4. Enterprise Developement
|Relevant SDG targets
8.3, 8.4, 8.8, 9.3, 9.5
|Relevant Policy Outcomes
1, 4, 10
|On this page: DWA-SDG Relationship | Cross-cutting policy drivers | Partnerships | ILO Capacity | Resources|
Enterprises are central to the DWA and sustainable development: enterprises create jobs, observe and implement labour standards, contribute to social protection through taxes and own contributions, and constitute the place where workers and employers interact on a daily basis. Moreover:
- the vast majority of jobs in all countries are generated by private sector enterprises, in particular small and medium enterprises (SMEs);
- many international labour standards can be implemented only if applied at the enterprise level;
- social dialogue at the enterprise level is key to improving working conditions, competitiveness and productivity;
- several larger enterprises, including multinationals, have entered into public-private partnerships with the ILO and support the Office’s development cooperation portfolio; and
- enterprises are the subject of one of ILO’s seven centenary initiatives, namely the “Enterprises Initiative” , which seeks to establish a platform for ILO engagement with enterprises which would contribute to their sustainability and to ILO goals.
The term “enterprise” covers a broad variety of business ventures of different sizes (ranging from own-account informal economy operators to multinationals controlling entire global supply chains); ownership structures (family owned, limited company, shareholding company, state-owned or parastatal, as well as cooperatives, mutual benefit societies, and similar social economy ventures); business orientation (commercial enterprises, social enterprises, public enterprises, community enterprises) or economic activity (agricultural, manufacturing, services, or a combination of those).
The mandate of ILO’s work in the area of enterprise development is spelt out in ILO R.189, on Job Creation in Small and Medium-Sized Enterprises (1998), ILO R.193 on the Promotion of Cooperatives (2002), and the Tripartite Declaration of Principles concerning Multinational Enterprises and Social Policy (MNE Declaration), adopted in 1977 and updated in 2000, 2006 and 2016. These three instruments are being promoted by three technical units within the Enterprises Department. The ILCs 2007 and 2013 provide additional guidance through the conclusions concerning the promotion of sustainable enterprises, as well as the conclusions concerning achieving decent work, green jobs and sustainable development.
The approaches to the promotion of enterprise development have evolved over the years. Three intervention models can be identified. The first aims to promote entrepreneurship and build the capacity of individual enterprises through increased access to relevant business development services (BDS), including access to finance. The second model seeks to assist governments and social partners in establishing a conducive and enabling environment for enterprises (including the legal and regulatory framework, the rule of law, the right to secure property and land rights). The third intervention model seeks to improve the functioning of markets and sectors through integrated and systemic value chain development, including through bottom-up approaches to “make markets work for the poor”. In addition, local economic development strategies have been devised to embed enterprise development into the local context. Moreover, the ILO provides guidance to enterprises on international labour standards in developing corporate social responsibility (CSR) and sustainable supply chain policies. The intervention models are being adapted to the type of enterprise in view: SMEs, multinationals or cooperatives. With respect to the latter, the ILO has in recent years enhanced its focus and expertise to the broader “social and solidarity economy” (SSE). According to the definition adopted at a tripartite Regional Conference on Social and Solidarity Economy held in 2009 in South Africa, the term SSE designates organizations “in particular cooperatives, mutual benefit societies, associations, foundations and social enterprises, which have the specific feature of producing goods, services and knowledge while pursuing both economic and social aims and fostering solidarity.”21 The enterprises and organizations belonging to the SSE contribute to all four pillars of DWA by creating and sustaining jobs and livelihoods, extending social protection, strengthening and extending social dialogue to all workers, and promoting the application and enforcement of standards for all (24). In addition, given their principles and values, including solidarity, mutuality, reciprocity and voluntary participation, autonomy, as well as the “people of profit” imperative, SSE enterprises are particularly well placed to contribute to the three dimensions of the 2030 Agenda in an integrated manner.
The concept of “sustainable enterprises” relates to the three pillars of sustainable development – economic, social and environmental. The ILO will not promote just any enterprise, but a business that is economically viable, socially responsible and respectful of the environment. Such sustainable enterprises can flourish if the following basic conditions are met: good governance and effective social dialogue; efficient civil and political institutions and processes; macroeconomic stability and sound management of the economy; a society and culture supportive of enterprise and of entrepreneurship; the existence of adequate physical infrastructure and information and communication technologies; the availability of education, training and learning for a skilled workforce; rules and mechanisms that promote equity and economic and social inclusion; and business practices that reduce environmental damages and strive for a carbon-neutral economic activity.
DWA-SDG RelationshipThe closest relationship between enterprise development and the 2030 Agenda can be found in SDG target 8.3 which underlines the importance of enterprises and entrepreneurship in relation to productive activities, decent job creation and creativity and innovation, and stresses the need to encourage formalization and growth of micro-, small- and medium-sized enterprises including through access to financial services.22 SDG target 9.3 calls for the integration of SMEs into value chains and markets. Many additional SDGs refer indirectly to enterprises, business and the private sector in areas such as industrialization, infrastructure, energy, water, agriculture, partnerships etc. The global business community has fully embraced the 2030 Agenda, as illustrated by the Business for 2030and Coops for 2030 web sites. The role and contribution of the private sector and business in achieving sustainable development is one of the major subjects of the Addis Ababa Action Agenda on financing for development; it is also at the core of SDG 17 (global partnership for sustainable development).
Enterprises contribute to sustainable development and the achievement of SDG targets by respecting workers’ rights and contributing to decent work priorities through their day to day operations and investments. ILO’s focus on sustainable enterprises thus directly relates to the three dimensions of the sustainable development agenda, and contributes to many of its goals and targets. Enterprise development may therefore be seen as the private sector interface between the DWA and the 2030 Agenda.
Cross-cutting policy driversMany labour standards will become effective only if they are applied at the enterprise level. Similarly, social dialogue involves processes at the enterprise level as well as at the sectoral level, with the national and international workers’ and employers’ organizations ultimately representing the individual employees and entrepreneurs in the private sector.
The ILO puts particular emphasis on the role of women in business development, and has designed a special programme, as well as tailor-made strategies and tools on women’s entrepreneurship (WED). It has also undertaken work on care cooperatives in the context of the Women at Work Centenary Initiative. In line with its concern for the sustainability of enterprises, the Office has launched the Green Jobs programme which advocates for cleaner, resource-efficient operations and innovations in clean technology.
PartnershipsNumerous development partners support ILO’s enterprise development programme, including those mentioned under “productivity”. The ILO is a member of the Committee for Enterprise Development (DCED), the United Nations Global Compact, the Committee for the Promotion and Advancement of Cooperatives (COPAC), the Consultative Group to Assist the Poor (CGAP) and the UN Task Force on the Social and Solidarity Economy (UNTFSSE). In promoting sustainable enterprises, the Office collaborates closely with the World Bank (including the IFC), UNIDO, UNEP, UNHCR, UN Women, the OECD and other agencies.
ILO CapacityThe bulk of ILO expertise in the field of enterprise development is located in the Enterprises Department and its five technical units. The specialists based at headquarters work together, under the umbrella of a global team, with Decent Work Technical Team specialists located in all regions, and with numerous project staff recruited under development cooperation projects and programmes. In addition, a great number of ILO specialists and experts belonging to other technical units and departments are available to provide services to enterprises in areas such as working conditions, occupational safety and health, skills development, sectoral social dialogue, and employment-intensive investments.
ResourcesThe ILO maintains several topic portals related to enterprises: Enterprises Department offers numerous hyperlinks to a broad range of resources related to enterprise development. Additional material can be accessed through related programmes of the ITC-ILO in Turin, namely:
- the enterprise programme;
- the microfinance programme; and
- the social economy programme.
21 - ILO Regional Conference on Social Economy, Africa’s Response to the Global Crisis, October 2009
24. ILO-ITC. Social and solidarity economy : Our common road towards decent work. Geneva: ILO, 2011.
22 - “Access to finance” is mentioned under five different SDGs (targets 1.4, 2.3, 5.a, 8.3, 8.10 and 9.3).