Publication: Latin America and the Caribbean Economic Review, October 2025: Transformational Entrepreneurship for Jobs and Growth
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2025-10-07
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2025-10-07
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Latin America and the Caribbean faces a challenging outlook: slow economic and job growth, lower commodity prices, sluggish decline in global interest rates reducing demand and complicating debt service, weak investment, stalled nearshoring, and tight fiscal space. Structural gaps in infrastructure, education, regulation, competition, and tax policy curb technology adoption and quality job creation. The report highlights an entrepreneurship puzzle that despite high measured entrepreneurial spirit, status and activity in the region, growth remains low. This is due to a mass of informal micro firms with little intent to scale coexisting with a shallow pool of transformational firms. Education and STEM shortfalls shrink the pipeline; management quality, registered startups, and tecnolatinas lag peers. Two binding constraints—shallow financial markets and scarce skilled workers—impede scaling. Possible policy responses include strengthening human capital through improved education and targeted training, expanding access to finance by deepening capital markets and enhancing creditor protections, fostering competitive markets and innovation incentives, and modernizing labor regulations to reduce hiring costs.
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“Maloney, William F.; Vuletin, Guillermo; Garriga, Pablo; Morales, Raul. 2025. Latin America and the Caribbean Economic Review, October 2025: Transformational Entrepreneurship for Jobs and Growth. © World Bank. http://hdl.handle.net/10986/43741 License: CC BY 3.0 IGO.”
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