Solutions to Youth Unemployment by Bridging the Job Market Gap (Assistant Professor University of St. Gallen) Peter Vogel Strategy Prof. Dr. Peter Vogel From Education to Employment

3 © Prof. Dr. Peter VogelAugust 11 th, 2015 Some more facts  In developing economies, close to 80% of young workers work in informality  Most statistics ignore the NEETs  In the US, 15% of youths are NEETs  In the EU, the NEET rate increased by 2% over crisis ILO: “The youth unemployment rate (12.6% in 2013) would be a full percentage point higher if it included the NEETs” e 10 million unemployed youths Snapshot Latin America (total youth: 106 million) million youth that neither work nor study million youth work in informality Youth (15-24) Unemployment Indicators 1.2 billion youth worldwide = 17% of total population 75 million are unemployed = 40% of total unemployed Data Sources: ILO, OECD, Eurostat, World Population Prospects 30 22

Youth-to-Adult Unemployment Ratio 4 © Prof. Dr. Peter VogelAugust 11 th, 2015 Data: OECD, 2013

Youth-to-Adult Unemployment Ratio 5 © Prof. Dr. Peter VogelAugust 11 th, 2015 Data: OECD

Drivers of the Youth Unemployment Crisis 6 © Prof. Dr. Peter VogelAugust 11 th, 2015 Demand Side  Low aggregate demand  Inflexible labor markets / temporary jobs  Informal recruiting inaccessible to youth  False expectations of employers  retirement age keeps older workers Supply Side  Lack of preparedness for work  Lack of adequate skills and experiences  Academic inflation  Characteristics / attitude towards work  Rise of youth population in some regions  False expectations of young people Mismatches  Skills / capabilities mismatch  Over-qualification  Under-qualification  Regional differences (developed vs. developing)  Expectations mismatch 

Digital Natives: A Generational Snapshot 7 © Prof. Dr. Peter VogelAugust 11 th, 2015

Digital Natives: A Generational Snapshot 8 © Prof. Dr. Peter VogelAugust 11 th, 2015  Speed & convenience  Shift of basic skills  Little online privacy  Virtual life replaces real life  Over-exposure to information  Education is regarded as less valuable  Need for confirmation and mentoring

What if We Don’t Find Adequate Solutions? 9 © Prof. Dr. Peter VogelAugust 11 th, 2015 Individual Consequences  Scarring effect on the person’s human- and social capital  Negative life-long effects on earnings  Negatively influences psychosocial development and overall well-being  Prevents young people from developing adequate work ethics  Difficulty of young people to become independent from parents  Forces young people to accept part-time or temporary employment  Increases chances of subsequent unemployment Societal & Economic Consequences  Waste of economic potential  Threat of an undermined social stability  Brain drain towards countries with better job opportunities  Loss of tax earnings for countries  Increased criminality rate and anti-social behavior, requiring more security It is estimated that joblessness in the United States alone will account for a total of $20 billion in lost earnings over the next ten years Jacobs, 2014

Solutions – Multi-Stakeholder Efforts 10 © Prof. Dr. Peter VogelAugust 11 th, 2015

Intersection Education System – Labor Market 11 © Prof. Dr. Peter VogelAugust 11 th, 2015 “I always thought that by graduating from a renowned university I would easily find a job within a few months time. But I was wrong. Now it is over a year and things just won’t get any better. Neither for me nor for my peers…” (Hanna, 25, recent graduate from a leading business school) 75% of European universities provide little or no career guidance (Futurework Forum) No, and I would not use it anyway Yes, and it is useful Yes, but it is not useful No, but I would find it useful

Necessity to Bridge the Job Market Gap 12 © Prof. Dr. Peter VogelAugust 11 th, 2015 Supply-Side In the EU-28 there are 6 million unemployed youth that are employable but cannot find a job (Eurostat) Demand-Side In the EU-28 there are 4 million jobs that could not be filled because the employers couldn’t find the individuals with the right skills (G. Hultin, 2010) Addressing the Mismatch “It is imperative that we find solutions to bridge the job market gap & connect the right talents with the available jobs, no matter where they are!” (FutureWork Forum)

Panelists 13 © Prof. Dr. Peter VogelAugust 11 th, 2015 Michelle Blanchet Founder & Director Educators’ Lab Carsten Sudhoff Founder & CEO CircularSociety AG

Panel Questions 14 © Prof. Dr. Peter VogelAugust 11 th, 2015  What changes are needed from both the education system and the labor market to bridge the job market gap?  Which role does dual education / vocational training play in solving youth unemployment?  What are some of the responsibilities of educators and employers?  What are some of the best-practices we know?

Thank you for your attention! 15 © Prof. Dr. Peter VogelAugust 11 th, 2015 (Assistant Professor University of St. Gallen) Peter Vogel Strategy Prof. Dr. Peter Vogel 30% discount for webinar participants! Order the book on and use the code PM15THIRTY