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December 19, 2014

Sowing the seeds of prosperity: solutions to the youth employment crisis

Few economic issues so galvanize attention as does the contemporary focus on youth employment. In every corner of the world, both public and private leaders see the issue as central to both long-term economic progress and short-term political and social security. And with nearly 300 million unemployed or inactive youth around the world, there is good reason to be concerned about the short and long-term consequences of inaction or ineffective action. Long-term unemployment not only depresses life-long earning potential and robs the economy of skills and aggregate demand, it also creates the conditions for increases in crime, violence and social unrest.

A spell of prolonged unemployment can drain personal savings, force young people to delay moving out on their own, make it difficult to service ballooning student-loan debts and impair the ability to save adequately for retirement. A young person in the United States who has been unemployed for just six months, for example, can expect to earn about $22,000 less over the next 10 years than they could have expected to earn had they not experienced a lengthy period of unemployment. The impact, in turn, on both individual and society is profound. The global economy will feel the loss of aggregate demand in the form of slower growth and less job creation. Government programs and services could be compromised by depressed tax intakes and higher expenditures due to the increased need for government-provided health care and additional welfare payments. The private sector will be starved of the human capital it requires drive innovation and growth because long-term unemployment robs young people of the opportunity to gain the skills, experiences, and connections required to succeed in a modern work environment.

The challenge going forward is to sow the seeds for prosperity by creating the conditions in which young people hailing from diverse backgrounds, regions and income levels have equal opportunity to become fully-employed members of society. With that challenge in mind, the DEEP Centre has just released a report on addressing the youth employment crisis in conjunction with the Global Solution Networks program at the Martin Prosperity Institute. We have provided a slide summary below and the full report can be found on the GSN website.

The report argues that the problem of youth employment cannot be solved by governments alone. Nor can it be satisfactorily addressed by individual private enterprises or non-profit organizations. Instead, we need to mobilize networked responses that leverage contributions and resources from all sectors of society. The emerging networks featured in this report suggest it can be done with bold new approaches that harness the knowledge and ingenuity of diverse stakeholders through technology-enabled collaborations. In short, multi-stakeholder networks can succeed where isolated and uncoordinated efforts by various actors have so far failed.

As defined by the Global Solution Networks program, global solution networks (GSNs) are made up of diverse stakeholders that have organized to address a global problem, making use of digital technology, with governance that is self-organized. Numerous GSNs are drawing on the resources and competencies of diverse actors in society to prepare young people for today’s labor market and stream unemployed or underemployed individuals into meaningful employment opportunities. These networks highlight tangible examples of how policy makers and both civic and private-sector leaders can collaborate to create new pathways for skills development, entrepreneurship and policy creation that will underpin long-term solutions for youth employment. A shift in the public discourse away from an immobilizing focus on the scope of the problem to a more clearly articulated vision of the promise of multi-stakeholder solutions and the key elements required to build effective global solution networks is necessary. Moreover, solving the world’s youth employment challenges means placing youth at the heart of the problem-solving process, not only as recipients of programming and funding, but as the architects of sustainable solutions for long-term entrepreneurship and employment.

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The Centre for Digital Entrepreneurship and Economic Performance turns research findings into practical insights and tools for stimulating innovation, entrepreneurship and job creation.