The global economy is still reeling under the impact of the recent financial crisis. Advanced and developing economies alike are grappling with the fact that the global economic recovery has not only been a jobless recovery, but also a weakening one. Although each region has its unique challenges, a common threat, which the global economy at large is facing, is rising unemployment—particularly youth unemployment.
The International Labor Organization recently published its Global Employment Trends for Youth 2013 report. According to the report, the global youth unemployment rate was estimated at around 12.6 percent in 2013, which is close to the peak crisis-level unemployment. An estimated 73 million youth, aged 15 to 24 were unemployed in 2013. The challenge is not limited to developing economies alone, which are home to close to 90 percent of the global youth population. In developed economies and the European Union too, youth unemployment was estimated to have increased by as much as 24.9 percent between 2008 and 2012. It is without doubt that an entire generation, across developed and developing economies alike, is facing the risk of lifetime unemployment with no access to an acceptable standard of living. Needless to say, this unprecedented crisis severely impacts the competitiveness and socio-economic growth prospects of nations at large.
The scale of the problem is too huge and too complex for any single stakeholder to work in isolation and hope to move the needle. Businesses, societies, and governments across the world must act together and act now to address the challenge. The challenge is not limited to employment but also employability. On the one hand, the slowing economic recovery is not creating enough ‘new’ jobs to cater to the large number of youth graduating every year and joining the ‘employable labor force’. On the other hand however, contrary to popular belief, millions of ‘existing jobs’ go unfilled due to the growing skills mismatch. In the U.S. alone, which is home to 11 million unemployed people, there are an estimated 4 million unfilled jobs, in view of the ‘employability’ challenge of the available talent.
Governments across the world have acknowledged the severity of the crisis and are working to alleviate the situation. The G20 nations, to begin with, are looking at tackling the unemployment challenge as one of the key priorities in their agenda. Businesses from within the G20 nations, which have formed the B20 coalition, are working closely with the G20 governments to develop business-led solutions to address the challenge. The short-term focus of these efforts is to foster job creation through economic growth and conducive macro-economic and labor market policies.
There is a concerted effort to promote apprenticeships and foster talent mobility at the inter-governmental level. National governments are focused on creating networks comprising the government, policy makers, business leaders, financial institutions, academia, training providers, and citizens. These networks enable all stakeholders to work together to cater to aspects such as: reskilling and continuous skilling, aligning the skill sets of the labor force to the needs of the industry, providing unemployed youth the support needed to find suitable apprenticeships and jobs, and also providing small and medium enterprises with access to credit which will allow them to scale their business and create more jobs.
In the long-term, in addition to all these efforts at the global and national levels, there is a strong need to promote the culture of entrepreneurship. Creating entrepreneurs allows job seekers to become job creators. Entrepreneurs also have the ability to leverage emerging trends to create business value and in the process, create more jobs. However, this is easier said than done. Governments, businesses, and academia need to work together to provide the conducive eco-system that promotes entrepreneurship. There are several interventions needed. For instance, Tier I and Tier II cities need to create entrepreneurship incubators supported by the government (conducive policies), businesses (technical and process expertise), and financial institutions (access to credit and angel investments) catering to the needs of budding entrepreneurs. To provide scale to the efforts of spreading the entrepreneurship culture, academic universities need to embrace and promote entrepreneurship. In emerging economies like India and China in particular, such interventions will play a crucial role in leveraging their demographic dividend, which would otherwise become a potential demographic burden.
The early signs are extremely positive. In India for instance, in several states, including the southern state of Kerala, universities have been actively promoting the entrepreneurship culture amongst its students. The Kerala University set up the Entrepreneurship Development Cell in its campus as early as in 2007 to create enthusiasm in entrepreneurship and also to provide a platform which brings the supporting stakeholders on board. The state government also announced the setting up of a state-of-the-art Technology Innovation Zone in the country’s first telecom business incubator—the Startup Village. The government has also allocated funds to support its flagship programme, Startup Village to Silicon Valley, which aims to build a bridge between the state and Silicon Valley.
These are only a few examples from the several pockets of excellence that exist across developing and developed economies. These early signs are very encouraging and are a step in the right direction. We certainly have a long way to go in our pursuit of addressing the challenge of structural global unemployment. There are no easy answers and one size certainly does not fit all. However, we need to continue our concerted efforts across and within governments with all stakeholders playing their part. This is the only way we can ensure that the youth of today’s generation get an opportunity to scripting and benefit from the growth story of the global economy.
S. Gopalakrishnan (Kris) is former Co-chair of the B20 Task Force on Employment, President of the Confederation of Indian Industries (CII), and Executive Vice Chairman, Infosys.
This article was originally published in the Diplomatic Courier's January/February 2014 print edition.
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Youth Unemployment and the Role of Entrepreneurship
January 23, 2014
The global economy is still reeling under the impact of the recent financial crisis. Advanced and developing economies alike are grappling with the fact that the global economic recovery has not only been a jobless recovery, but also a weakening one. Although each region has its unique challenges, a common threat, which the global economy at large is facing, is rising unemployment—particularly youth unemployment.
The International Labor Organization recently published its Global Employment Trends for Youth 2013 report. According to the report, the global youth unemployment rate was estimated at around 12.6 percent in 2013, which is close to the peak crisis-level unemployment. An estimated 73 million youth, aged 15 to 24 were unemployed in 2013. The challenge is not limited to developing economies alone, which are home to close to 90 percent of the global youth population. In developed economies and the European Union too, youth unemployment was estimated to have increased by as much as 24.9 percent between 2008 and 2012. It is without doubt that an entire generation, across developed and developing economies alike, is facing the risk of lifetime unemployment with no access to an acceptable standard of living. Needless to say, this unprecedented crisis severely impacts the competitiveness and socio-economic growth prospects of nations at large.
The scale of the problem is too huge and too complex for any single stakeholder to work in isolation and hope to move the needle. Businesses, societies, and governments across the world must act together and act now to address the challenge. The challenge is not limited to employment but also employability. On the one hand, the slowing economic recovery is not creating enough ‘new’ jobs to cater to the large number of youth graduating every year and joining the ‘employable labor force’. On the other hand however, contrary to popular belief, millions of ‘existing jobs’ go unfilled due to the growing skills mismatch. In the U.S. alone, which is home to 11 million unemployed people, there are an estimated 4 million unfilled jobs, in view of the ‘employability’ challenge of the available talent.
Governments across the world have acknowledged the severity of the crisis and are working to alleviate the situation. The G20 nations, to begin with, are looking at tackling the unemployment challenge as one of the key priorities in their agenda. Businesses from within the G20 nations, which have formed the B20 coalition, are working closely with the G20 governments to develop business-led solutions to address the challenge. The short-term focus of these efforts is to foster job creation through economic growth and conducive macro-economic and labor market policies.
There is a concerted effort to promote apprenticeships and foster talent mobility at the inter-governmental level. National governments are focused on creating networks comprising the government, policy makers, business leaders, financial institutions, academia, training providers, and citizens. These networks enable all stakeholders to work together to cater to aspects such as: reskilling and continuous skilling, aligning the skill sets of the labor force to the needs of the industry, providing unemployed youth the support needed to find suitable apprenticeships and jobs, and also providing small and medium enterprises with access to credit which will allow them to scale their business and create more jobs.
In the long-term, in addition to all these efforts at the global and national levels, there is a strong need to promote the culture of entrepreneurship. Creating entrepreneurs allows job seekers to become job creators. Entrepreneurs also have the ability to leverage emerging trends to create business value and in the process, create more jobs. However, this is easier said than done. Governments, businesses, and academia need to work together to provide the conducive eco-system that promotes entrepreneurship. There are several interventions needed. For instance, Tier I and Tier II cities need to create entrepreneurship incubators supported by the government (conducive policies), businesses (technical and process expertise), and financial institutions (access to credit and angel investments) catering to the needs of budding entrepreneurs. To provide scale to the efforts of spreading the entrepreneurship culture, academic universities need to embrace and promote entrepreneurship. In emerging economies like India and China in particular, such interventions will play a crucial role in leveraging their demographic dividend, which would otherwise become a potential demographic burden.
The early signs are extremely positive. In India for instance, in several states, including the southern state of Kerala, universities have been actively promoting the entrepreneurship culture amongst its students. The Kerala University set up the Entrepreneurship Development Cell in its campus as early as in 2007 to create enthusiasm in entrepreneurship and also to provide a platform which brings the supporting stakeholders on board. The state government also announced the setting up of a state-of-the-art Technology Innovation Zone in the country’s first telecom business incubator—the Startup Village. The government has also allocated funds to support its flagship programme, Startup Village to Silicon Valley, which aims to build a bridge between the state and Silicon Valley.
These are only a few examples from the several pockets of excellence that exist across developing and developed economies. These early signs are very encouraging and are a step in the right direction. We certainly have a long way to go in our pursuit of addressing the challenge of structural global unemployment. There are no easy answers and one size certainly does not fit all. However, we need to continue our concerted efforts across and within governments with all stakeholders playing their part. This is the only way we can ensure that the youth of today’s generation get an opportunity to scripting and benefit from the growth story of the global economy.
S. Gopalakrishnan (Kris) is former Co-chair of the B20 Task Force on Employment, President of the Confederation of Indian Industries (CII), and Executive Vice Chairman, Infosys.
This article was originally published in the Diplomatic Courier's January/February 2014 print edition.
