In 2026, Development will be driven by Freelancers, Not Factories
The digital economy, e-sports and entertainment are driving huge economic change in the Global South. However, traditional development models fail to account for this shift. Many entrepreneurs still face walls of paperwork to open businesses or register for taxes. Streamlined, locally relevant policy, along with digitised public services, could help catalyse this development opportunities.
Development is simple. Increase taxes, reduce subsidies, cut ‘government waste’ and balance the books. At least, this seems to be the view taken by those who sit in the Washington offices of the International Monetary Fund.
After decades of running this experiment, it’s clear that it hasn’t worked. IMF recipients continue to pour their nation’s revenue into debt servicing, while the basic living standards of their citizens remain stagnant.
Kenya is a case in point; the Gen Z protests toppled the austerity-laden finance bill designed to abide by IMF guidelines. Kenya’s young people were right to reject economic policies dreamed up in foreign nations, designed for forgotten decades.
Today, the engine of development will not be the straitjacket of tax rises and aid packages. Instead, it will be digitisation, entrepreneurship and the creative economy.
For decades, multilateral institutions have assumed that development is driven by factories and export zones. However, the real growth engines in Asia and Africa are now found in culture, design, gaming, music, sport, digital services, artisanship, remote IT work, and creative production.
These new economic forces may be harder to quantify on a spreadsheet. Yet they are proving to be the most dynamic parts of many emerging economies.
Nigeria’s film and music industry employs 4.2 million people. The creative industry employs 15% of the workers in the Philippines. India’s e-sports market is valued at $107 million.
In fact, an UNCTAD survey found that the creative economy contributes up to 7.3% to GDP in developing economies, and employs up to 12.5% of the workforce. Yet the IMF still fails to systematically measure the impact of these industries on a country’s growth.
The beauty of the creative economy lies not only in its dynamism but in its accessibility. With the right regulation and digital infrastructure, they can be accessed by anyone with a smartphone, internet access and an idea.
Yet in many developing nations, the gateway to these industries is not education or start-up capital, but the clunky plumbing of bureaucracy.
A young entrepreneur who wants to open a business account often faces a wall of paperwork, most of which needs to be filed manually. A rural artisan wants to export pottery but gets stuck in customs. A creative worker could sell globally but cannot access a payment system or verify a business online.
Each unnecessary permission, each physical signature, each officer who “must approve” something, all create unnecessary chokepoints that stifle the most effervescent corners of growing economies.
My home country of Bangladesh is living proof of the power of these reforms. Once famously described as ‘basket case nation’ in 1971, Bangladesh’s life expectancy has increased by 26 years since that phrase was uttered.
So what have been the engines of this success? Of course, the garment industry has helped. However, alongside this, we have made simple government processes far easier.
Bangladesh has digitised many government functions, including land registration, utility payments and social protection enrolment. When over two-thirds of the population live in rural areas, avoiding travelling and queuing for paperwork has made many millions of people’s lives easier.
Fundamentally, any single ‘model’ of development will be subject to flaws. Real development requires local insight. For example, in many South-East Asian countries, female participation in the economy can be prevented by cultural norms. When women are given agency over finances, they are more likely to become economically active.
A recent proposal in Bangladesh is that of a ‘Family Card’, which would be issued to the women of the household. This would give them access to subsidised essential goods in times of inflation or natural disaster. As stated by the policy’s architect, Tarique Rahman, research shows that when women are given agency over finances, they are more likely to invest in family health and education, which itself results in income-generating activity. Tarique’s policy layout has another very important social aspect - it is to bring women into financial decision-making, something that is still not a regular practice in many developing regions.
These types of gender-targeted reforms cannot be separated from the fact that our female labour force participation has more than doubled since the 1990s.
Of course, Bangladesh’s garment sector rise is straight out of the IMF development textbook. However, our digital freelance base, often under-prioritised and indexed by the IMF’s models, has played an undeniable role in our economic rise. It is also far less exposed to supply chain disruption, as we discovered during COVID. Today, Bangladesh provides 15% of the world’s freelance digital workforce.
It’s time for a new development playbook. Instead of blindly accepting the received wisdom of IMF-imposed austerity, it’s time for developing nations to streamline their regulations, invest in digital infrastructure, and allow young entrepreneurs to flourish.
Deregulation does not necessarily result in environmental and human harm. Instead of a chainsaw, nations should rather take a scalpel to the regulations that block economic activity, while maintaining the laws that protect nature and workers’ rights.
Sometimes, the simplest policies are the most effective. Countries like ours can leapfrog outdated systems by simply putting everything online. Every point of physical contact with a government official doesn’t just shorten wait times. It eliminates another opportunity for extraction and corruption.
Digitisation bypasses that. When you prove that digital public services work, you encourage economic activity. This economic activity builds the type of tax revenue that doesn’t punish citizens, but uplifts them.
An entrepreneur who can open a business in ten minutes is a citizen who will hire, innovate, and pay taxes. A government that provides fast, transparent services is a government citizens can believe in. Digitising public services and streamlining regulations doesn’t just rebuild economies, it rebuilds trust in democracy.
One of the most potent examples of this can be found in Estonia. Emerging as a newly independent state in 1991 with few natural resources, a small population and little industry, Estonia made the strategic decision to treat internet access as essential digital infrastructure. Today, with a population smaller than Barcelona, Estonia has 10 unicorns, the highest per capita in Europe.
When we marry these streamlined, digital-first policies with the enormous, young populations found in many developing nations, the result could be explosive.
So what does a modern development model look like? Unlike manufacturing and refining, which require good credit ratings and high foreign investments, the new digital and entrepreneurship economies require a far less capital-intensive form of kindling.
Multilateral financing from regional development banks should funnel their funds towards digital infrastructure, which in turn could facilitate the digitisation of public services.
Equally, developing countries can untie their own shoelaces by digitising public services and streamlining simple processes for business and banking applications. Early digital education should be prioritised, digital entrepreneurship visas should be granted, and freelancer hotspots should be established.
Equally, institutions like the IMF should not be replaced, but updated. Global credit-rating and risk assessment models should be reformed, and have a ‘Cultural GDP’ benchmark baked in. Fundamentally, the IMF needs to bake the economic value of the digital and creative economies into their understanding of what drives development.
Yet finally, it’s time to acknowledge that models designed in Washington may simply not fit every country. Instead, developing countries must identify what their citizens do best. Then they must let them do it.
Ashfaq Zaman is an international affairs expert and the founder of the Dhaka Forum.
Photo by David Kwewum
