You could almost feel the zeitgeist emerging over the four days that the World Economic Forum meets at Davos. Thousands of CEOs, government ministers and a sprinkling of academics packed into a small town surrounded by snow – the perfect place for the fermentation of ideas and thoughts.
Looking back to the 2012 Davos, the talk was all about the final playing out of the financial crisis and the deep concerns about the break up of the Eurozone. Just a year later, and the mood seemed more optimistic, though with a strong undercurrent of realism. For me, one of the emerging challenges of Davos was around youth unemployment, while one of the strongest threads of opportunity was the relentless advance of learning technologies. Combined, these two developments could lead to the paradoxical situation of highly educated people with no jobs.
Growing concern about youth unemployment
There was certainly a strong consensus that the most pressing short-term, and indeed long-term global challenge is youth unemployment. Its scale is overwhelming: in some countries, more than 50% of young people have no gainful employment. It’s an issue that is set to destabilize fragile economies, become a breeding ground for extremism, and leave a generation permanently scarred. Indeed, it is on track to become one of the worst legacies of the Baby Boomer generation.
The irony is that, right now, corporations are awash with financial resources (some commentators asserting that there is currently two trillion dollars on the global balance sheets). But executives are lacking confidence to invest in the shadow of recession. Though there is vocal concern around the issue of youth unemployment, there is very little in the way of concrete action. It’s clear that those regions with light-touch labour regulations and strong signalling mechanisms to communicate skills in demand are winning. But in many regions, young people are caught in the net of restrictive labour regulations, and weak signals are producing a limited awareness of employable skills. Within the Forum, there was indeed talk of creating a global fund for unemployment, and a more explicit requirement for companies to take on young people. Yet these steps are simply inadequate when confronted with the tidal wave of youth unemployment that is washing over many regions of the world.
Excitement about virtual learning
While there may not be jobs for every young person, the paradox is that their opportunity to receive free education through the development of online learning is expanding at an exponential rate. It seems that the promise of extensive virtual learning is rapidly being delivered. In the Forum, Professors from MIT and Stanford spoke of their determination to put their classes online for all to engage with, while Bill Gates made it clear that this was something he was personally committed to supporting. There are still issues of certification and verification of skills, but these seem relatively easy to solve.
There has been talk about fundamentally restructuring education for years. In fact, some have seen education as the last bastion of traditional hierarchical practices. Luckily, it seems that the momentum for education for all is finally beginning to build, fuelled by lower-cost computers, greater levels of connectivity, and a willingness from some teachers to make their classes available online for free. As a consequence, there are those who say that, perhaps within the next five years, the education landscape will be profoundly transformed.
That still leaves the problem of what it is these more educated and motivated young people will actually do in their working lives. The ‘hollowing out of work’ has brought structural changes to many business functions and tasks across the world. Crucially, this hollowing out has seen middle-skill roles replaced by technology or outsourced to the lowest cost provider. What is left is the low paid and unskilled on one end of the spectrum, and the highly skilled and highly paid on the other end of the spectrum. The challenge for young people seeking work is that it is those disappearing middle jobs that have historically been their initial perch as they join a company. When they go the perch disappears, and with it goes the hope of employment, even for the smartest of kids.
But at this stage, it seems that the sheer complexity of youth unemployment, not to mention the diversity of stakeholders involved, is rendering the challenge almost impossible to solve. Like global warming, the fear is that this will simply be put into the box marked ‘too difficult to solve now’. It would seem that it is not only the CEOs at Davos who could be left out in the cold.