Fixing Youth Skills Crisis The Key To Unlocking Economic Growth

The global education goal that forms part of the UN’s Sustainable Development Goals remains significantly off track, with various reports highlighting a concerning trend that, unless drastic changes are implemented, the world will not meet its commitments to inclusive and equitable quality education by 2030.

According to Eugene Ho, Global CSR Director for Future Skills at SAP, the world is grappling with a complex set of interconnected global challenges that impact economies, industries and job markets. “From climate change and geopolitical tensions to technological disruptions and economic instability, these crises are reshaping the landscape of work, especially for young people. While youth unemployment remains high, employers worldwide are also struggling to fill critical roles, highlighting a significant skills gap.”

While data by the International Labor Organisation found that global youth unemployment was 13% in 2023, that figure increases significantly in Africa. An African Development Bank report found that, while 10 to 12 million youth enter Africa’s workforce each year, only 3.1 million jobs are created on the continent. The resulting unemployment leads to poorer living conditions, drives migration, and contributes to conflict.

On the flip side, the World Economic Forum found that 44% of businesses globally report difficulties in finding talent with the right skills. Skills research conducted by SAP revealed that nearly all African organisations faced skills gaps, with access to skilled recruits cited as their top skills-related challenge.

“To tackle this challenge, we must take a comprehensive, systems-based approach, focusing on five interconnected elements: economy, education, employability, equality, and the ecosystem,” says Ho. “Together, these factors can help close the skills gap, reduce youth unemployment, and create pathways to decent work for all.”

Economy & Education

Economic growth remains a critical driver of job creation, but the quality and inclusivity of that growth matter. In many parts of the world, jobless growth has become a pressing concern, as economies expand without generating enough formal employment opportunities for young people.

In South Africa, for example, a resurgent economy has not translated into greater youth employment, with the latest data from Stats SA revealing a 45.5% unemployment rate among South African youth aged 15 to 34.

“Moreover, the alignment between economic growth and investment in education is critical,” says Ho. “Without adequate financial support, education systems cannot provide the skills and competencies needed to prepare young people for modern job markets, leaving many young workers without the necessary tools to succeed.”

Education systems also need to evolve to meet the changing demands of the workforce. For example, stackable credentials – modular qualifications that allow learners to build expertise over time – are becoming an essential component of successful education-to-employment transitions. “Despite the need for adaptable learning pathways, many education systems remain rigid and slow to adopt these models.”

Employability & Equality

One of the most significant barriers to reducing youth unemployment is the skills mismatch – the gap between what young people learn and what employers need. The World Economic Forum’s Future of Jobs Report 2023 projects that 50% of employees will need reskilling by 2025 due to rapid technological advancements. Yet, traditional education systems are often not aligned with industry needs, leaving many young workers without the skills required for high-growth sectors.

“Governments and businesses must collaborate to ensure that training programs are directly linked to market demand. Public-private partnerships, such as apprenticeship programs and industry-led training initiatives, can play a pivotal role in closing the skills gap.”

Any strategy to reduce youth unemployment must also prioritise equality, ensuring that opportunities are equally accessible to all young people, regardless of their background, gender, or location.

“Despite advances in education, women and marginalized communities continue to face barriers to entry in high-growth industries, particularly in STEM fields. According to UNESCO, only 35% of STEM graduates are women, highlighting the gender gap in science, technology, engineering, and mathematics.”

Enhancing Ecosystems

According to Ho, a thriving job market requires more than just a functioning economy and well-prepared workers – it needs a cohesive ecosystem where governments, businesses, educational institutions, and civil society work together efficiently.

SAP and UNICEF have joined forces to create innovative solutions to global skilling and workforce challenges with the aim of helping young people transition to earning. “Together, we’re generating inclusive opportunities for underserved young people worldwide, preparing them for decent work with the skills that employers need,” says Ho. “We expanded our partnership in 2022, with a three-year investment focused on impacting youth in Kenya, Nigeria, and South Africa through a new program that supports learning to earning pathways in growing digital and green economies.”

The SAP Educate to Employ initiative designed by SAP also helps equip beneficiaries with essential competencies for the digital economy. The free initiative, implemented by the local non-profit UMUZI, focuses on developing skills, knowledge, attitudes, and values to help prepare candidates for employment.

“This multi-stakeholder approach underscores the power of partnership in addressing complex social challenges,” says Ho. “By pooling expertise and resources, SAP, UNICEF’s GenU, and UMUZI are collectively ensuring that youth not only gain relevant skills but also access meaningful pathways to employment. As digital and green economies continue to reshape the future of work, partnerships that unite private, public, and civil society actors will remain crucial in ensuring that marginalised youth are not left behind.”