Youth unemployment and global mismatch
Citing a “mismatch” between high youth unemployment across the globe and the dearth of qualified workers for many companies, corporate and civil society leaders at the World Economic Forum Annual Meeting 2014 called for a collaborative approach to seize the opportunity inherent in the problem.
In the presence of members of the Forum’s Global Shapers community – a worldwide network of socially engaged young people – leaders urged further incubation of creative ideas to train and invest in the 50 per cent of the global population under the age of 27.
The potential upside of better incorporating youth into the economy is enormous, said Robert Greenhill, Managing Director, World Economic Forum. For every percentage point increase in youth unemployment, $72 billion is added to global consumption.
“We’re trying to bring more entrepreneurs to the table,” said Maria Fanjul, Chief Executive Officer, entradas.com, Spain, and a Global Shaper, “to encourage young people to be owners of their lives”. She cited specific initiatives from her Global Shapers hub in Spain on teaching young people software skills. “Teaching kids how to code from an early age is as important for kids as maths or literature.”
Asked by Greenhill about his impression of the Global Shapers initiative, Muhtar A. Kent, Chairman of the Board and Chief Executive Officer, The Coca-Cola Company, USA, said: “I think it is one of the best things the World Economic Forum has done.”
Kent added: “Companies cannot just say we commit to this idea; we’ll hire another thousand interns.” He said they also need to exhibit “an action-biased agenda”. He also highlighted Coca-Cola’s 5by20 program, which aims to empower 5 million women entrepreneurs by 2020. As of December 2013, the program has reached 337,000. That is value both for Coca-Cola, he said, and for the communities themselves.
Klaus Kleinfeld, Chairman and Chief Executive Officer, Alcoa, USA, cited the other side of the unemployment equation: a McKinsey study that found that 57 per cent of employers complain there are not enough qualified candidates for certain work.
“Obviously, that is a mismatch, but that’s obviously an opportunity as well,” he said. Khalid A. Al Falih, President and Chief Executive Officer, Saudi Aramco, Saudi Arabia, agreed, pointing to his company’s efforts to fund vocational training centers to bring in high-skilled trainers. These efforts, Falih said, secure their supply chain, build goodwill and “will address a societal need”.
Expressing the need to avoid piecemeal solutions, Guy Ryder, Director-General, International Labour Organization, Geneva, called for systemic initiatives, mentioning Germany’s success as a model for the United States. However, he cautioned that youth unemployment is becoming long-term unemployment as about one young person in six in the OECD countries is neither in jobs nor in training. Ryder pondered whether apprenticeships, largely a thing of the past, might be revived as part of a broader solution.