The Role of Entrepreneurship in Poverty Alleviation

Commercial enterprises, when successful, can have significant positive impact and transform the life of a community, leading to improvements in both the competitiveness and human development of their respective economies.

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Small and medium-sized enterprises (SMEs) account for the majority of existing businesses in low-income countries (excluding informal sectors). According to numerous studies (IFC, 2016, WB, 2020) SMEs represent more than half of the formal jobs around the world and their share of total employment is comparable to that of large firms. In addition to driving growth and job creation at the local level, SMEs play an increasingly important role when addressing urgent development challenges, especially those related to sustainability and service delivery.

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Technological advances provide economic opportunities for SMEs in developing countries. In the area of ​​clean technology alone, SMEs can take advantage of a market that could reach USD 1.6 trillion over the next decade (UNCTAD, 2020).

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According to the Global Entrepreneurship Monitor, almost 2 out of 3 Latin American youth and entrepreneurs are motivated by opportunity and not by necessity. The Latin American and Caribbean region has become a hotbed of youth-led startups, and it is already the second most entrepreneurial region in the world with 4 out of 10 young Latin Americans expressing their desire to start their own businesses (GEM, 2022).

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Below you will find some of the recent projects, publications and activities from our network which provide useful evidence on the results and impact of entrepreneurship projects in low and middle income countries.