Job creation numbers from economic development plans are often nominal commitments. Governments that make a concentrated effort to back their numbers can meet and maximize job creation goals.
Job creation is a cornerstone of economic development, but the topic is often an afterthought: Leaders sometimes guess how many new jobs a given project will create or subtly inflate numbers, making it harder for governments to hold ministries accountable for fulfilling their promises. Measuring job creation in general is difficult. But missed opportunities to maximize the number and quality of jobs created are worse than inaccurate estimates.
There’s a better way. Governments can use four approaches to produce more accurate estimates and maximize job creation. First, they can start with a bottom-up estimate that uses operational multipliers relevant to the scope of work in any sector to get a clearer view on what’s possible. Second, they can develop a shared language and precise definitions of jobs and other metrics. Third, they can use robust tracking mechanisms to ensure accountability. Last, they can find new ways to coordinate both the project and the forces of labor supply and demand.
The benefits are clear. Becoming more active in forecasting and tracking job creation enables policymakers and economic planners to anticipate and address unemployment challenges in underresourced or rural areas, as well as overall labor market shortages and needs. It also allows them to ramp up educational programs to better meet the future labor demand of sectors and occupations. Coupling forecasting with clear accountability ensures that economic development happens on time and on budget. It will help governments understand the returns they should expect from investors when they grant concessions or licenses and help them make better decisions about the projects that are worth prioritizing. Ultimately, it will help governments lay the foundation to hold investors accountable for their promises.
This article discusses how governments across geographies and economic contexts can use this new approach as part of their national or regional development programs to produce better results.
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