Developing economies are expected to see approximately 1.2 billion people reach working age over the next 10 to 15 years, creating an urgent need for more employment opportunities, stronger businesses and sustainable economic growth.

Micro, small and medium-sized enterprises (MSMEs) could play a central role in addressing this challenge. These businesses contribute to local economies, support entrepreneurship and provide livelihoods across a wide range of industries. Strengthening their ability to operate, expand and hire workers will be important as millions of young people enter the labour market.

MSMEs at the Centre of Employment Growth

Small businesses often provide opportunities for people who may find it difficult to enter formal employment through large corporations. From retail and manufacturing to agriculture, technology and local services, smaller enterprises help generate income and support economic activity within communities.

However, many MSMEs face barriers that limit their growth. Difficulties accessing affordable finance, inadequate infrastructure, limited market access and gaps in business skills can prevent them from expanding operations and creating additional jobs.

Addressing these obstacles could help businesses become more productive, competitive and capable of employing more people.

Access to Finance and Skills Will Be Important

Expanding access to credit, improving digital infrastructure, providing practical business training and simplifying regulations could help smaller enterprises reach their potential. Better connections to domestic and international markets may also enable them to increase sales and invest in their workforce.

Governments, financial institutions, development organisations and private-sector investors all have a role in creating conditions that allow MSMEs to grow. Policies that encourage entrepreneurship while improving access to essential business services can support job creation over the long term.

A Growing Workforce Presents Both Opportunity and Pressure

The projected increase in the working-age population presents developing economies with a significant opportunity to strengthen productivity, raise household incomes and accelerate development. However, these benefits will depend partly on whether economies can generate enough productive and sustainable employment.

Without sufficient job opportunities, countries could face greater pressure on public services, household finances and labour markets. With the right support for businesses and workers, the expanding workforce could instead become an important driver of economic progress.

The World Bank Group has highlighted the importance of supporting MSMEs as developing economies prepare for this demographic shift. Enabling smaller businesses to grow will be a key part of efforts to connect a rising number of job seekers with meaningful economic opportunities.