Rethinking the Catalytic Role of Private Sector for Inclusive Growth

Abstract

The paper argues that private firms play a vital role in enhancing inclusive growth prospects as investors, employers and creators of new and upgraded productive potential. Private sector activity matters for inclusive development as well as its quality, sustainability and inclusiveness. In most countries, the private sector is a major component of national income and the major employer and creator of jobs. The analysis suggests that private firms have the capacity to enhance inclusive growth prospects, given their ability to create new and higher value productive capacity. The capability of firms to launch new export products and raise product quality generates higher profitability and productive potential with spill over benefits to other firms and industries. However, private sector activity per se does not automatically result in equality of opportunity across individuals and firms. It has been very thoughtful to many countries to facilitate various actors to come together in public-private collaboration to build ‘Inclusive Business Models’ based on inclusive markets.