Youth Employability and Entrepreneurship: The Role of Digital Economy

While considerable progress has been made over the past two decades in reducing poverty, alleviating hunger, reducing inequality and improving outcomes for many of the world’s poorest and most vulnerable, such progress has been uneven (United Nations, 2017c). Inequality has not only persisted, but in many instances widened, with substantial numbers of people, including youth, excluded from full participation in economic, political and social life.

The situation of young people from groups considered vulnerable or marginalized—including indigenous peoples, persons with disabilities, migrants and refugees, people living in poverty, and girls and young women—underlines the fact that the 2030 Agenda will not be a success unless it is based on the ideals of inclusiveness, leaving no one behind and shared prosperity.

By 2030, as the global population is expected to reach 8.6 billion, the youth population will increase to more than 1.3 billion. Pervasive unemployment, underemployment and longer school- to-work transitions are some of the most significant challenges facing the rising youth population. These challenges are the result of the lack of adequate professional opportunities for young people, and increasingly skewed skills imbalances, i.e. shortages, surpluses and mismatch of skills acquired versus those demanded by the world of work.

Today, there are 1.2 billion young people aged 15 to 24 years, accounting for 16 per cent of the global population. The active engagement of youth in sustainable development efforts is central to achieving sustainable, inclusive and stable societies by the target date, and to averting the worst threats and challenges to sustainable development, including the impacts of climate change, unemployment, poverty, gender inequality, conflict, and migration.

Young people in developing economies face an employment situation that is very different from that of youth in developed economies. In most developing economies opportunities for youth are concentrated in the informal sector, where poor job security, low wages, and limited chances for on-the-job learning restrict the ability of young people to leverage such jobs to secure better, more formal work. Those youth most affected by poverty and marginalization face challenges relating to the cost of education and the possibility of having to leave school to help cover their families’ rising cost of living; these factors effectively prevent many youth from completing secondary education or in some cases even primary education. For young people who lack a strong educational foundation, initial experiences in the labour market can reinforce the cycle of poverty and undermine the intergenerational promise of improving economic outcomes. For a large number of youth, working poverty continues to weaken their ability to prepare themselves for better employment and to escape chronic financial hardship and its attendant challenges.

Technological innovation and automation are rapidly changing the nature and context of work for the young people of the world. Advances in ICT have greatly increased the productivity of workers and enabled the creation of new jobs and industries. Youth are particularly well-positioned to benefit from these developments, given their early familiarity with digital technologies and their openness to exploring their application in an ever-widening range of new and existing contexts.

Interventions designed to empower youth to start their own businesses are increasingly part of the youth-oriented development agenda. With the high levels of unemployment in many countries, entrepreneurship is seen as a means of engaging ambitious youth in creating their own employment opportunities while also generating work opportunities for other youth. Entrepreneurship is a path suitable for some young people but must be viewed in the context of a broader youth employment strategy and not seen as the main approach to youth employment.

One of the social and economic impacts of the Covid-19 pandemic, worldwide, is the loss of jobs that come as a result of the lockdown and extreme social distancing measures. In Africa, for instance, the International Labor Organization (ILO) estimated that in the first month of the pandemic, the income deriving from the informal sector (major source of employment in the continent), was expected to drop 81 percent. According to ECA estimates, 19 million jobs will be lost due to the pandemics, increasing the levels of poverty and inequality.

Furthermore, the McKinsey report states that between 9 to 18 million formal jobs in Africa can be lost or made redundant, whereas 30 to 35 million formal jobs will suffer a substantial decrease, due to the respective decrease of working hours.

Harnessing technology might be one of the solutions to the above stated challenges and more so for the youth, tech savvy and abreast with the technology in other aspects of their lives. The pandemic is proving that the ability to leverage digital tools for solutions and transformation are a critical part of all economies in a post-pandemic scenario and for Africa this means tapping on the potential for youth. Most governments have already leveraged this potential as the youth already inwardly produced protective equipment and other innovative products, as in the cases of Senegal, Rwanda and South Africa.