Q&A: Building the pillars of inclusive economic growth

While economic recovery is underway in many countries amid COVID-19, the United Nations Sustainable Development Goals 8, which promotes “sustained, inclusive and sustainable economic growth,” has been greatly challenged by the pandemic, with as many as 100 million more people pushed into poverty in 2020.

The situation has significantly set back improvements in areas such as gender parity in education, while widening already-existing inequalities. Yet the fallout of COVID-19 also means there’s a new sense of recognizing the need to address these gaps, said Nicole Goldin, global head of inclusive economic growth at consulting and research firm Abt Associates.

“It’s about recognizing that these unique and diverse inequalities exist and that there need to be targeted and well-defined, well-designed interventions to reach and serve these populations,” said Goldin.

Through its work, Abt aims to create more inclusive markets and quality jobs, while mitigating disparities and barriers experienced by different groups in society such as women, youth, people with disabilities, Indigenous communities, LGBTQ individuals, or geographically disadvantaged populations.

Speaking to Devex, Goldin explained the concept of inclusive economic growth, how it can be pursued by targeting specific groups with programs, and the need to fill data gaps to achieve better outcomes.

This conversation has been edited for length and clarity.

Can you explain what’s meant by inclusive economic growth?

From Abt’s perspective, the inclusive dimension of economic growth is about the intentionality we apply to ensure that our programs and work with partners have outcomes that [help to] narrow disparities, increase incomes and economic assets of the most marginalized, and create equal opportunities, while generating prosperity for all.

And it’s not only about outcomes, but the process [used to achieve them]. This means we’re inclusive in the types of businesses and stakeholders we engage, in terms of both the project participants and the ultimate beneficiaries.

While there isn’t necessarily agreement between everyone on what inclusive economic growth means, I think it's important to come to the table with at least an agreed-upon objective for who you're trying to reach in any given program. It’s then about drilling down to what the specifics in a program might be.

Can you illustrate what this looks like in practice?

One practical example is our attention to micro and small business — both in the formal and informal economy. We see these micro and small businesses, including small-scale agribusinesses, dominate the economic landscape in low- and middle-income countries where we work and focus on enabling more inclusive enterprise and building equitable support to those businesses to help them compete and grow.

We’ve incentivized impact fund managers in Southeast Asia to invest in women-owned small- and medium-sized enterprises. And in Cambodia, an Abt-implemented [U.S. Agency for International Development] project facilitated $34 million in increased sales of horticultural products, and created nearly 2,000 full-time-equivalent jobs in less than five years.

We’re also looking at growth sectors that can offer more prospects to populations that are routinely left out, such as the green economy and digital economy.

What other steps need to be taken to identify and address some of these gaps?

One thing we’ve noticed is that there’s been an inadequate level of disaggregation in the sense of the context that's really needed to address overlooked and often interconnected disparities or areas of exclusion. This is sometimes in terms of factors such as geography, age, or education level.

For example, even if there’s been progress in recognizing and addressing women’s economic or financial exclusion, women are too often taken as a homogeneous group. But in reality, it may be rural women that are most affected in any given dynamic, or older women trying to sustain a business in the aftermath of the pandemic.

Take young women, who were doubly hit by the pandemic: working youth lost their jobs at higher rates and because of school closures, they lost their learning opportunities, which then later affects their income-generating potential. This means it's about recognizing, among women and girls, the specific needs of adolescents and young women.

In Uganda, for example, many young women and girls are now married and won't be returning to school. Similarly, young men and boys now have businesses or work and won't be able to return to school. So, in a resilience project with USAID, we are adapting and adding activities aimed at improving school enrolment and livelihood skills among adolescent girls to address pandemic learning losses and reach those out of school.

So I think it's important to be targeted about who we need to serve with any given activity. But sometimes there’s a lack of disaggregated data or evidence to identify or understand these distinct needs.

At Abt, we’re looking out for these potential challenges and, with our partners, working to identify at the outset and utilize a range of methodologies to address some of these gaps.

How has the pandemic affected moves toward inclusive economic growth, and how do you see things going forward as a result?

The pandemic has exposed and exacerbated inequalities that were already there, and disproportionately impacted many individuals and small businesses that were already likely facing economic exclusion, marginalization, or barriers to entry.

Women, youth, and persons with disabilities were all heavily affected, with as many as 100 million more people pushed into extreme poverty. I already mentioned the school closures and the impact that’s going to have.

Another example is that women were already doing roughly 75% of unpaid care and household work around the world before the pandemic, with the proportion particularly high in LMICs. That proportion only grew when schools closed, family members were sick, and women were further pushed out of the workplace.

Yet in addition to the pandemic, the global forces of climate change, and enduring conflict and fragility, which also impact people disproportionately, mean that inclusive economic growth has a new sense of urgency; I think there's a new sense of recognition around the need to address some of these gaps.

As the world works to recover from COVID-19, what would be your call to action for decision-makers when it comes to inclusive economic growth?

We're working with our partners and clients to explore ways to reinforce, scale, and introduce inclusive growth activities into our existing projects, as well as new economic growth, but also our cross-sectoral programs and work we're doing in other areas.

For example, how can we think about addressing some of the issues I talked about through our work in health systems? In Jordan, we’re upskilling health professionals and nursing students with COVID-specific skill sets — mental health and coping, treating PWD, improving home care, for example — not only improving care and the health system’s ability to respond to the pandemic but opening the path for higher-skill, higher-paying jobs. Or it’s thinking about our climate activities, and the linkages therein generating employment or business opportunities through nature-based solutions, for example, in a more inclusive way.

So, our call to action is to start with the objective of inclusivity. Any economic growth program can be inclusive — it’s about understanding that, integrating it into the other technical areas that we're working in, and building that data and evidence base in a way that creates a level playing field and increases widely shared possibilities.

That includes engaging a broad range of stakeholders, and ensuring that the voices of those who are often economically marginalized are elevated because the optimal outcomes of inclusive economic growth will only come with inclusive processes and systems.