Gazelles May Hold Key to Job Creation in Developing Countries

RESEARCH TRIANGLE PARK, N.C. — A special class of business enterprises called “gazelles” might be a key resource in generating jobs in developing countries, according to a report by researchers at RTI International.

The term “gazelles” refers to a special class of businesses -- most of which are small and medium enterprises -- that have created a disproportionate number of jobs in the United States, said Chrysanthos Miliaras, a senior development finance specialist at RTI.

“Although the link between small and medium enterprises and job creation in the United States is well established, comparatively little is known about if and how they drive job creation in developing countries,” Miliaras said. “Unless a deeper understanding is developed regarding which small and medium enterprises create jobs and how they do it, it is unlikely that policies designed to support them will achieve the impact necessary to tackle the global jobs deficit.”

According to Miliaras, 400 million jobs are needed to absorb new entrants to the global labor market over the next decade.

Miliaras, with input from his colleagues, developed a research agenda that will give developing country governments and the donor community information they need to more effectively support small and medium enterprises that create jobs. Miliaras outlines his recommendations in Creating Jobs that Reduce Poverty: a Research Agenda on Developing Country Gazelles, an RTI Press Research Report. 

The research agenda is based on a series of three roundtables on small and medium enterprises organized by RTI and the Aspen Network of Development Entrepreneurs (ANDE), as well as on input from a working group on developing country gazelles that formed after the roundtable series concluded.

The agenda Miliaras proposes will enable the donor community to answer these questions:

• Which small and medium enterprises have the greatest impact on jobs, productivity, and poverty?
• Which inputs (finance and technical assistance) have the greatest impact on small and medium enterprises performance?
• What are the barriers preventing growth-oriented small and medium enterprises from becoming “gazelles”?
• What barriers do youth and women-led growth-oriented small and medium enterprises face?

“Answers to these questions will give developing country governments and other development stakeholders the information they need to ensure that their limited resources are used as effectively as possible to create jobs, raise worker productivity, and reduce poverty,” Miliaras said.