How to create jobs for the world’s 1.2 billion new workers
High frequency waves feel urgent. Low frequency waves reshape the system.
This does not mean that crises are not important. But we cannot fall victim to the creeping crisis just because the immediate crisis gets worse or gets more headlines. If you ignore the slow burn for long enough it turns into hell.
One of these forces is already in motion. Over the next 10 to 15 years, 1.2 billion young people in developing countries will come of working age on a scale the world has never seen before. On the current trajectory, these economies are expected to create only about 400 million jobs over the same period; This leaves a gap of staggering proportions.
This is often framed as a struggle for development, and it is. This is also an economic challenge. And it is increasingly becoming a national security issue.
What was striking about last month’s Davos conference was how easily this issue was brushed aside; This situation was overshadowed by the urgency of the current issue. This issue should not be ignored in future forums such as the Munich Security Conference, G-7 and G-20.
If we invest in people early and connect them to productive work, this vast new generation can build dignified lives and become the foundation of growth and stability. If we don’t, the consequences are predictable: pressure on institutions, irregular migration, conflict and growing insecurity as young people resort to every avenue available to them. The World Bank Group is urgently taking the first path, bringing together public finance, knowledge, private capital and risk management tools around a business strategy built on three pillars.
The first is to create both human and physical infrastructure. Private investment and employment will never occur without reliable energy, transportation, education and healthcare. While the role of physical infrastructure is well understood, investment in people is equally critical. For example, a skills center in Bhubaneswar, India, supported by a partnership between the government and the private sector, trains approximately 38,000 people every year. Because preparation is aligned with real market demand, nearly all graduates find employment or go on to create jobs supported by engineering, manufacturing and intellectual property training.
Second, creating a business-friendly environment. Clear rules and predictable regulations reduce uncertainty and increase the ease of doing business. Jobs are created when entrepreneurs and firms have the confidence to invest and expand. Public resources can help unlock this process, but job creation at scale depends on the private sector, especially the micro, small and medium-sized enterprises that create the most jobs.
This brings us to the third pillar: helping businesses scale. We provide equity capital, financing, guarantees and political risk insurance through our private sector arms. One of the latest models is a trade financing guarantee backing Banco do Brasil; This unlocks approximately $700 million in affordable financing for small businesses in Brazil, primarily in agriculture, and funnels capital to firms that support local growth.
We focus on where job potential is highest across five sectors that consistently create jobs at scale: infrastructure and energy, agribusiness, primary healthcare, tourism and value-added manufacturing.
This is not an abstract theory. It is based on evidence, country experiences, and difficult choices about where limited resources will deliver the greatest impact.
It is also not a zero-sum proposition.
By 2050, more than 85 percent of the world’s population will live in developing countries. This represents not only the largest expansion of the global workforce in history, but also the largest growth in future consumers, producers and markets. Whether the motivations are development, sacrifice, return, or security, there is a role and reward for devoting energy and resources to this endeavor.
Developing countries benefit because jobs create income, stability and dignity. They strengthen domestic demand and give young people a reason to invest in their future at home rather than look elsewhere.
Developed countries also win. As emerging economies grow, they become stronger trading partners, more resilient supply chain anchors, and more stable neighbors. Growth in these markets increases global demand and reduces pressures that lead to irregular migration and insecurity; These consequences push the real economic and political costs far beyond borders.
For the private sector (both financial institutions and operators), this represents one of the biggest opportunities of the coming decades. Rapid population growth means constant demand for energy, food systems, healthcare, infrastructure, housing and manufacturing.
Constraint has never been a lack of opportunity. The risk was there, it was real and it was perceived. This is where development institutions can play a catalytic role: financing infrastructure, supporting regulatory reform and mitigating risk.
If we get this right, the low-frequency forces that shape the world (in this case demographics) become engines of growth and stability rather than sources of volatility and risk. If we get it wrong, we will continue to chase crises, reacting to consequences that can be seen years or even decades in advance.
The choice is not whether these forces will shape the future. They will. The choice is whether we should act early and move them towards opportunities or wait until they come as instability.
