The International Labor Organization estimates that 73.4 million youth were unemployed in 2013, and that youth were three times more susceptible to unemployment than adults. As a result, the role of formal education and training of youth in its influence on the quality and development of the workforce demands urgent attention. Private sector investment, alignment of employment skills, as well as education programs that feed into social stability will play integral roles in creating a more employable youth population and a fortified workforce.

World Youth Day will be celebrated in Krakow, Poland this year.

Why should the private sector invest?

In 2013, nearly 300 million young people were not in education, employment, or training (NEET). The private sector has a role to play in supporting employment-focused education, but investment in this space should be driven by self-interest—effective workforce development will result in higher profitability in the long run by increasing the overall capability, quality, and efficiency of the workforce. Keeping in mind the relative strengths of both the public and private sectors, there is a clear window to create shared value, allowing both business and communities to jointly prosper. Through increased public-private partnerships and supply of skills training programs, the private sector can offer input where the public sector is unable to through deeper social investment. By financing recruitment, promotion and training, the private sector can better link business and social interests. Moreover, it can make youth more employable by aiding with the management of Technical and Vocational Education Training (TVET) programs, lowering or removing barriers to entry for disadvantaged students, and alleviating other social obstacles faced by youth in need of further education.

How should we align employment demand with a supply of well-trained youth?

Aligning private sector demand for employment with the training and education of youth will be a critical driver of growth. According to UNESCO, approximately 57 million jobs are needed in the Arab States, South and West Asia, and Sub-Saharan Africa between 2012 and 2020. Creating these jobs requires nuanced approaches that address the following two dilemmas. First, in many developing countries, while a strong higher education system may exist, unemployment remains high. In Egypt, for example, the unemployment rate is high among youth. While the country’s 2010 unemployment rate was approximately 9.7 percent, unemployment among youth with tertiary education was 40 percent, surpassing those with primary education.

Second, in many countries, youth education rates are extremely low and unemployment is also high. The issue of skills-mismatching has exacerbated these problems by failing to maximize resources and capitalize on worker skill sets. TVET programs allow youth to gain highly-demanded skills required in the workplace. Providing a dual-track TVET model will better integrate the corporate perspective by prioritizing needed skills and accordingly prepare youth for a more successful entry into the workforce.

What is the link between youth employment and social stability?

In societies where social instability exists, there is often an assumption that unemployment and poverty causes violence amongst youth. The reality is  more complex.  Instability is fueled by societal injustices, including corruption and abuse by political elite.  When youth perceive that there is little hope for employment to improve their circumstances, and that an unjust social system has perpetuated this lack of opportunity, social instability increases.  Vocational training projects which offer skills to marginalized youth are thus critical for economic progress as well as overall security and stability. By providing youth access to employment, we allow them envision a better future—one in which they can pursue their ambitions, increase their faith in the political system, and avoid engaging in conflictual violence as a means of expressing dissatisfaction.

Preparing youth for the workforce by equipping them with more employable skills will contribute to their integration in the economy. There is a clear opportunity for the private sector to increase investment in workforce-driven education.

On April 23, 2015 CSIS will host its first ever Global Development Forum, a full day conference featuring leading global experts and practitioners who will discuss the world’s most critical development challenges and opportunities.  See the full agenda, including a discussion on capacity building for the global workforce, and register here.

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