The global jobs gap is emerging as one of the defining economic risks of the next decade. Over the next 10 to 15 years, an estimated 1.2 billion young people in developing countries will reach working age, yet only about 400 million jobs are expected to be created under current growth trends. That leaves a global jobs gap of staggering proportions, with implications that stretch far beyond unemployment statistics.
In a recent intervention, Ajay Banga, president of the World Bank Group, framed the global jobs gap not just as a development issue but as an economic and national security challenge. His argument is straightforward: demographics move slowly but shape the global system profoundly. If economies fail to absorb this surge of young workers into productive employment, the consequences could be destabilising.
Why the Global Jobs Gap Matters
The scale of the global jobs gap matters because it intersects with growth, migration and political stability. Employment is the primary pathway to income, dignity and social mobility. When job opportunities fall short, households face prolonged financial insecurity, and governments confront rising pressure on social services.
For developing countries, the global jobs gap represents both risk and opportunity. A young population can become a demographic dividend if jobs are available. If not, it can become a source of unrest, irregular migration and weakened institutions. The difference lies in whether economies can create sufficient productive work.
From a macroeconomic standpoint, the global jobs gap also limits consumer demand. Without stable employment, households spend less, save less and invest less in education or housing. This dampens domestic growth and discourages private investment, creating a cycle that is difficult to reverse.
The World Bank Response to the Global Jobs Gap
To narrow the global jobs gap, the World Bank has outlined a strategy built on infrastructure, regulatory reform and business expansion. The premise is that jobs at scale are generated primarily by the private sector, especially micro, small and medium-sized enterprises.
Infrastructure is the first pillar. Reliable electricity, transport networks, healthcare systems and schools form the backbone of job creation. Without them, businesses cannot operate efficiently. Investment in human capital is equally critical. Skills training aligned with market demand increases the likelihood that young people transition smoothly into employment.
The second pillar addresses the business environment. Predictable regulations and transparent policies reduce risk for entrepreneurs and investors. When firms have clarity, they are more likely to expand operations and hire workers. The global jobs gap cannot be closed without vibrant domestic enterprises capable of scaling.
The third pillar focuses on financing and risk mitigation. Through guarantees and equity investments, development institutions can encourage private capital to enter markets perceived as risky. By lowering barriers to funding, small businesses can expand production, upgrade technology and employ more people.
How the Global Jobs Gap Affects Businesses
For businesses, the global jobs gap is not merely a social concern. It shapes market size and long-term profitability. A generation without jobs represents suppressed demand. Conversely, a generation with stable incomes becomes a powerful engine of consumption.
Rapid population growth in developing countries means rising demand for energy, food, housing, healthcare and manufactured goods. Companies positioned to meet this demand stand to benefit significantly. However, persistent unemployment weakens purchasing power and increases political risk, making long-term investment more uncertain.
Financial institutions also feel the effects. High unemployment correlates with higher credit risk, lower loan uptake and fragile repayment capacity. By contrast, job growth strengthens balance sheets across banking systems and stimulates broader economic activity.
Household Consequences of the Global Jobs Gap
At the household level, the global jobs gap translates into delayed independence for young adults, strained family finances and limited upward mobility. Parents may need to support adult children longer than expected, stretching already thin resources. In some cases, households rely on informal work, which often lacks stability and benefits.
Irregular migration becomes more attractive when domestic employment prospects are limited. This carries risks for migrants and strains for destination countries. The global jobs gap therefore influences cross-border movement and geopolitical dynamics.
Yet if managed effectively, the demographic surge could transform economies. Productive employment fosters savings, entrepreneurship and community stability. Young workers with steady incomes are more likely to invest in education, housing and local businesses, creating virtuous cycles of growth.
The global jobs gap is a slow-moving but powerful force. Unlike financial crises that erupt suddenly, demographic shifts build quietly over years. Ignoring them risks allowing structural imbalances to deepen.
Closing the global jobs gap requires coordinated action: infrastructure investment, skills development, regulatory reform and catalytic financing. It also requires viewing employment not as a by-product of growth but as a central objective of economic strategy.
For businesses, addressing the global jobs gap expands future markets and reduces systemic risk. For households, it determines whether a new generation experiences stability or uncertainty. For governments, it shapes fiscal health and social cohesion.
If policymakers and investors act decisively, the coming wave of young workers can become a foundation for shared prosperity. If they do not, the global jobs gap could define the next era not by opportunity, but by instability.
KPMG partner fined for using AI to cheat in internal training assessment