20 November 2018: The UN Conference on Trade and Development (UNCTAD) has released the 2018 edition of the least developed countries (LDCs) report on entrepreneurship for structural transformation. The report notes the importance of economic structural transformation for poverty eradication and long-term development in LDCs.
Titled ‘Entrepreneurship for Structural Transformation: Beyond Business as Usual,’ the report defines structural transformation as the transfer of production factors, such as land, labor and capital, from activities and sectors with low productivity and value added to those with higher productivity and value added, which are different “in location and organization, as well as technologically.” The publication discusses: sustainable development, structural transformation and entrepreneurship; the entrepreneurial landscape in LDCs; the local entrepreneurship dimension of global production systems; major constraints and current policy frameworks to entrepreneurship in LDCs; and policies for transformational entrepreneurship.
On the LDC entrepreneurial “landscape” the report finds, among other observations, that: self-employment in LDCs is at 70% of total employment compared with 50% across other developing countries, and is declining only slowly; innovation is limited, with an average of 15% of early entrepreneurs reporting the introduction of a new product or service, compared with 24% in other developing countries; and only 12% of early entrepreneurs have a post-secondary education compared with 36% in other developing countries, which shows a low level of educational attainment.
The report states that several structural features of LDC economies, including limited financial development, insufficient infrastructure, lack of institutional development, elevated risk levels and the disempowerment of women, tend to weaken entrepreneurship and enterprise development. It adds that limited urbanization and the disproportionate role of agriculture also have an impact on the nature of enterprises in LDCs.
In order to harness entrepreneurship for structural transformation, the report calls for: entrepreneurship policies to foster linkages between firms of different sizes, stages of maturity and sectors by means of business clusters, networking and alliances; introducing entrepreneurship education and skills development in both mainstream and specialized education programmes; and creating clusters of learning, innovation and creativity involving universities, schools, research, vocational institutes and experimental laboratories to “sustain a flow of new ideas” into firms throughout their life cycle.
LDCs are countries characterized by low levels of income and severe structural impediments to sustainable development. The LDC category was established by the UN General Assembly (UNGA) in 1971 to acknowledge that special support measures were needed to assist the least developed among the developing countries.
The 47 current LDCs are Afghanistan, Angola, Bangladesh, Benin, Bhutan, Burkina Faso, Burundi, Cambodia, the Central African Republic, Chad, the Comoros, the Democratic Republic of the Congo, Djibouti, Eritrea, Ethiopia, the Gambia, Guinea, Guinea-Bissau, Haiti, Kiribati, the Lao People’s Democratic Republic, Lesotho, Liberia, Madagascar, Malawi, Mali, Mauritania, Mozambique, Myanmar, Nepal, the Niger, Rwanda, Sao Tome and Principe, Senegal, Sierra Leone, Solomon Islands, Somalia, South Sudan, the Sudan, Timor-Leste, Togo, Tuvalu, Uganda, the United Republic of Tanzania, Vanuatu, Yemen and Zambia. Vanuatu and Angola are scheduled to graduate from the LDC category in 2020 and 2021 respectively. [Publication: The Least Developed Countries Report 2018 – Entrepreneurship for structural transformation: Beyond business as usual] [UN press release on report]