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How Can We Prevent a ‘Lost Generation’?

Tuesday, 7 Dec 2010 | 2:28 AM ET

If you are under 25 you could be forgiven for being angry.

In much of the developed world your parents' generation has run up huge government debts which you will spend your life paying off if you are lucky enough to get a job.

The baby boomers will retire earlier and live longer, draining your income with their final salary pension schemes - something you will find impossible to attain.

You are likely to find your education will see you rack up huge personal debts even though a university degree is now less likely to secure you a job when you graduate or get access to capital to start your own business.

In many of the world's biggest developing markets things are very different.

Coming off a low base, you may be looking forward to a brighter future than your parents as the benefits of globalization allow you better access to education, stronger job and earnings prospects.

With your government's major reserves, following years of trade surpluses, you also do not face the prospect of paying the interest on your government's debt via your tax payments.

In fact, if all goes well for the developing world you could reach a standard of living that would make your peers in the developed world very angry indeed.

If you look at the figures, the chances of young people finding work are weaker than in previous generations.

The International Labor Organization warns the world faces a "lost generation" and estimates 81 million people aged between 15 and 24 are currently out of work.

"In 2009 alone, 6.7 million youth joined the ranks of the unemployed. This compares to an average annual increase of 191,000 in the 10 years before the crisis," ILO Executive Director Jose Manuel Salazar said.

"In advanced and some emerging economies, where the youth unemployment rates are much higher than the global rate, the impact of the crisis on youth is felt mainly in terms of rising unemployment and the social hazards associated with long-term job searches, discouragement, and prolonged inactivity," Salazar added.

In contrast, he said, in developing economies most youth have no choice but to work so the unemployment statistics seem less dire.

"Young men and women typically work in the informal economy, often in self-employed or in occasional wage activities, for example, seasonal farm work," he explained.

The Challenge

The problem is huge and you should check out our special report page for a wide range of work looking at possible solutions put forward by some of the leading thinkers in this area.

To find solutions to this huge problem is going to require cooperation. To achieve this, businesses, government, universities and NGOs are going to need to come together, find solutions and best practice that work in very different markets with very different characteristics.

Earlier this year, John Studzinski, who runs the global advisory business at private equity giant Blackstone, told CNBC it was asking the wrong questions.

At the time we where discussing bond yields as the Greek crisis went into overdrive but Studzinski said our discussion missed the point.

"People are not talking about young people failing to find work and the impact unemployment will have on the individual's dignity, prospects for the future and society," said Studzinski who has spent the last few years trying to get to grips with the AIG disaster and advising on major M&A deals across the world.

The conversation moved on over the coming months and resulted in CNBC and Blackstone creating the Global Youth Employment Agenda.

Partnering with Siemens, Manpower, Fiba Holdings, Bharti Enterprises, the International Youth Foundation and the NAAPC the aim of the GYEA is to drive the awareness of youth unemployment and find solutions to the problem.

At a meeting in London on December 2 and 3, the GYEA will begin a debate that we hope will help achieve these aims.

We make no promises on solving the problem but hope to give focus to an issue that, if left unchecked, will see more angry young people take to the streets of their capitals and vent their anger at the prospect of becoming one of the "lost generation."