Youth unemployment is a global issue. Approximately 74 million young people (15 – 24) are unemployed globally. In Europe the figure is around 4.5 million. Spain, Greece, Italy and Croatia each have youth unemployment rates exceeding 40 per cent.
The social implications of this large scale youth unemployment are profound. Very soon these unemployed youths will become ‘role models’ to the next generation and the scene is set for the unemployed to morph into the unemployable. In turn, those nations at the sharp end of this issue will likely become dystopian economic backwaters, as employers and merchants redirect their attention towards economies that are rich in talent and consequently have citizens with disposable income.
The European Commission has for some time recognised this problem, and in 2013 created the Youth Guarantee Scheme as a response. In essence, the offer of a job, apprenticeship, traineeship or continued education is guaranteed to all young people under 25 within 4 months of them leaving formal education. This is both a noble and an expensive initiative, with an estimated cost over the period 2014 to 2020 of 16.7 billion euros. Though EU auditors place the figure orders of magnitude higher.
There are already impressive country-level initiatives in operation across Europe.
But if we are not to implant economic obsolescence into those entering the scheme, we need to ensure that all parties are aware of the changes that lie ahead, as we transition from the industrial to the, so called, digital economy.
In my experience, many people, including government leaders, do not grasp the implications of this transition. At best, they see the digital economy as ‘the industrial era on tech steroids’; the ‘same ole’ just much faster. It is far more profound than this. And it will be the developed nations that will suffer most. Those in developing nations, who through the use of the Internet, will take their business models to the developed world. Their models will have been forged in the unforgiving heat of impoverished economies. They will lay waste to the flabby industrial models that proliferate in the West.
My concern is that the Youth Guarantee Scheme does not take this reality into account, and is thus creating a temporary illusion in the eyes of the youth that once ‘skilled up’ they can simply hop on the career conveyor belt and enjoy an economically fulfilling life. The bottom line is that to become economically relevant in the digital economy, you need to be able to produce value that cannot be created using new technology. Because if your capability can be replicated by technology, it will be.
It is very difficult to predict, what with the exponential growth in the capabilities of new technology, what jobs will remain in play in the forthcoming years. It is almost impossible to anticipate the ‘yet to exist’ jobs that will be mainstream in a few years’ time. However there are generic skills that can be taught. Plus there is a way to manage your career almost as if you were running a Silicon Valley start-up. In fairness to the Scheme, there may well be some countries that are addressing this. But my sense is that the scheme lacks a digital vision.
The fact that the scheme is receiving the very big bucks certainly suggests that this is a major issue for the European Commission. But even if youth unemployment was at an acceptable level today, the economic tectonic shift we are witnessing as we transition to the digital economy will no doubt create crisis levels of unemployment in due course.
I believe that the scheme needs to be reviewed in the context of the economic step change that is happening all around us, as digital moves mainstream, where even those currently in employment discover to their dismay that they were simply technology placeholders in the factory machine. In the digital economy, the market doesn’t value experience, it values value. Those who grew up in the industrial era, who are now driving local youth guarantee schemes in the member states of the EU, are likely operating under a false sense of assumptions, and in turn inadvertently leading the next generation into a career cul-de-sac. Parents also fall into this category.
I am not decrying the good work that is being done. I just want to make sure that my tax euros give everyone a reasonable chance of economic prosperity in the decades to come, rather than being an exercise that, at best, might keep restless youth off the streets of Europe for a few years.
The stakes are high. If we get this wrong the foundations on which our societies are built will crumble.
Written by: Ade McCormack