Employment

The total number of businesses being supported by CDC capital rose from 1,126 in 2011 to 1,250 in 2012. In parallel, the total jobs provided by these businesses rose from 976,000 to 1,109,000, an increase of 14%. This is the first time in CDC’s history that its capital has supported businesses providing over 1m jobs.

Employment – total portfolio, including non-core geographies

Jobs Sector ('000)
Trade 207
Financial Services 181
Business Services 174
Manufacturing - Heavy 141
Food Processing 85
Mineral Extraction 84
Public Services 72
Agricultural Crops 46
Utilities 39
Communication 35
Manufacturing - Light 26
Transport 16
Forestry & Fisheries 3
Total 1,109

We know that measuring direct employment is not the sole way to assess the job creating effect of a growing business. A CDC investee business may have large indirect employment effects through job creation in its supply and distribution chains; or induced employment effects through jobs that result from direct and indirect employees spending more and increasing consumption. However, it is difficult to measure indirect and induced jobs or second-order growth related jobs from improved services, an aspect that is particularly relevant for infrastructure investments. We want to develop good methodologies to capture this broader effect in conjunction with the DFI and IFI community.

We are also interested in the quality of jobs created. Quality of employment matters for a range of reasons: from paying fair wages to workers to ensuring that workplaces are safe and secure. And quality jobs are most effective at maximising companies’ productivity and efficiency. In future years we would like to explore this theme further.

Sector analysis

We have prioritised sectors for future investment based on their ability to create jobs (directly and indirectly) as companies grow. The sectors with high priority include manufacturing, construction, agribusiness, infrastructure, financial institutions, health and education. We have analysed our portfolio in Africa and South Asia (where our capital will exclusively be targeted in future) against these sectors.

Employment – Africa and South Asia investment portfolio

Sector Direct jobs ('000) CDC investments (£m) Sector priority
Financial Services 141 350 High*
Business Services 140 333 Low
Manufacturing - Heavy 91 189 High
Trade 63 89 Low*
Public Services 41 51 High
Agricultural Crops 34 10 Medium
Utilities 32 245 Medium
Communication 23 69 Low
Transport 15 20 Medium
Mineral Extraction 17 86 Low
Manufacturing - Light 5 18 High
Food Processing 4 18 High
Forestry & Fisheries 3 15 Medium
Total 609 1,493  

* Certain business sector priority categorisations are subject to adjustment depending on the business type or geography.

The sectors we have determined to be high priority for future investments don’t necessarily attract the most capital today, but we expect them to grow over time and to be the main drivers of job creation in our portfolio. Note that financial services and trade are subject to adjustment depending on the business type or geography. A trade investment may be classified as high priority if a large proportion of its procurement is local as this has a positive impact on indirect local employment. Similarly, financial services investments are reclassified as low priority in some Indian states and countries such as South Africa where fewer than 40% of companies consider access to finance a constraint and access to finance is above 40%.