Down to business

Governments must continue to adopt appropriate labour policies and structural change that will support enterprise creation, entrepreneurship and innovation
Business and Industry Advisory Committee (BIAC) to the OECD

Thanks to prompt and significant government responses to the crisis, many economies are experiencing initial signs of recovery. However, there is still much uncertainty concerning what lies ahead and unemployment is still rising in many countries. The OECD unemployment rate reached a post-war high of 8.5% in July 2009, with an OECD estimated 15 million extra out of work since the start of the crisis. In contrast, unemployment across the OECD was at a 25-year low of 5.6% in 2007.

For the global recovery to take hold, governments need to undertake coordinated and coherent policy actions to restore confidence in financial markets and availability of capital. Governments must also ensure that labour market and social policy frameworks support business activity so that more jobs can be retained and new ones created.

In short, public policy must support enterprises. Governments must continue to adopt appropriate labour policies and structural change that will support enterprise creation, entrepreneurship and innovation-the only sustainable bases for the creation of wealth, jobs, new products and services. Importantly, government stimulus should be targeted, timely and temporary with a view towards long-term recovery.

Five key principles need to guide policies in support of job growth:

Actions must support job creation: Jobs may be created by short-term stimulus and emergency measures, including in the public sector, but policies must also continue to encourage entrepreneurial activity, innovation and enterprise creation, trade and investment. These activities are the most important source of jobs, and the only path to sustainable job creation.

Protectionism is not the answer: Despite ongoing challenges, there must be a continued commitment to keeping markets open to international trade and investment. Protectionism is a proven path to job losses in the long run.

Make doing business easier: Governments must vigorously promote regulatory environments conducive to sustainable enterprises, reduce excessive administrative costs and red tape, stimulate entrepreneurship and competitiveness, and provide access to lending facilities. In short, make it easier to do business.

Make the needs of small and mediumsized businesses a policy priority: The advantages that smaller firms gain from dynamism and greater flexibility are often countered by weaker fi nancial and management structures, making them particularly vulnerable in the current downturn. Providing SMEs with greater access to affordable credit, and reducing their compliance and cost burden are vital to recovery plans.

Protect "employment" rather than "jobs": Governments should ensure that labour market legislation and institutions can effectively facilitate a transition from recession to recovery. Protecting employment requires labour market institutions to provide flexibility that enables employers and employees to implement fair and creative measures to maintain employment levels.

The OECD is uniquely placed to support policy considerations and actions by governments on employment and social protection systems. The OECD also has an important role in global co-ordination on employment issues, including at the G8, G20 and with the ILO, the World Bank and the IMF. This global co-ordination has been critical in keeping the jobs crisis squarely on the agenda of governments as an issue that must be addressed in a co-ordinated manner across ministries, and this should continue.

Business is firmly committed to working with the OECD and its member governments to reinvigorate global economic growth and re-establish confidence in our financial systems based on sound and effective regulatory frameworks. This outcome is essential to addressing our employment and social policy challenges.


United States Council for International Business is amember of BIAC, the Business and Industry Advisory Committee to the OECD.


©OECD Observer No 274, October 2009

Economic data

GDP growth: +0.6% Q4 2017 year-on-year
Consumer price inflation: 2.6% May 2018 annual
Trade: +2.7% exp, +3.0% imp, Q4 2017
Unemployment: 5.4% Mar 2018
Last update: 06 Jul 2018


Stay up-to-date with the latest news from the OECD by signing up for our e-newsletter :

Twitter feed

Suscribe now

<b>Subscribe now!</b>

To receive your exclusive paper editions delivered to you directly

Online edition
Previous editions

Don't miss

  • Watch the webcast of the final press conference of the OECD annual ministerial meeting 2018.
  • International co-operation, inclusive growth and digitalisation lead the themes of the 2018 OECD Forum in Paris on 29-30 May, under the banner of What brings us together It is held alongside the annual OECD Ministerial Council Meeting on 30-31 May, chaired this year by France with a focus on multilateralism
  • Listen to the "Robots are coming for our jobs" episode of The Guardian's "Chips with Everything podcast", in which The Guardian’s economics editor, Larry Elliott, and Jeremy Wyatt, a professor of robotics and artificial intelligence at the University of Birmingham, and Jordan Erica Webber, freelance journalist, discuss the findings of the new OECD report "Automation, skills use and training". Listen here.
  • Do we really know the difference between right and wrong? Alison Taylor of BSR and Susan Hawley of Corruption Watch tell us why it matters to play by the rules. Watch the recording of our Facebook live interview here.
  • Has public decision-making been hijacked by a privileged few? Watch the recording of our Facebook live interview with Stav Shaffir, MK (Zionist Union) Chair of the Knesset Committee on Transparency here.
  • Can a nudge help us make more ethical decisions? Watch the recording of our Facebook live interview with Saugatto Datta, managing director at ideas42 here.
  • Ambassador Aleksander Surdej, Permanent Representative of Poland to the OECD, was a guest on France 24’s English-language show “The Debate”, where he discussed French President Emmanuel Macron’s speech at the World Economic Forum in Davos.
  • The fight against tax evasion is gaining further momentum as Barbados, Côte d’Ivoire, Jamaica, Malaysia, Panama and Tunisia signed the BEPS Multilateral Convention on 24 January, bringing the total number of signatories to 78. The Convention strengthens existing tax treaties and reduces opportunities for tax avoidance by multinational enterprises.
  • Rousseau
  • Do you trust your government? The OECD’s How's life 2017 report finds that only 38% of people in OECD countries trust their government. How can we improve our old "Social contract?" Read more.
  • Papers show “past coming back to haunt us”: OECD Secretary-General Angel Gurria tells Sky News that the so-called "Paradise Papers" show a past coming back to haunt us, but one which is now being dismantled. Please watch the video.
  • When someone asks me to describe an ideal girl, in my head, she is a person who is physically and mentally independent, brave to speak her mind, treated with respect just like she treats others, and inspiring to herself and others. But I know that the reality is still so much different. By Alda, 18, on International Day of the Girl. Read more.
  • Globalisation’s many benefits have been unequally shared, and public policy has struggled to keep up with a rapidly-shifting world. The OECD is working alongside governments and international organisations to help improve and harness the gains while tackling the root causes of inequality, and ensuring a level playing field globally. Please watch.
  • Read some of the insightful remarks made at OECD Forum 2017, held on 6-7 June. OECD Forum kick-started events with a focus on inclusive growth, digitalisation, and trust, under the overall theme of Bridging Divides.
  • Checking out the job situation with the OECD scoreboard of labour market performances: do you want to know how your country compares with neighbours and competitors on income levels or employment?
  • Trade is an important point of focus in today’s international economy. This video presents facts and statistics from OECD’s most recent publications on this topic.
  • The OECD Gender Initiative examines existing barriers to gender equality in education, employment, and entrepreneurship. The gender portal monitors the progress made by governments to promote gender equality in both OECD and non-OECD countries and provides good practices based on analytical tools and reliable data.
  • Interested in a career in Paris at the OECD? The OECD is a major international organisation, with a mission to build better policies for better lives. With our hub based in one of the world's global cities and offices across continents, find out more at .
  • Visit the OECD Gender Data Portal. Selected indicators shedding light on gender inequalities in education, employment and entrepreneurship.

Most Popular Articles

OECD Insights Blog

NOTE: All signed articles in the OECD Observer express the opinions of the authors
and do not necessarily represent the official views of OECD member countries.

All rights reserved. OECD 2018