Societies under stress: why creating jobs for youth is vital
Andrew Sheng says the huge disparities in income and access to opportunity in the global economy are reflected in the prospects facing many young people today. Policymakers must take note
The 20th anniversary of the Asian financial crisis and 10th anniversary of the North Atlantic financial crisis brought a sense of déjà vu.
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We can trace this severe job disruption to the convergence of several forces – demographics, climate change, technology and policy neglect.
Our current business model centres on the post-war creation of a global supply chain that tapped global resources to feed American and European consumption. Technology enabled this supply chain to be built, first by “unbundling production from consumption”, an insight of economist Richard Baldwin.
The arrival of IT and telecommunications in the 1990s created the second unbundling, distributing knowledge and technology around the world faster, causing convergence between the advanced countries and the emerging markets.
Baldwin thinks that the third convergence will be caused by cost reductions in moving people. But, as advanced markets age and become saturated in terms of consumption, the emerging markets are facing rising populations, rapid urbanisation and an inability of their governance model to adapt to new technology. The result is rising unemployment, especially among young people. When you add climate stress, food shortages, corruption and civil unrest, the outcome is war and spreading terrorism.