According to the International Labor Organization, young people account for up to 40% of the world’s unemployed. One in four people today is a young person aged 15–29: that is nearly 1.8 billion in total, of whom close to 90% live in developing countries.

40%
of the world’s unemployed are young people

As millions enter the job market every year, governments and the private sector have not been able to provide opportunities for all. In sub-Saharan Africa alone, 10–20 million young people enter the job market every year. Those entering the labor force are underequipped to address market needs while employers cannot find candidates with right skill sets. Causes for this malaise are many, ranging from limited access to low quality of education, inadequate national ploicies on employment or education and persistent gender inequality. The consequences are growing poverty, crime, migration, political unrest, missed opportunities in terms of innovation and economic development. 

​KEY CONCLUSIONS

• Large scale solutions and scaling up need strategic partnerships between companies, government and even with competitors
• Businesses and philanthropy can work together, if they embrace a shared value approach that recognizes that economic and social values are not mutually exclusive
• Local solutions for local barriers (transport/lunch/tech barriers)

This generation will either be the “lost generation” or a “new asset class” depending upon how issues of unemployment and opportunities are addressed. Can philanthropic investments convert this ticking time bomb into a productive dividend? If yes, how? To address unemployment issues, the Kenya Commercial Bank Foundation (KCBF) extrapolated the answer from the following question:

“The youth population in Kenya is large, untrained, unskilled and there is very little investment going into them. If 70% of the population is poor and have no work, then in a decade, businesses have no one to sell to and nobody to bank. How do you create a bankable generation?”

An answer came in the form of holistic support and hand holding individuals to create their own businesses. KCBF decided to provide:

• Vocational education, loans on preferable conditions and access to support services such as legal advice, business development, and accountancy support to 10,000 youth per year (50,000 over five years)
• After 12 months, these young men and women are able to access credit through the banking system. They are supported by university graduates who provide services pro bono.
• KCBF employs its convening power to link youth to important customers or retailers and potential employers
• In 2017, KCBF supported 10,600 youth. Out of the 1,000 that have started their own business, 260 have started to repay their loans.
• Partnerships are the KCBFs pathway to scale!

An ongoing challenge has been to keep students in class. Poverty makes it difficult for students to stay in class and focus. In 2017, the foundation decided to pay bus fares, lunch money and student fees to enable youth to continue training.

CASE STUDY ON YELLOWWOODS FOUNDATION

​Learn how Yellowwoods, a South African company creates social and economic value by addressing unemployment issues.  

Yellowwoods does not separate its monitoring of social and environmental goals from its main business. As well as launching social enterprises such as Harambee, it also works with its investees to articulate and hold them accountable for social and environmental goals. Yellowwoods takes the position that these goals should be integrated into what is defined as shareholder value and focuses on finding the “sweet spots” where social value creation can happen in tandem with financial value creation.

​Reward and incentive structures for the businesses have been re-crafted to ensure that there is alignment between Yellowwoods and the executive teams running its core businesses to build social as well as financial value.
This integration of social and business objectives is reflected in Yellowwoods own governance, in which financial and social concerns are managed, without hierarchy between the objectives, by the main board.

Whilst family members are on the board, it does not exclusively consist of family – other individuals sit on the board. A smaller subcommittee of directors also delves into social issues more deeply. Quarterly meetings are the occasion to review how Yellowwoods is living up to its social mission statement – ie, whether it is bringing about significant and positive change in the world, acting in ways that make the family and businesses’ teams proud.