This MDTF window will fund pilots that will create knowledge on how the potential of technology can be realized to improve job opportunities, focusing in this call on the demand side. The aim of this window is to expand the evidence on how expansion of ICT services can help firms grow, and understand their effects on the quantity of jobs, the productivity and earnings of these jobs, and increasing inclusion, including the potential to enable greater female entrepreneurship. The strategic objective is to identify specific public or private sector interventions that could enable firms to use ICT to create more, better, and inclusive jobs through various forms of ecommerce and improved service platforms. What interventions could lead more firms to participate and benefit from improvements in market linkages and information flows in ways that expand job opportunities? Are there particular constraints or opportunities facing women or men entrepreneurs or young entrepreneurs in accessing these opportunities?

Where relevant, proposals are encouraged to address how ICT itself could help overcome some of the challenges of operating a business in a fragile situation (e.g. how can electronic transactions or rating sites expand trust or contribute to dispute resolution; digital financial transactions could reduce risks associated with operating in higher crime areas) as well as expanding access to the jobs themselves (e.g. reducing the role of geography, addressing constraints to women’s mobility in some locations). Proposals should also ensure certain groups are not excluded (e.g. if there is limited access to ICT infrastructure, relevant skills, gender sorting across activities etc.).

The preference is to fund proposals that identify new and innovative programs or policy interventions with high-quality evaluations. Winning proposals will address the underlying contributions ICT can make, the constraints that were preventing them from being realized, and why the chosen country or countries provide the right context for the pilot(s).

Cities, Towns and Jobs in the Urbanization Agenda: Overcoming Spatial Mismatch for Inclusive Employment

Background/motivation:

Urbanization is an important trend across the world. Economies of agglomeration would suggest a tendency to geographic concentration of jobs, i.e. in larger cities, and often even in certain areas within these cities. This contrasts with where most poor people are, in rural areas and within cities, in city neighborhoods removed from the jobs centers. Secondary town development and better geographic mobility of people and firms within cities may help overcome this spatial mismatch. Yet, much remains unknown about 1) how best to foster secondary town development and rural-urban linkages, 2) what the job generating effects for poor women and men (on and off the farm and at different stages in the structural transformation) of different interventions will be, and 3) whether it is more effective for inclusive employment generation within cities to bring jobs to people or to bring people to jobs.

To be truly inclusive, solutions will need to take into account how and why constraints, risks and opportunities vary across the population, by gender, age, skill level and/or income. There can be significant differences in the motivation and ability to migrate to different settings across individuals that would need to be incorporated into effective approaches (e.g. whether young men are more likely to go to big cities and families to rural towns; intra-household dynamics in balancing farm and non-farm work; differing abilities to cope with risks to income, safety, changing demands on hours and skills etc.).

Objective: This call fosters knowledge generation on these questions. The emphasis is on learning from (investment and/or policy) interventions and pilots through rigorous evaluation. To meet these objectives, proposals should identify how to examine the job generating and poverty reducing effects of different interventions that foster secondary town development and rural-urban linkages or of interventions that close intra-city spatial mismatches. The aim is to understand both who is likely to be able to move to jobs (e.g. by gender, age, skill level and/or income), as well as who is likely to be able to benefit from different types of jobs opportunities and to build that understanding into the proposed solutions so as to ensure more inclusive job outcomes.Such activities could include:

Expansion of basic services, infrastructure (electrification, ICT) and governance capacity in secondary towns;
Complementary approaches such as urban planning (housing, land), policies to attract skilled workers and firms, and tax incentives & regulations influencing the location of firms;
Cluster development (e.g. agro-industrial parks) linking secondary towns to proximate villages to promote jobs and enterprise development around secondary towns;

Removal of constraints to labor mobility within cities (public transport; vouchers for rental in high employment districts; constraints on women’s mobility) or constraints to firm mobility (improving local environments and use of idle land/assets for firm development; support to local co-operatives and SMEs).

Analytical proposals that exploit existing information and modeling to address these questions will only be considered, if truly innovative (and only for a limited amount of total available funds). Topics include:

City size profiles (basic social services, skills, activity and formality, incomes and inequality);
Methods and applications to explore job generating effects for poor women and men of different interventions to foster secondary town development versus metropolitization.
IV. Promoting productive entrepreneurship among youth

Background: why does youth employment matter? Millions of young people are unemployed or are engaged in insecure or vulnerable work - and nearly a billion more young people will enter the labor market over the next 10 years. For young people who face limited local opportunities, those who are most ambitious or most desperate may leave their homes to seek opportunities elsewhere. Some of this movement can allow workers to take advantage of the increasing returns that arise from human interaction, but many cities are growing at unsustainable rates. According to the International Organization for Migration more than 200 million people live outside their country of birth; as recent events show, this option entails considerable costs and risks for both migrants and receiving regions.

In the absence of enough jobs to absorb young workers, entrepreneurship and self-employment is quickly becoming a necessity for young people. And this is typically in the informal sector, creating its own problems and complexities for providing support at scale. We know that young people face particular challenges in becoming entrepreneurs: they have fewer contacts, less experience and knowledge of markets and more limited access to credit, and employers and investors often see them as riskier bets. In addition, delayed entry into productive employment opportunities can affect their earning potential for the rest of their lives. Young women often face particular challenges with more limited access to assets, more limited networks of potential business contacts and more likely to be steered to lower value added activities.

What has been tried, and where are the gaps in knowledge, experience, and investments? Decades of investment in human capital has been important, but sadly inadequate, to achieving global objectives. Most investments to enhance employment among youth have focused on supply-side interventions such as vocational and technical training, on the assumption that young people are constrained by a lack of skills in their search for employment. However, recent research (S4YE, 2015) suggests that while skills training shows positive results overall, these interventions can take a long time to implement and realize returns and other interventions can show even higher levels of impact. For example,returns to entrepreneurship interventions can be higher when combined with access to finance or improved access to markets and when targeting higher value added activities, particularly for young women. This call is to help identify innovative and effective interventions that can help more young people overcome obstacles to successful entrepreneurship.

Call for proposals. This window will fund the design, implementation and/or evaluation of new innovative pilots or an expansion of proven interventions that help young people create and grow enterprises. There is a particular interest in rural areas and/or fragile states and ensuring women share in the opportunities. These pilots must seek to understand what policies or investments can alleviate the constraints that face young men and women entrepreneurs and to be able to evaluate the interventions rigorously. How can young people be supported in their business activities to create more jobs, and to increase the returns to those jobs? What solutions will be effective in fragile environments? What insurance or risk-related services can best deal with enterprise failures among youth? Successful proposals will address the scope for scaling up these approaches, including potential general equilibrium effects. Of interest too are the impacts of entrepreneurship on future wage employment for women and men; whether/when entrepreneurship can be a stepping stone to broader employment opportunities. The proposals must explain why the suggested interventions will have an impact on the constraints identified and on the intended outcomes, including reference to previous experience and evidence.