Elevating the Ceiling and the Floor for Inclusive Growth

By Vincent Chin and Dwaa Osman

In a bustling town in Malaysia, a small-scale farmer faced the harsh realities of economic disparity. Despite working tirelessly on his farm, he struggled to provide for his family and secure a future for his children. Meanwhile, in the nearby city, high-tech industries thrived, attracting investments and generating wealth. This stark contrast between this farmer‘s daily struggles and the booming city economy highlighted a crucial question: How can a nation ensure that growth benefits everyone, not just a few?

?This question is at the heart of inclusive growth—a strategy that seeks to uplift every segment of society while fostering robust economic development. As countries strive for development, leveraging industrial policies and cluster strategies can certainly elevate economic growth by capitalizing on core strengths. However, growth must be inclusive to truly transform a nation - a society where everyone, regardless of their background, has the opportunity to succeed. In that sense, sustainable development aligned with the UN Sustainable Development Goals (SDGs) requires a dual focus: not only raising the economic ceiling but also lifting the floor to ensure inclusive growth.

To help your top performers grow further and to elevate the most disadvantaged layers of society, we propose a three-step solution:

1. Step Up - Maximizing Economic Growth at Scale

2. Step In - Ensuring Inclusive Growth

3. Step Change - Delivering Impact at Scale

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Step Up - Maximizing Economic Growth at Scale

Imagine a country where starting a business is as easy as planting a seed, with everyone able to share in the benefits of economic growth. Achieving this requires a holistic approach that supports business expansion while ensuring inclusivity.

To maximize growth, we need to foster business-friendly competition, expand specialized economic zones, and promote cross-sector synergies. These accelerators create a fertile environment for diverse industries to thrive. Additionally, Free Trade Agreements (FTAs) can expand market access, but must be designed to include local communities and SMEs, ensuring they benefit from international opportunities.

Inclusivity is key from the start. Upskilling and reskilling programs ensure opportunities are available to all as the economy evolves. Innovation and entrepreneurship policies must be accessible to everyone, helping to spread the benefits of high-tech advancements beyond isolated hubs. Inclusive innovation, like Kenya’s M-PESA, shows how tailored services can transform entire communities and drive widespread economic inclusion.

Step In - Ensuring Inclusive Growth

Real, lasting benefits require not only building an inclusive foundation but also addressing key challenges: bridging employment gaps, reducing in-work poverty, and improving job quality.

Education and skills development play a central role in expanding access to quality jobs, which drives growth and reduces inequality. Large-scale upskilling initiatives are essential to creating a competitive workforce, starting with early childhood programs and extending through effective school-to-work transitions, supported by private-sector partnerships.

Equally important is affordable healthcare, which supports wellbeing and allows people to pursue education and careers. Investments in clean water and digital connectivity, especially in rural areas, are also vital for fostering inclusive growth.

By aligning social interventions with economic policies, policymakers can create a comprehensive growth strategy that bridges gaps and promotes equity.

Step Change - Delivering Impact at Scale

Achieving large-scale impact requires a transformative approach. Picture a government running efficiently like a well-oiled machine, overcoming typical hurdles like siloed work, lengthy approvals, and underfunding.

Key enablers include technology, streamlined decision-making, and a lean organizational structure. A "Think big, start small, scale fast" approach helps ensure ongoing success. For example, building strategic infrastructure for logistics, transportation, and digital services can boost confidence in capital markets and drive green growth, as discussed in our publication on Supporting Economic Clusters in the Green Transition.

Our research over the years solidifies the fact that ensuring all segments of society benefit from economic progress, is essential for sustainable development. Reflecting on the farmer‘s story, we see the potential for transformation when governments focus on the ceiling and the floor, together. With the right strategies in place, we can build a world where every individual, regardless of their starting point, has the opportunity to thrive and contribute to individual and societal success.