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McKinsey: Business needs to deal with youth unemployment

One of the world's elite management consultants said businesses should pay attention to lagging youth employment.

"One of the biggest issues we think that we are facing in our times is the issue about youth unemployment," Dominic Barton, global managing director of McKinsey & Co., said at the World Economic Forum in Davos, Switzerland on Thursday.

"It's something that business needs to be worried about. It's not something that's a side show," Barton added. "If we don't deal with it we're not going to be able to operate in the way we need to. We need to own it more."

Dominic Barton, managing director of McKinsey & Co.
Jason Alden | Bloomberg | Getty Images
Dominic Barton, managing director of McKinsey & Co.

The International Labor Office estimated that 12.6 percent of youth were unemployed as of 2012, at least a full percentage point above 2007. Nearly 75 million youth are unemployed around the world, an increase of more than 4 million since 2007. Youth is defined by the United Nations as ages 15 to 24.

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Barton said there are more jobs than people think because of an information gap.

There were about 3 million unfilled jobs in the U.S. and most are "very exciting," according to Barton. He said a position for a machinist, for example, is now a high-tech job, but people might not apply because they think of it as "blue-collar, hardcore job."

"Most people don't know what jobs are available, and if they do, they're out of date in terms of where they are," Barton said. "There are big mismatches that are going on."

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Barton spoke alongside billionaire Aliko Dangote, president and CEO of Nigeria-based conglomerate Dangote Group.

Dangote said that some modes of education were outdated, and graduates have seen their jobs supplanted by advances in technology. The solution, he said, is to increase vocational and technical training and entrepreneurship.

Dangote added later that youth unemployment could cause destruction if not addressed, citing the "Arab Spring" revolutions in North Africa that toppled several governments as an example.

"We need to attack this issue on all fronts," Dangote said. "There are going to be a lot of reforms. The government, private sector and civil society need to sit down and take this more seriously than just 'talk shop.'"

Barton agreed that more training was important, especially short term programs.

"We have too much of an aggregated system. Why should it take two years to be able to learn something? Why can't I break that down?" Barton asked.

He cited online video training and intensive day-long coding workshops as examples in education innovation for specific skills.

"Once you can get in the system and build a base you can go from there. But you've got to get people in," Barton said.