* Any views expressed in this opinion piece are those of the author and not of Thomson Reuters Foundation.
Youth unemployment is the biggest global risk right now, and the opportunities to turn it around have great business potential. These are some of the conclusions presented in the new Global Opportunity Report. The report is the result of consultations with over 5.500 private and public leaders and aims to inspire and encourage leaders and companies to enter new markets that help make our planet a better place.
A generation wasted
“The youth unemployment rate here has been close to 30 percent for decades with no sign that things will improve”, a young woman from the MENA region points out in a recent video from ILO explaining global youth employment trends. While youth unemployment worldwide has dropped by 4.3% since the peak of the economic crisis in 2009, 73.3M young people still wake up jobless every morning. Conditions are worst in Southern Europe with a youth unemployment rate close to 60 percent in Spain and well over 50 percent in Greece. Spanish Prime Minister Mariano Rajoy has tried to implement apprenticeship schemes inspired by German models, but with modest effect. Meanwhile, young South Africans are walking the streets of Johannesburg and Pretoria in protest over rising tuition fees at South African universities that prevent the economically vulnerable from developing an adequate academic profile. Youth unemployment in South Africa has been above 50% for five years now. Add to that World Economic Forum’s predictions that digitalization of work processes will rob even more jobs in the years to come, the future seems bleak for youth around the world.
Getting youth to work is good business
But in the midst of crisis there are some opportunities emerging, and the hope for unemployed youth can be found in the digital sphere. The Global Opportunity Report reveals that both private and public leaders across the globe see great business potential in getting youth to work. Out of the 15 business opportunities presented in the report, leaders see the biggest business potential in those that deal with youth unemployment. One opportunity focuses on closing the skills gap among youth; another envisions the young as futurepreneurs who take control of their own careers; while the last one explores the emerging digital labor market.
The opportunities are symptoms of a paradigm shift in the labour market. Long-term employment and fixed work profiles are luxuries belonging to the past. Today, the march of unemployment is a reality and the rise of robots is consuming the middle layer of the labor market. According to the World Economic Forum, the fourth industrial revolution will lead to the loss of 7.1 million jobs by 2020. Yet “technology will spread like wildfire” as the World Economic Forum puts it, and allow e-learning, self-employment, and mobile work that transcends geographical boundaries. In other words, there will be less fixed jobs in the future but much more work.
Three opportunities to battle youth unemployment
These are the three opportunities to battle youth unemployment presented in the Global Opportunity Report:
Futurepreneurs. Entrepreneurs are leading job-creation globally, and avenues for fostering young entrepreneurs could take place through incubators in established companies, where young talent is given the chance to develop new ideas. Bringing entrepreneurship and the corporate world together is an opportunity to create jobs, new organizations and new ideas; moreover, it’s an alternative tool for fostering entrepreneurship aside from publically funded incubator initiatives. In rural areas, agribusiness incubators are already showing promising potential for job creation for youth.
Closing the skills gap. The mismatch between supply and demand of skills will increase according to current projections. However, businesses are uniquely positioned to provide youth with employable skills that match the needs of the labor market. Governments can incentivize business to offer apprenticeships and on-the-job training by re-thinking unemployment benefits, so businesses are compensated when they offer 'job training' to unemployed youth. It is a way for business to test potential future employees and develop a skills pipeline.
Digital labor market.Digital labor market could be youth’s big savior. Impact sourcing is on the rise and new business models are emerging. Companies such as Andela sources talent from Africa to address the current skills gap and shortage of software developers and programmers in the US. In fact, there are five job openings for every skilled software developer in the US, so the hunt for employees has to go global. This marks a shift away from traditional job outsourcing to a system of global job transition.
The opportunities have been developed in collaboration with 300 experts and leaders from all over the world. The Global Opportunity Report is released today, and freely available via the Global Opportunity Network website. Join the network on Twitter, Facebook or LinkedIn.
