In an article entitled Generation Jobless, The Economist wrote about the 300 million young people around the world aged between 15 and 24 who are unemployed. The topic of youth unemployment may not be a new one, but the way The Economist has analysed it, gives a different dimension to the problem.
I strongly believe that we can overcome our own challenge of youth (un)employment by having coordinated initiatives that support innovation, both at a company level and at the level of start-ups
The sense of the article is that youth unemployment is the main problem of the 2010s.
It claimed that whereas less advanced economies have always had a youth unemployment problem to grapple with, result-ing in large flows of migration towards more advanced economies, this is now a challenge for all countries, irrespective of the state of their economy.
There are the obvious exceptions such as Germany, where they speak of full employment. However, the scale of the problem is such (in that it may be considered to be a global problem) that it will bring about changes in the lifestyle of those within this age group and which is different from that of their parents.
More importantly is: How does one combat youth unemployment? Taking the EU perspective, there is still disagreement as to what will bring about economic recovery – policies of fiscal prudence or policies of growth? And is there a balance between the two that can be obtained?
A former Italian Minister for Employment in the mid-1990s, Tiziano Treu, spoke about the need to invest further in education and vocational training, linked to active labour market policies aimed at placing young people in employment within three months of them becoming unemployed.
He also spoke about the need to invest in research and development in new sectors of the economy (he makes reference to the green economy) and to assist young people in starting their own business through the availability of Government-guaranteed and cheaper credit.
In Malta we may feel the challenge much less than other countries. In the last quarter of 2012, the activity rate among those aged 15 to 24 stood at around 50 per cent. The bulk of the other 50 per cent were involved in full-time education. The employment rate was 43 per cent while the unemployment rate for this age group was 12 per cent.
This last figure compares well with the 37 per cent rate in Italy and the 50+ per cent rate in Greece and Spain. However, it is nearly twice the national rate and two and a half times the rate among those aged 25 years and more.
The Union Ħaddiema Magħqudin’s (UĦM) Jobs Plus initiative received endorsement and support from the other social partners and the political parties.
It has been described as “a foundation stone for our country in terms of quality of jobs”. The UĦM document does highlight the fact that the employment rate in this country will probably reach the EU average by 2020 – no mean feat when one considers the level we had prior to EU accession. However, it then mentions the point that labour productivity still lags behind that of leading EU economies and this will be a barrier to having stronger economic growth.
Within this context, further investment in education and vocational training becomes critical as do initiatives aimed at bringing the long-term unemployed back into the workforce.
However, this country also needs a hub that can serve to stimulate innovation. We are not and cannot be a nation of inventors but we have been very capable at using existing technology to develop new concepts, products and services.
In the ICT sector we have managed to make a quantum leap as evidenced by the increase in employment in such activities.
There is nothing that should stop us from succeeding in this area as well. Jobs related to innovation do not belong to any particular sector, but cut horizontally across all sectors. They guarantee sustainability and profitability.
They need to be supported by cheap credit lines that are guaranteed by the Government – another initiative that we have already had and that has been successful.
I strongly believe that we can overcome our own challenge of youth (un)employment by having coordinated initiatives that support innovation, both at a company level and at the level of start-ups.