How empowering young workers can support global demographic and social change

26 January 2017

The world is currently facing two key demographic and social challenges that may pose significant challenges for governments and businesses. Firstly, the global population is growing fast, primarily in developing regions. Africa will add 850 million new workers to its workforce by 20501. Yet in many advanced countries, working age population growth is slowing down and, in many cases, is projected to be negative over the next few decades. By 2050, there will be 1.5 working age people for every one elderly person in Japan – in Nigeria there will be 15.

 

The second trend is rapidly rising inequality. The world’s 8 richest people now own as much wealth as the poorest half of the world’s population2. In this blog, we expand on our new ‘Empowering a new generation’ report and discuss why maximising the economic potential of today’s youth has never been more important to confronting these two key social challenges.

 

Old-age dependency ratio: the ratio of those aged over 65 to the working-age population aged 15-64

Megatrends blog

Larger working age populations could boost growth in developing countries, but only if enough jobs can be created for young people...

Emerging markets will only benefit from greater consumer markets and a larger potential workforce if people are engaged in valuable employment. Governments need to take a long-term view, ensuring all young people have access to quality education and training, enabling them to make productive contributions to the workplace in the long-run. They need to invest in infrastructure and technology and develop stable institutions - for example, a fair and efficient tax system and protection for property rights - which attract businesses and investment to support job creation for young people. In this way, developing countries can better nurture and, crucially, retain, the talent of young workers by providing them with more opportunities to prosper.

 

...While a shrinking workforce could be a drag on growth in advanced economies

The opposite challenge confronts governments of advanced countries. As people are living longer and having fewer children, populations are ageing at a rapid rate. Our Golden Age Index explores many of the ways in which governments and businesses can makes the most of an ageing workforce through initiatives like lifelong learning, but part of the answer may also lie with the young. A falling working-age population is heightening the need to maximise the economic potential of our young people to maintain a productive and innovative workforce.

 

Our Young Workers Index discusses how governments and businesses can empower young people and highlights the successful dual education systems of countries like Germany and Austria. By engaging students in vocational training alongside formal classroom learning, young people will gain valuable work experience, early employer interaction and widen their career options when transitioning into the working world. This will boost their engagement with work and hence their productivity, mitigating the impact of an ageing population.

 

Looking forward, empowering young workers with information around alternative career options and the flexibility to adapt to changing industries will also ensure ageing workforces are able to contribute productively to the economy in the long-run. Businesses should be encouraged to provide lifetime training for workers, ensuring they continue to have relevant skills to match evolving economies - technological developments and climate change, for example, are increasing the need to create diversified and dynamic economies.

 

Expanding educational and employment opportunities will also foster social mobility

Many of the policies discussed above will also confront growing social inequalities. A focus on vocational training will help alter cultural perceptions of apprenticeships and widen career pathways for young people as an alternative to higher education. In developing countries, universal access to education will help create a level playing field which offers all young people the opportunity to unlock their potential. Governments across the world should look ahead and act now, working with businesses to offer training, employment opportunities, and encourage innovation.  


1 UN population projections

2 Oxfam

David Tran | Economics & Policy Consultant
Profile | Email | +44 (0) 207 804 3991

 

More articles by David Tran

Hannah Audino | Economist
Profile | Email | +44 (0) 207 212 8746

 

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