Personal Finance

Youth unemployment: Key issues to rethink

crowd

Summary

  • Change is unpredictable in our turbulent business environment.
  • Conventional thinking and approaches often disappoint, when uncertainty rules.
  • Time for a touch of out-of- the- box-thinking in addressing the pressing issue of youth and graduate unemployment.

Two caterpillars are talking and a beautiful butterfly floats by. One caterpillar turns and says to the other, “You’ll never get me up on one of those butterfly things.”

Change is unpredictable in our turbulent business environment. Conventional thinking and approaches often disappoint, when uncertainty rules. Time for a touch of out-of- the- box-thinking in addressing the pressing issue of youth and graduate unemployment. Who really has a cost effective approach at youth job creation that genuinely delivers?

Eric Trist graduated in psychology from the University of Cambridge in 1933, and went on to become one of the founders in Tavistock Institute. A professor emeritus at Wharton, he later taught at York University in Toronto.

Eric taught a class, with two other professors called ‘management in turbulent environments’ full of bright graduate students, filled with ideas about how to change the world. By this time Eric was in his seventy’s and at times would nod off, having a short five-minute nap in the class. Not to be disturbed, students would continue pontificating sharing their [often confusing] thoughts.

Amazing thing was, Eric would wake up unphased, not missing a beat, and in a few sentences would capture the essence of the issue being discussed, providing insights no one had thought of. Quite simply: in a few sentences, he would hit the [intellectual] nail on the head.

If ever there was a issue that needs to be addressed in these turbulent times, it is Kenyan youth and graduate unemployment. Equity Bank grew to it’s dominant position as a first tier bank -- with almost half all the bank accounts in Kenya -- by recognising the needs of the previously ‘unbanked’, that at the time, the dominant lenders ignored because they did not think it would be profitable.

A ‘connect the dots’ bank

For the 40 plus Kenyan banks today, a similar situation to the ‘once unbanked’ exists. No bank really focuses on the very large youth segment. Roughly 60 percent of Kenyans are 24 years and younger.

Yes, there are all sorts of banks that offer accounts to young entrepreneurs and the small enterprise sector, but how many are specifically designed with the distinct needs of job creating youth in mind?

Instead of adapting an already existing financial product, a more fundamental rethink is required. It is a bit like attempting to turn a tea kettle into a coffee maker. While they sound similar, the design and process is fundamentally distinct. The needs of youthful entrepreneurs are different from the established business person.

The focus, therefore needs to be not only the provision of credit, addressing the risk element, but also the dimensions of knowledge, skills and mindset, in our digital world.

Here we are not talking about marketing hype, but instead a deep-seated basic rethink. In addition, there is a need to ‘connect the dots’ with a wealth of organisations that are all involved in the young people job creation space. That includes the private sector, NGOs and donors, and government ministries.

The ‘connect the dots’ bank would focus on providing products and services to young entrepreneurs, and in part would act as a platform linking youthful job creators, with the best providers in the ecosystem. The aim is not to reinvent the wheel, but instead link in the various players.

Key metric would be how many sustainable jobs, and in which areas, are actually created, and at what cost ?

Create a youth job creation contest

Given the number of players in the Kenyan ‘youth job creation space’ must be in the hundreds, and could possibly be more than one thousand actors, how does one know who in the private, public and NGO – donor sectors genuinely has an effective approach? One way to examine the problem is to create a contest.

Competitions have been used drive innovation and solve problems in all sorts of areas, including space exploration. The success of the Think Business awards, in banking, insurance, and capital markets shows the love of competitions. Contest would have to be run by a fair and transparent adjudicator.

This low-cost approach, easily funded by a donor, would separate out the wheat from the chaff, allowing organisations to compete, based on clear criteria, showing that they have a cost-effective approach to youthful job creation.

After all, creating jobs, raising household incomes, stimulating demand in the local economy is at the heart of socio-economic development.

A youth job creation contest would separate out the fluff from the genuine results so that in a social cost-benefit sort of way, the winners would be able to demonstrate that by taking their distinctive approach, they have genuinely been able to create employment opportunities that last.

Results would be widely shared so that others have the opportunity to try the winning job creation approaches for themselves. Given all this is in the realm of social good, for the benefit of all, cutting and pasting would be encouraged.

Here we are really crowdsourcing bright cost-effective approaches. One way to launch would be to test the competition idea in a few test counties, polish the approach, and then roll it out nationwide.

As they say in Amnesty International, this is ‘urgent action’. What will be likely predictable is that winners will surprise the pundits, and come from some unexpected places.

Based on the history of innovation, this makes for an intelligent investment, as it is very hard to predict where the game changing disruptive job creation approaches will come from.

Victor Hugo, the French poet once said: "Nothing is more powerful than an idea whose time has come." Question is: Is this the time?

David [email protected]