Why do we need a Global Coalition for Youth Employment?
by Jeremy Lefroy, MP for Stafford, United Kingdom, Chair of the Parliamentary Network on the World Bank
In Calais, earlier this year, I met with some young African and Asian women and men hanging around, eager to come to the UK to get a job and kickstart their lives. Their faces and their stories impressed upon me the absolute priority of creating decent jobs and livelihoods for smart young people like these back home in their own countries. Because each one of them agreed: if such jobs existed in their home countries, they would not have had to undertake the perilous journey to Europe.
We, in the OECD DAC countries, along with the private sector, institutions like the World Bank and IMF + LIC Governments and youth themselves – need to do much, much more to address the priority of creating jobs for young people.
You will read in this booklet of those from each sector who are doing just this. The Mastercard Foundation is leading the way with its commitment to enabling 30 million African youth, especially young women, to secure dignified and fulfilling work by 2030. (see page 68) But every contributor has an important story to tell. The purpose of our Campaign is to draw all these lessons together, and work with individual governments and their local stakeholders to create a bespoke suite of policies that will create thousands of new jobs for youth in their own specific context.
This has been a passion of mine all my working life. I have seen international cooperation on malaria, and other diseases such as HIV/AIDS and TB, achieve extraordinary results in less than 20 years through the Gates Foundation, the Global Fund, Medicines for Malaria Venture and other initiatives. It is estimated that we will need to create 600 million new jobs in the next 10-15 years to meet the demand of a growing population. The potential consequences of failing to create them are clear – increased poverty, forced migration and conflict. So more international cooperation around the creation of jobs and livelihoods for young people has to be a priority for all of us.
Last year, I met Ronald, a young Ugandan tech entrepreneur. After losing his parents, he paid his way through school and university through farming. He is now developing apps for use in agriculture and providing work for several young Ugandans. But not only that, he is sharing his knowledge and skills with many others so that they too can find work or set up on their own. When I visited their offices with Nathan Nandala MP, my colleague on the Board of the Parliamentary Network, it was a hive of creative activity and an inspiration to us both.
It is people such as Ronald and his colleagues who will be playing a key role in creating these jobs. They can see what is required and have the energy, commitment and skills to achieve it, not just for their own future but for that of their fellow countrymen and women. Involving young people in this campaign is not just a nice thing to do: it is essential to generating the energy and creativity that will ensure its success.
For young people have an endless capacity to surprise – as you will read in these pages: who would have thought a couple of Tunisian brothers would have created the first car to be designed and built in Africa: the Wallyscar. Who would have thought a 16-year old Ugandan would have started a Venture Capital company to support his peers to create their own companies – or a 22-year old Brazilian woman would start a movement of young entrepreneurs that created over a thousand companies in its first ten years of operation?
But young people need more support, more finance and more training as well as governments which are open and friendly to enterprise. They need an education system which teaches the skills to do market research, to identify business opportunities, and acquire the skills to create and grow new companies successfully.
I have seen several governments working to teach work-readiness in schools, to create better access for young people to small business micro-finance and to appropriate technical training and apprenticeships. They also recruit youth to work on public works programmes to improve infrastructure and introduce active labour market policies(ALMPs) to create more business-friendly environments. Some are successful, some less so.
The Global Campaign for Youth Employment will highlight why some of these are successful, and some are not. Its aim is practical: to secure increased inward investment and policies that create job growth, and not just wealth growth. It will act as a clearing-house for information on which policies are effective, and which are less effective, in creating good, satisfying and sustainable jobs and livelihoods for the rapidly expanding youth populations of Low Income Countries(LICs). And it will encourage LIC governments, donors, international institutions, private sector companies, educators and youth themselves to work together and do much, much more to make youth job creation a major policy priority in the coming years.
Only in that way will the young men and women I met in Calais earlier this year be enabled to live fulfilling lives in their home countries and not be tempted to risk perilous journeys to escape poverty.
How Would a Global Coalition for Youth Employment Work?
- To promote policies that will help UN Member states deliver on their UN SDG 8, Goal 5 promise to “achieve full and productive employment for all…”
- To continue to push youth job creation ideas and policies higher up the agendas of all politicians, business leaders, NGOs, educators and young people;
- To emphasise the importance of multiple, integrated interventions: the Systems Approach which involves implementing several policies simultaneously.
- To forge, and energize, partnerships between stakeholders, because youth job creation cannot be achieved by any one stakeholder alone;
- To ‘accentuate the positive’ and promote solutions:
Let’s examine those goals in more detail:
ONE: “Full Employment” – actually means about 3% unemployment because of the normal churn of people changing jobs, taking time off for sabbaticals etc. Some experts now equate unemployment rates of 4, 5 or 6% as justifiable definitions of full employment. The key word, for Low Income Countries, is ‘productive’: for many millions of people in these countries, young and old, find themselves under-employed or as working poor – not earning enough to feed and keep their families in good health.
TWO: Prioritise Youth Job Creation: Many more people and agencies are talking about youth job creation than they were ten years ago but there is very little additional investment in the field. The private and public sectors know that profits, and solvency, are better driven by reducing pay-rolls than increasing them. So job-rich growth must be prioritised for political and social reasons, not purely financial ones.
THREE: The Systems Approach: Many governments and institutions persist with piecemeal solutions – a little skills training here, some wage subsidies there. It is only by reviewing all possible policy solutions together and implementing as many as are appropriate simultaneously, that jobs will be created at scale across a nation or region.
FOUR: Forging Partnerships: Creating jobs is not something that can be done by governments alone. Yes they must lead – but they must work in partnership with NGOs, business leaders, educators and young people themselves. And we must look East, West and North – South to see what other countries are doing. For as the crisis of youth unemployment bites deeper all over the world, solutions of all kinds are popping up everywhere. The most important partnership is with youth themselves: teachers and adults must level with them and explain the full extent of the problem. And they must give them the skills and the confidence that will enable them to be part of the solution.
FIVE: Promoting Solutions: people are right to be scared at the scale of the problem –
- The need to create 6 million jobs a month, a million a month in Sub-Saharan Africa alone!
- A billion new jobs by 2030 just to maintain unemployment at current levels.
- 2 to 3 billion more by mid-century as tens of millions of traditional jobs disappear to digitization, automation and robotics; – and –
- The need to teach new skills and self-learning techniques as the World Economic Forum estimates that “65% of children entering primary school today will ultimately end up working in completely new job types that don’t yet exist.”
But failure is not an option: if we are going to keep bringing young people into the world, it is our duty to create decent jobs for them to do when they grow up. So: “Don’t tell me it’s impossible. Show me a solution!”
That’s what our campaign is designed to do.
How? – the Layer Cake approach…
There are several key features of a Systems Approach to Youth Job Creation and the contributors to this booklet outline several of them. But first, it may be helpful to consider the layer cake approach which separates their solutions into 4 x vital “Layers” of activity, thus:
Layer ONE: Massively increase inward investment: It is axiomatic that, as a country gets richer, the share of the labour force working the formal waged sector rises, and the number working in self-employment or the informal economy declines. So, as DFID SoS, Penny Mordaunt, says in her Introduction (see page 7) – DFID is “working hard to deliver on the need for large scale productive investment.” Only this will increase the number of formal jobs available to youth. And, as the Economist points out (see page 47), this must go hand-in-hand with deregulating labour markets: “countries that let business cartels curb competition, place high taxes on labour, enforce high minimum wages or impose regulations that make it hard to fire people, are bad places for the young jobless.”
Layer TWO: Improve Skills Training: A USAID official famously said: “Training programmes are the crack cocaine of the youth employment field: we’re addicted to them!” As Louise Fox points out in her paper (page 40), skills training for jobs that do not exist is a waste of money. She, and the Economist argue for better skills-matching and Julia Deans argues for more skill training to be done in schools. (page 90) Basic skills – reading, writing, numeracy – are important, but PCI has shown that mobile apps and visual techniques can allow entrepreneurship to flourish in the absence of such skills. And Teach a Man to Fish (page 77) shows how school-based enterprises can both teach young people entrepreneurial skills and help to finance the school. Jonathan Pfahl (page 74) points out the importance of mentorship, and Ocheck Msuva (page 94) highlights the importance of career and life-planning guidance – and its almost complete absence from Low Income Countries.
Layer THREE: Engage the Private Sector: As 80 to 90% of new jobs will be created by the private sector, and taxes paid by private companies pay for 100% of public sector jobs, the private sector is key to new job creation. McKinsey and others point out that many private sector companies complain that government education and training systems do not deliver the employees they need. The World Bank finds that private companies deliver better training than the public sector. They are also the sector that must be persuaded to invest in job-rich growth. Usually, they also provide the first experience of business that allows young entrepreneurs to develop the courage, and the vision, to start their own enterprises. On page 80, Chris Nassetta offers a private sector perspective on youth job creation training and the need to show young people what different business sectors have to offer. And Bill Reese of the International Youth Foundation explains why life skills training is often the key to success in finding, and retaining, a job in the private sector.
Layer FOUR: Create a bespoke suite of Demand- and Supply-side Policies at scale: The top layer of the cake is perhaps the most interesting as it includes the myriad of little things that any government can do often at very little, or no, cost. Initially, the Campaign will focus on these as we find many governments, youth and private sector companies are not aware that such policies exist. In our policy store, we have over 200 different policy products: they may be clustered under the following headings:
- Involve youth! As Ulla Tørnaes argues, on page 22, “Youth are experts in their own aspirations. Fostering an intergenerational dialogue can help unleash these aspirations, and translate them into viable and realizable achievements.” Youth Unemployment is a youth problem so Priority 1: engage youth in solving it.
- Entrepreneurship education – at every level in every school. But beware! There is both effective and ineffective entrepreneurship education: it needs to be carefully calibrated to fit the needs of the country, region and/or local economy.
- Basic Skills Training: all the evidence suggests that it is easier for youth who read and write to get jobs – but many youth in Low Income Countries emerge from several years of schooling without these basic skills. So – Education quality has to improve.
- Extra-curricular Business Plan Creation Training: teach practical business creation skills in schools out of school hours;
- School Enterprise and Self-financing Schools – experiential learning of running a business at schools both teaches youth business skills and helps to pay their teachers’ salaries;
- Comprehensive career guidance – for all students at all levels in schools and universities. Students need to know the shifting realities of the labour market that lies beyond the school gates, so that they and their parents can plan and navigate their education paths accordingly.
- Apprenticeships, part-time jobs, dual systems of education and work experience – for all students. Don’t copycat exactly the Austrian, Swiss and German programmes but adapt and re-create them until you replicate their success in your own local context.
- 21st century skills training: include green tech, IT & computer skills, 3-D printing etc. in all national education provision;
- Enable Youth Access to Capital – via loan guarantees, equipment leasing, stock or rent credit etc. As Lina Useche says on page 97, “It is imperative to create innovative ways to support young people who want to start their own business to gain access to credit.”
- Enable Youth Access to Mentorship – often the key to the success or failure of a youth-led business start-up; (see page 74)
- Simplify Business Registration Procedures – to enable new businesses to register at close to zero cost;
- Active Labour Market Policies – break up the cartelization of different industries
- Job-creating Networks: create jobs clubs and enterprise networks to help youth learn from each other;
- Business Plan Competitions: popular, and effective, ways of building entrepreneurship
- Empower & support young women into decent jobs – it is their human right + female empowerment grows economies by up to 25%, as Ulla Tørnaes reports. (see page 25)
- Create Jobs for the disabled – young people with physical or mental disabilities can grow economies too;
- Government-led initiatives – wage subsidies, tax breaks, preferential procurement from youth-led business start-ups, EU-Nordic style youth job guarantee schemes, expanded public works programmes, large-scale infrastructure projects – all are great job creators and develop skills and good work habits amongst young people.
There are hundreds more policy solutions and detailed studies of Active Labour Market Policies (ALMPs) which the Campaign can explore with partners – on both the demand and supply sides. The Campaign’s goal is to learn and share experience, good and bad, then explore with individual governments and stakeholders within each country to develop a suite of policies appropriate to their local / national context.
Further, this challenge is so important and so difficult, we must not have any secrets. Actual training materials may be copyright, but ideas and evaluations need to be shared. We will seek radical transparency from all our partners and openly explore how to adapt a policy intervention successful in one country to fit the context of another.
Schedule of Work
There is an immense body of learning gathered by organisations like the World Bank, the Commonwealth Youth Division, the ILO and practitioner agencies. In this booklet, we re-publish Jamie McAuliffe’s excellent Aspen Institute study of the landscape of youth job creation initiatives, funding sources and platforms (see page 62). However, there has been no exhaustive study of the youth job creation policy interventions carried out by OECD-DAC member agencies or those carried out by individual country governments. As donors, and everyone else, needs to know what others have been doing in this field, a bench-marking study of what each DAC ODA has done – and how effective each intervention has proved – is Job One for this campaign.
We shall provide PN Members, and other stake-holders, with honest and informed evidence, written in crisp, accessible language, of what has worked well, what worked less well – and which interventions are the most cost-effective.
Armed with this information, we shall then pursue the following 3-stage approach:
Task ONE: Bench-marking: the GCYE will first find governments that share our passion to reduce youth unemployment. We will work with them, and other partners, to identify which policy solutions they are currently implementing, where the gaps are, and the areas in which policy delivery can be improved.
In researching this booklet, we interviewed one government representative who bewailed the fact that his government had, on the advice of many experts, invested heavily in expanding tertiary level education, only to find that there were now more unemployed university graduates than unemployed primary or secondary school leavers. This same official complained that, though they had sought to introduce entrepreneurship education, they had yet to find an effective model appropriate for his country.
Such specific challenges will be explored by the campaign through the eyes of five different stakeholder groups: 1) government; 2) the private sector; 3) donors and investors; 4) educators, academics and practitioner professionals; 5) youth themselves. Combining scores and assessments from each stake-holder will give policy-makers a comprehensive snapshot of the status of youth job creation policies in their country.
Task TWO: Prepare a policy prospectus: The second task will be to work with interested governments to build out of the bench-mark study a prospectus of polices, tailored to national needs. Each will seek to maximize the number of decent youth livelihoods created while also growing each nation’s economy and increasing their tax revenue. The prospectus will draw on the ideas and views of all five stakeholder groups – shaping and re-shaping the suite of policies until all buy into a common and agreed Systems Approach.
Task THREE: Implementation: Armed with a few carefully worked up Country prospectuses from both Low- and Middle-income countries, the campaign will work with each country’s government and stakeholders to mobilise the resources, recruit and train the necessary personnel and oversee the initial implementation of the suite of policies at local, regional and national levels, working with other agencies to capture the learning from each stage of the work. By working with existing institutions and youth themselves, the campaign will keep the cost of implementation as low as possible. A key element of the campaign is to enable the implementation of each country programme to be self-sustaining within a time period of no more than 10 years.