Navigating the Path to Decent Work and Reducing Youth Unemployment

The global education goal, part of the United Nations’ Sustainable Development Goals (SDGs), remains significantly off track. Various reports, including from UNESCO and UN news, highlight the concerning trend that unless drastic changes occur the world will not meet its commitments to ensure inclusive and equitable quality education by 2030.

The world today is grappling with a polycrisis – a complex set of interconnected global challenges that impact economies, industries, and job markets simultaneously. 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.

According to the International Labour Organization (ILO), global youth unemployment was 13% in 2023, with many young people facing limited prospects for stable and decent work. On the flip side, the World Economic Forum (WEF) found that 44% of businesses report difficulties in finding talent with the right skills to fill jobs. This contrast reflects a deepening mismatch between the supply of young job seekers and the demand for skilled talent, which, if left unaddressed, will exacerbate both unemployment and the talent shortage.

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

Economy: Growing Jobs and Funding

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. Youth unemployment continues to rise even in nations with positive GDP growth, indicating that inclusive economic policies and investment in key sectors are lacking (ILO, 2024).

Moreover, the alignment between economic growth and investment in education is critical. The Global Education Monitoring Report 2023 highlights that national budgets for education often fall short of the recommended 4%-6% of GDP that UNESCO advocates. 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: Providing the Foundation for Lifelong Learning

Education systems need to evolve to meet the changing demands of the workforce. The OECD – OCDE emphasizes the importance of embedding skills, knowledge, attitudes, and values into education systems to ensure that young people are prepared for lifelong learning. In particular, 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. However, countries that have embraced flexible learning, such as Germany with its robust vocational education and training (VET) programs, have been able to reduce youth unemployment significantly. The integration of industry-specialized learning and competency-based education is critical for preparing young people to thrive in an evolving workforce, particularly in sectors like technology and sustainability.

Employability: Training the Right Skills for Employment or Entrepreneurial Success

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. For example, in Switzerland, where education and training are tightly integrated with the labor market, youth unemployment is among the lowest in the world. Building a system that continually adapts to changing workforce needs is essential for improving youth employability.

Recent trends show that many young people increasingly prefer entrepreneurship over traditional employment, driven by the desire for independence and the ability to create change. A 2019 study by Deloitte found that 76% of millennials view entrepreneurship as a key vehicle for driving social impact. However, research highlights the need for robust support systems to help these young entrepreneurs succeed. The 2021 Global Entrepreneurship Monitor emphasizes that access to entrepreneurial education, mentorship, and skill development is critical for youth to thrive in their ventures.

Equality: Ensuring an Inclusive and Diverse Talent Pipeline

Any strategy to reduce youth unemployment must prioritize 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.

Programs that specifically target underrepresented groups – such as mentorships and women-in-tech initiatives – can help diversify the talent pipeline. Furthermore, companies that emphasize inclusive hiring practices, gender parity, and equity in leadership are not only contributing to social justice but also benefiting from a more innovative and dynamic workforce. The data is clear: promoting diversity is a strategic advantage in the modern economy.

Ecosystem: Aligning Stakeholders for Maximum Impact

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. The OECD underscores the importance of synergy across the value chain, ensuring that all stakeholders are aligned toward the goal of reducing unemployment and fostering decent work.

Successful models of ecosystem collaboration, like those seen in Singapore, offer valuable lessons for other nations. In these countries, the government plays a central role in orchestrating cooperation between educational institutions and industries to ensure that young people are being trained in fields that are projected to grow. Such synergies foster an environment where young people can transition smoothly from education to employment and where employers can easily find the talent they need.

As respective leaders, SAP and UNICEF join forces to create innovative solutions to global skilling and workforce challenges with an aim to help 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.

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 program helps equip youth with the essential skills they need to flourish – wherever they may see their future. Further, it builds on UNICEF’s Generation Unlimited (GenU) signature program, Youth Agency Marketplace (YOMA), a platform developed by young Africans to tackle labor market challenges and increase youth agency across the globe. By the end of the first year, SAP and UNICEF’s GenU reached more than 600,000 youth, granting them access to foundational and digital skills opportunities that help young people unlock opportunities in the changing global economy.

One of the learn to earn pathways on YOMA is the SAP Educate to Employ initiative designed by SAP to help 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. It also aims to assist employers in accessing diverse and certified talent, thereby accelerating digital transformation in each country through a skilled talent pipeline. More than 1,000 learners completed one or more foundational skills courses, while 165 learners completed over 400 hours of critical skills development training and achieved an SAP certification for technology consultant beginners. Additionally, 100 learners have completed their intermediate training on the SAP Learning site and are preparing for SAP-certified associate exams.

This multistakeholder approach underscores the power of partnership in addressing complex social challenges. 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. These partnerships exemplify the collaborative frameworks needed to drive sustainable impact on a global scale. 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 marginalized youth are not left behind.

A Path Forward

The polycrisis we face today demands multidimensional solutions that address both the supply and demand sides of the labor market. By focusing on the interconnected elements of economy, education, employability, equality, and ecosystem, we can create a comprehensive strategy to reduce youth unemployment and foster decent work for all.

Policymakers, business leaders, and educators must come together to close the skills gap, promote inclusive growth, and build resilient labor markets. The challenges are great, but so are the opportunities. With coordinated effort and sustained investment, we can build a future where young people have the skills, opportunities, and support they need to thrive in the global economy.

For more information on how SAP is helping the world run better and improving people’s lives all year round, visit sap.com/csr.