How Subnational Insights Can Drive Job Creation and Economic Growth Globally

A new World Bank report is reshaping how we think about economic growth and job creation, arguing that national statistics often hide the real story. Produced by the World Bank Group's Regulatory Efficiency Unit (DECRE), the Policy Indicators Group, and the Global Department for Urban, Subnational Finance, Tourism and Disaster Management, the study shows that business conditions vary widely within countries. These local differences can determine whether businesses succeed, invest, and create jobs. As millions of young people enter the workforce globally, understanding these local realities is becoming more urgent than ever.

The Global Jobs Challenge Is Local at Its Core

The world faces a major employment gap. While over a billion young people will join the workforce in the coming decade, far fewer jobs are expected to be created. The report highlights that job creation is not evenly spread across countries but concentrated in specific cities and regions. Some areas thrive, while others lag behind. This uneven growth can lead to rising inequality and social tensions. To address this, governments need to look beyond national averages and focus on where opportunities are actually being created or lost.

Cities Drive Growth, But Only If Systems Work

Cities are often the engines of economic growth. They bring together businesses, workers, and infrastructure, creating opportunities for innovation and productivity. But the report makes it clear that urban growth alone is not enough. If cities lack proper planning, infrastructure, or efficient regulations, they can become crowded, expensive, and difficult places to do business. In such environments, firms struggle with delays, high costs, and uncertainty. This limits their ability to grow and hire, weakening the overall economy.

Same Rules, Different Results Across Regions

One of the report's key findings is that even when rules are set at the national level, their implementation varies widely across regions. In some cities, starting a business or getting permits can be quick and simple. In others, the same processes take much longer due to inefficiencies, lack of coordination, or weak institutions. These differences create an uneven playing field for businesses. Companies are more likely to invest in regions where processes are faster and more predictable, leaving other areas behind.

Data That Drives Real Reforms

The report emphasizes the importance of measuring business environments at the local level. By collecting detailed data on how regulations work in practice, governments can identify specific problems and fix them. This approach has already shown results. In countries like Nigeria and Egypt, subnational data has helped design reforms that improved services, reduced delays, and encouraged investment. At the city level, places like Cape Town have used local data to track performance and streamline processes, making it easier for businesses to operate.

In Europe, similar studies have revealed large differences between cities within the same country. These findings have helped governments simplify procedures and share best practices across regions. The key lesson is that when policymakers have access to clear, local data, they can design smarter and more targeted reforms.

Challenges Remain, But the Direction Is Clear

Despite the progress, the report acknowledges that improving local business environments is not easy. Many regions face challenges such as limited resources, weak institutions, and political resistance. In some cases, reforms may look good on paper but fail to deliver real improvements. To avoid this, the report calls for strong monitoring systems, transparency, and active involvement of businesses and communities.

It also stresses that regulations alone are not enough. Businesses need reliable infrastructure, access to markets, and skilled workers. Successful reforms combine regulatory improvements with investments in these areas, creating a supportive environment for growth.

A Shift Toward Smarter Policymaking

The report concludes with a clear message: economic policy needs to become more local and data-driven. Subnational assessments provide a powerful tool to understand what is really happening on the ground. They help governments identify bottlenecks, learn from successful regions, and design policies that work in specific contexts.

As countries search for ways to create jobs and boost growth, the focus is shifting from broad national strategies to targeted local action. The future of economic development, the report suggests, will depend on how well governments can understand and respond to the unique challenges and opportunities within their own regions.