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This paper argues that the increased flow and management of knowledge permitted by knowledge-based capital, supported by appropriate policies, can be an important factor in reducing the decision risk facing enterprises due to uncertainty and imperfect information, helping improve the resilience of development outcomes. Enterprises are conceptualized as information platforms that manage risk through investments in knowledge-based capital and complementary assets, providing them with the knowledge, protection/enabling, insurance, and coping/leveraging abilities to make better decisions in response to shocks. Investments in knowledge-based capital allow enterprises to better convert voluntary but risky reallocation and innovation decisions into productivity and wealth-enhancing opportunities. They can help the enterprise sector as a whole and most people to self-protect and realize better jobs, earnings, and consumption outcomes by adapting to shocks. However, absent appropriate policies, knowledge-based capital can have adverse distributional effects-including a skewed industrial concentration of productivity gains and more unequal consumption and income-earning outcomes between rich and poor people. The paper discusses the role of policy in facilitating risk management by enterprises, ultimately to reduce poverty and boost shared prosperity. Insufficient enterprise risk-taking is costly for the enterprise sector and the economy as it results in too little experimentation and learning. The paper argues that governments should create business environments that stimulate entrepreneurial risk-taking to invest in market and social opportunities that combine new technologies with appropriately-skilled workers. Policies allowing people to better confront and manage their risks include: (1) spurring entrepreneurial experimentation; (2) supporting skills upgrading; and (3) promoting mechanisms for joint learning through global collaboration.

Debt Markets --- E-Business --- Economic growth --- Economic Theory & Research --- Environmental Economics & Policies --- Innovation --- Intangible assets --- Investment --- Knowledge-based capital --- Labor Policies --- Macroeconomics and Economic Growth --- Poverty Reduction --- Productivity --- Risk

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The paper explores existing patterns of green innovation and presents an overview of green innovation policies for developing countries. The key findings from the empirical analysis are: (1) frontier green innovations are concentrated in high-income countries, few in developing countries but growing; (2) the most technologically-sophisticated developing countries are emerging as significant innovators but limited to a few technology fields; (3) there is very little South-South collaboration; (4) there is potential for expanding green production and trade; and (5) there has been little base-of-pyramid green innovation to meet the needs of poor consumers, and it is too early to draw conclusions about its scalability. To promote green innovation, technology and environmental policies work best in tandem, focusing on three complementary areas: (1) to promote frontier innovation, it is advisable to limit local technology-push support to countries with sufficient technological capabilities - but there is also a need to provide global technology-push support for base-of-pyramid and neglected technologies including through a pool of long-term, stable funds supported by demand-pull mechanisms such as prizes; (2) to promote catch-up innovation, it is essential both to facilitate technology access and to stimulate technology absorption by firms - with critical roles played by international trade and foreign direct investment, with firm demand spurred by public procurement, regulations and standards; and (3) to develop absorptive capacity, there is a need to strengthen skills and to improve the prevailing business environment for innovation - to foster increased experimentation, global learning, and talent attraction and retention. There is still considerable progress to be made in ranking green innovation policies as most appropriate for different developing country contexts - based on more impact evaluation studies of innovation policies targeted at green technologies.

Climate Change Mitigation and Green House Gases --- E-Business --- Environmental Economics --- Environmental Economics & Policies --- Growth --- ICT Policy and Strategies --- Innovation --- Poverty Reduction --- Public Sector Development --- Science and Technology Development --- Technological Change --- Technology Industry

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The paper explores existing patterns of green innovation and presents an overview of green innovation policies for developing countries. The key findings from the empirical analysis are: (1) frontier green innovations are concentrated in high-income countries, few in developing countries but growing; (2) the most technologically-sophisticated developing countries are emerging as significant innovators but limited to a few technology fields; (3) there is very little South-South collaboration; (4) there is potential for expanding green production and trade; and (5) there has been little base-of-pyramid green innovation to meet the needs of poor consumers, and it is too early to draw conclusions about its scalability. To promote green innovation, technology and environmental policies work best in tandem, focusing on three complementary areas: (1) to promote frontier innovation, it is advisable to limit local technology-push support to countries with sufficient technological capabilities - but there is also a need to provide global technology-push support for base-of-pyramid and neglected technologies including through a pool of long-term, stable funds supported by demand-pull mechanisms such as prizes; (2) to promote catch-up innovation, it is essential both to facilitate technology access and to stimulate technology absorption by firms - with critical roles played by international trade and foreign direct investment, with firm demand spurred by public procurement, regulations and standards; and (3) to develop absorptive capacity, there is a need to strengthen skills and to improve the prevailing business environment for innovation - to foster increased experimentation, global learning, and talent attraction and retention. There is still considerable progress to be made in ranking green innovation policies as most appropriate for different developing country contexts - based on more impact evaluation studies of innovation policies targeted at green technologies.

Climate Change Mitigation and Green House Gases --- E-Business --- Environmental Economics --- Environmental Economics & Policies --- Growth --- ICT Policy and Strategies --- Innovation --- Poverty Reduction --- Public Sector Development --- Science and Technology Development --- Technological Change --- Technology Industry

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This paper explores differences and similarities across formal and informal microenterprises in Senegal. It uses a new national sample of more than 500 firms, of which two-thirds are informal and over 95 percent are micro-size, employing five or fewer full-time employees. The analysis finds that formal firms have average performance outcomes that are in the range of three to five times higher than informal firms. Formal firms are also more likely than informal firms on average to possess "good" characteristics, namely assets and uses of digital technologies that are positively correlated with productivity, sales, exporting, and employment. Despite these average differences, informal firms are highly heterogeneous, with a sizable number similar to formal firms in terms of both performance outcomes and good characteristics: the share of informal firms in the top productivity and sales deciles having good characteristics is substantial, and one-third of all firms in the high-performance cluster based on a data-driven combination of the four performance variables are informal firms. Importantly, several characteristics that are correlates of better performance (being in the top two clusters) for informal firms are identical to those for all firms in the high-performance cluster: having electricity, having had a loan, and in terms of uses of digital technologies, having a smartphone and using a mobile phone to communicate with suppliers and customers. However, a sizable number of high-performance informal firms are lagging in terms of good characteristics. That roughly half of formal firms and no informal firm had a loan implies that it is possible to be in the top performance cluster even without having access to such formal financing. That over half of formal firms in the top cluster as well as in the top decile of productivity and sales use inventory control/point of sales software as a management tool while only one informal firm does is both indicative of the small number of informal firms that use these technologies and suggestive of the potential for performance improvements if such technologies were used more widely.

Productivity accounting.

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This paper explores the use of digital technologies among informal micro-sized firms in Senegal, their association with productivity, sales, exports and jobs, and the role of age and gender dimensions of enterprise owners. The study uses a new national sample of over 500 firms, of which over 90 percent are not fully formal and over 95 percent are micro-sized, employing five or fewer full-time employees. The analysis finds that using a 2G mobile phone is significantly positively correlated both with productivity and sales, and using a smartphone is associated with an additional premium relative to using a 2G. The largest statistically significant conditional correlate of productivity, sales and jobs is a more specialized internal-to-the-firm management technology proxying for management capabilities more generally, namely inventory control/point of sales (POS) software. Use of digital technologies to facilitate external-to-the-firm transactions, namely using mobile money to pay suppliers and to receive payments from customers are also statistically significant conditional correlates of productivity and sales. Using a smartphone is also positively correlated with exporting (while using only a 2G phone is not). Finally, there are significant digital divides in the use of digital technologies across age and gender groupings.

Digital Divide --- Digital Economy --- Digital Technology --- Employment --- Employment and Unemployment --- Firm Productivity --- Inclusion --- Informality --- Information and Communication Technologies --- Information Technology --- Internet Access --- Microenterprises --- Private Sector Development --- Private Sector Economics --- Smartphone --- Social Protections and Labor