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Davos 2012: Youth unemployment 'disaster' | Davos 2012: Youth unemployment 'disaster' |
(about 9 hours later) | |
By Tim Weber Business editor, BBC News website, Davos | By Tim Weber Business editor, BBC News website, Davos |
Davos is used to bluster from political leaders. But when usually quietly spoken company bosses from all corners of the earth warn of "not a crisis, but a disaster," when they call something a "cancer in society," you know we have a problem. | Davos is used to bluster from political leaders. But when usually quietly spoken company bosses from all corners of the earth warn of "not a crisis, but a disaster," when they call something a "cancer in society," you know we have a problem. |
The world, they say, is "sitting on a social and economic time bomb". The world is plagued by youth unemployment. | The world, they say, is "sitting on a social and economic time bomb". The world is plagued by youth unemployment. |
The numbers are stark: In some countries of the Arab world, up to 90% of 16-24 year olds are unemployed. In the United States the youth unemployment rate is 23%. In Spain nearly 50%. In the UK 22%. | The numbers are stark: In some countries of the Arab world, up to 90% of 16-24 year olds are unemployed. In the United States the youth unemployment rate is 23%. In Spain nearly 50%. In the UK 22%. |
Worldwide, some 200 million people are unemployed. 75 million are between 16 and 24 and every year about 40 million young people are entering the workforce. | Worldwide, some 200 million people are unemployed. 75 million are between 16 and 24 and every year about 40 million young people are entering the workforce. |
'Unemployment sucks' | 'Unemployment sucks' |
The business leaders at the World Economic Forum (WEF) know why it matters: Young people who were unemployed for a long time will earn less throughout their whole lives. | The business leaders at the World Economic Forum (WEF) know why it matters: Young people who were unemployed for a long time will earn less throughout their whole lives. |
They will be less employable. They won't have the skills that business needs. They are more likely to have long-term health problems. And it can cause social unrest. | They will be less employable. They won't have the skills that business needs. They are more likely to have long-term health problems. And it can cause social unrest. |
There's a term for it: Lost generation. Or as one business school professor puts it: "Unemployment sucks. Youth unemployment sucks even more." | There's a term for it: Lost generation. Or as one business school professor puts it: "Unemployment sucks. Youth unemployment sucks even more." |
"The youth has lost a line of sight to the future." | "The youth has lost a line of sight to the future." |
Running out of talent | Running out of talent |
And bosses really do care about these things, even the most cold-hearted ones, because all of the above costs money - indirectly because of lower demand for their products and services; directly in training and healthcare costs, and higher taxes. | And bosses really do care about these things, even the most cold-hearted ones, because all of the above costs money - indirectly because of lower demand for their products and services; directly in training and healthcare costs, and higher taxes. |
Then there is demography. In Jordan, about 70% of the population is under the age of 30. If the youth is not fit for the workplace, the country will run out of talent soon, said a participant. | Then there is demography. In Jordan, about 70% of the population is under the age of 30. If the youth is not fit for the workplace, the country will run out of talent soon, said a participant. |
And, believe it or not, many chief executives here really care passionately about the issue. | And, believe it or not, many chief executives here really care passionately about the issue. |
Again and again during the Davos meeting, executives raised the issue of youth unemployment. | Again and again during the Davos meeting, executives raised the issue of youth unemployment. |
For politicians, the Arab Spring is still fresh in people's minds. | For politicians, the Arab Spring is still fresh in people's minds. |
The uprisings started in Tunisia, when Mohamed Bouazizi set himself on fire: "He killed himself not because he wanted to make a political protest, he killed himself because he didn't have a job," said an investment fund manager from Pakistan. | The uprisings started in Tunisia, when Mohamed Bouazizi set himself on fire: "He killed himself not because he wanted to make a political protest, he killed himself because he didn't have a job," said an investment fund manager from Pakistan. |
Making a difference | Making a difference |
The WEF's organisers love to demonstrate that their huge network - a unique combination of big business, government, social entrepreneurs and non-governmental organisations - can make a difference. | The WEF's organisers love to demonstrate that their huge network - a unique combination of big business, government, social entrepreneurs and non-governmental organisations - can make a difference. |
A workshop was set up to pin down what causes youth unemployment, and whether there might be some quick-win solutions to tackle the problem. | A workshop was set up to pin down what causes youth unemployment, and whether there might be some quick-win solutions to tackle the problem. |
In line with Davos rules I can't quote people by name, but whoever spoke, it was obvious to participants that the problem defies straightforward solutions. | In line with Davos rules I can't quote people by name, but whoever spoke, it was obvious to participants that the problem defies straightforward solutions. |
Of course, all unemployment has one thing in common: a lack of demand for workers. | Of course, all unemployment has one thing in common: a lack of demand for workers. |
But every country, every region has different problems. | But every country, every region has different problems. |
Automation replaces many routine jobs, not just in developed countries. There are structural problems, for example when it's just too bureaucratic to hire somebody. | Automation replaces many routine jobs, not just in developed countries. There are structural problems, for example when it's just too bureaucratic to hire somebody. |
The education system can be to blame, failing to give youngsters the skills that are needed for jobs in advanced economies. | The education system can be to blame, failing to give youngsters the skills that are needed for jobs in advanced economies. |
In South Korea, it's the other way round. So many people are university graduates, the country is running out of people to fill blue-collar jobs. | In South Korea, it's the other way round. So many people are university graduates, the country is running out of people to fill blue-collar jobs. |
Then there are life skills, or rather the lack of it. Some youngsters don't know the basics, from getting on with co-workers to having basic entrepreneurial skills. | Then there are life skills, or rather the lack of it. Some youngsters don't know the basics, from getting on with co-workers to having basic entrepreneurial skills. |
Sometimes, better schooling could have provided a fix: In China, most delivery drivers can read only Chinese, which makes them unemployable for global logistics companies who deliver parcels and mail arriving from around the world. | Sometimes, better schooling could have provided a fix: In China, most delivery drivers can read only Chinese, which makes them unemployable for global logistics companies who deliver parcels and mail arriving from around the world. |
Then there are cultural issues. Some countries educate large numbers of women to university level, only for them to be denied work opportunities, wasting their talents. | Then there are cultural issues. Some countries educate large numbers of women to university level, only for them to be denied work opportunities, wasting their talents. |
Search for solutions | Search for solutions |
So what to do? | So what to do? |
"The private sector could be a game changer in this," said a participant. But you're in Davos, that's what capitalists say, you may counter. Except that the speaker is fairly left-wing and works for an education campaign group. | "The private sector could be a game changer in this," said a participant. But you're in Davos, that's what capitalists say, you may counter. Except that the speaker is fairly left-wing and works for an education campaign group. |
And it's a theme that comes up again and again: Businesses, universities and schools, governments and non-governmental organisations fail to talk to each other about what they need and what they can deliver. | And it's a theme that comes up again and again: Businesses, universities and schools, governments and non-governmental organisations fail to talk to each other about what they need and what they can deliver. |
"Universities are just too slow," said one industrialist. "If I tell them that I need graduates with different skills, it takes them two years or more to change their courses. By then technology will be changing yet again." | "Universities are just too slow," said one industrialist. "If I tell them that I need graduates with different skills, it takes them two years or more to change their courses. By then technology will be changing yet again." |
Celebrating failure | Celebrating failure |
However, another boss warned that "a good education does not guarantee you a good life anymore." | However, another boss warned that "a good education does not guarantee you a good life anymore." |
Whether they were from the Arab world, the North, from Latin America or Asia, many executives bemoaned the lack of entrepreneurial drive and basic business skills. | |
Ultimately, though, the problem comes down to demand. | Ultimately, though, the problem comes down to demand. |
The man in charge of a firm with several hundred thousand staff around the world complained that, "we live in a world where wealth creation is uncoupled from job creation. This once close connection is ruptured." | |
Big steps, small steps | Big steps, small steps |
While some suggested the creation of huge programmes, with $50bn (£32bn) spent over 10 years to train young people around the world, others proposed smaller steps with more guarantee of success. | While some suggested the creation of huge programmes, with $50bn (£32bn) spent over 10 years to train young people around the world, others proposed smaller steps with more guarantee of success. |
Too many young people were lacking role models in their own families. Sending successful university graduates back to school to teach for a couple of years would provide the inspiration that many teenagers were lacking. Some countries, especially the United States, had shocking high school drop-out rates. Mentorship programmes for entrepreneurs were proposed, as was help with job mobility. | Too many young people were lacking role models in their own families. Sending successful university graduates back to school to teach for a couple of years would provide the inspiration that many teenagers were lacking. Some countries, especially the United States, had shocking high school drop-out rates. Mentorship programmes for entrepreneurs were proposed, as was help with job mobility. |
Too many companies also had neither the resources nor the knowledge to grow their business at speed. | Too many companies also had neither the resources nor the knowledge to grow their business at speed. |
And maybe the incentives were not right. How about a tax system that rewards the creation of long-term jobs, asked one participant. | And maybe the incentives were not right. How about a tax system that rewards the creation of long-term jobs, asked one participant. |
As the afternoon wore on, again and again Davos man and woman remarked: "There's no simple solution." | As the afternoon wore on, again and again Davos man and woman remarked: "There's no simple solution." |
Ten for ten | Ten for ten |
In a small way, the forum has indeed got the ball rolling. A working group of forum members recently launched the Ten programme - "train, employ, nurture". | In a small way, the forum has indeed got the ball rolling. A working group of forum members recently launched the Ten programme - "train, employ, nurture". |
Forum members are encouraged to employ 10 young people aged between 18 and 24, and train them, give them life skills, start-up skills, and - most importantly - give them a mentor to help them shape their future. | Forum members are encouraged to employ 10 young people aged between 18 and 24, and train them, give them life skills, start-up skills, and - most importantly - give them a mentor to help them shape their future. |
The programme is in its early stages, with two pilot projects in Indonesia and Cambodia. | The programme is in its early stages, with two pilot projects in Indonesia and Cambodia. |
And for now the companies are probably cherry-picking candidates. So far only 1,000 young people are in the programme. But on the upside some 80% go on to stay with the company. | And for now the companies are probably cherry-picking candidates. So far only 1,000 young people are in the programme. But on the upside some 80% go on to stay with the company. |
But why just 10 youngsters per company, the organisers were challenged. | But why just 10 youngsters per company, the organisers were challenged. |
Simple psychology, they replied. Go beyond 10 people, and companies will find it too much of a commitment to join the scheme. | Simple psychology, they replied. Go beyond 10 people, and companies will find it too much of a commitment to join the scheme. |
Once the first unemployed are in their placement, many companies start asking for more. | Once the first unemployed are in their placement, many companies start asking for more. |
It's just another small step. But tackling youth unemployment, said one executive, "is critical to all our futures". | It's just another small step. But tackling youth unemployment, said one executive, "is critical to all our futures". |
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