Job insecurity is a fact of life for young people

April 21, 2017

Kristalina Georgieva, Chief Executive Officer of the World Bank Financial Times

Shortly after graduating from university in Sofia, Bulgaria, at the age of 23, I was hired as an assistant professor. It was everything I had hoped for — intellectually challenging with a predictable career path all the way through retirement. Such were the certainties of the 1970s.

I wish it were as easy for today’s 23-year-olds.

But, sadly, it is not. One of the ironies of our times is that the world has never been wealthier — global GDP topped $75tn in 2016 — and yet there has never been so much anxiety over the future of work. It is particularly tough for the under-25s; they are about four times as likely to be unemployed as their elders. As life expectancy rises, so does the need for people of my generation to keep working, which is a further block to younger job seekers.

With the nature of work changing continuously, job insecurity is now a fact of life. Artificial intelligence and automation are eliminating a range of blue and white-collar jobs, from trucking to banking, affecting people in both rich and poor countries.

Achieving the UN’s sustainable development goal of full and productive employment and decent work for all by 2030 will be a tall order. We need to create at least 600m more jobs before that deadline to keep up with new entrants joining the market — and at least two-thirds of these jobs need to be in the developing world, where the youth population is growing fastest. If we fail, we will squander what ought to be a demographic dividend for developing economies.

It is important to note that jobs not only provide income, they also help workers connect to the society around them. This is especially important for young people in poorer countries and in regions torn by conflict.

At the World Bank Group we have invested in understanding country employment dynamics and how they affect youth. We know from our analysis that to tackle youth unemployment we have to create the right kinds of jobs in the right places, through investments that are both economically and socially profitable.

For example, while manufacturing and services were once routes out of poverty for millions of young workers, technological innovation is making those paths more difficult to take. Likewise, investment that is concentrated in capital-intensive industries that generate few jobs, like oil and gas, leaves workers trapped in temporary or informal labour.

In the parts of the world where youth unemployment is highest, agriculture is still the biggest employer. Two-thirds of Sub-Saharan African workers work in the agricultural sector, where productivity is low and earnings stagnant. They might improve their job prospects by moving to the city but without education and access to technology they have little hope of advancement.

What can we do to help?

The starting point should be education. All children need to go to — and stay in — school. Research shows the ability to learn throughout life, to adapt and to work flexibly, will be vital, as will technical, social, and critical thinking skills. Education has to adapt to help people become life-long learners.

" The world has never been wealthier, yet there has never been so much anxiety over the future of work "

Kristalina Georgieva

Chief Executive Officer of the World Bank

To enhance the employment prospects of the young — and meet the wants of the local market — we also need to improve the design of training programmes. In Argentina, the World Bank is helping the government strengthen and expand training for disadvantaged young adults. A programme we are supporting in Ivory Coast matches first-time workers to internship schemes that lead to permanent jobs with full benefits.

Second, governments need policies that encourage the private sector to generate more jobs. This includes investing in transport and digital infrastructure. We find that young companies are normally the most dynamic in creating good-quality jobs, but they also need the most help to get going. Governments should help young people start their own enterprises and link small businesses and farmers to larger markets.

Third, because it will take time to bring all businesses into the formal sector, for the foreseeable future many jobs for young people in developing countries will remain informal.

The challenge is to help informal workers and enterprises diversify and increase their productivity, and to connect them to marketing expertise and innovation to help their businesses grow. Universal social safety nets will also be critical so that benefits are not limited to workers in the formal sector.

There are clear steps we can take, but we have to work together — governments, the private sector, academia and civil society. As former UK prime minister Gordon Brown’s 2016 education commission report on financing global education noted: “Economies will rise or fall depending more on their intellectual resources than their physical resources.”

Preparing for the jobs of the future depends on the actions we take today, so that the defining technological, economic and demographic trends of this century will create opportunity rather than entrench inequality.

I want the 23-year-olds of tomorrow to feel the same hope for their future as I did when I left university.