The European debt and banking crises have had a devastating impact on youth unemployment across the region. Millions of young people today face the prospect of becoming a lost generation living through a lost decade, and many worry that they have no future. Their trajectory, in contrast to that of their parents and grandparents, is defined not by hope, but fear.
The media report that Europe's youth unemployment figure of over 22 percent makes it one of the worst regions in the world. The International Labour Organization has warned that the Eurozone risks losing a further 4.5 million jobs over the next four years, primarily among young people, unless it shifts its policies towards job creation.
But despite the frightening speed at which young people have been expelled from the labour market, it is important to note that Europe has coped with high youth unemployment for many years. For example, Spain's youth unemployment figures were similarly high in the mid-1980s and mid-1990s, research shows.
And unemployment estimates can be deeply misleading. Reports that youth unemployment in Spain and Greece is nearing 50 percent make the situation seem far worse that it is. This is because young people who attend university or vocational training programmes are not considered part of the labor force. So the 50 percent figure does not refer to all young people, just thoseactively looking for a job.
A far better indicator is the youth unemployment ratio, which measures the number of unemployed against the total number of young people aged 16 to 24. These figures, while still serious, seem far less doom-laden. For example, the youth unemployment rate for the 27 countries of the European Union has risen from 20.1 percent to over 22 percent since 2009, while the youth unemployment ratio has risen from 8.7 percent to over 9 percent. Greece's youth unemployment rate may be approaching 50 percent, but its youth unemployment ratio is 13 percent.
This is not to make light of the situation, but it is important not to be alarmist. And some research suggests that Europe's youth unemployment level is actually better on average than it is in the US.
Mitigating these figures somewhat is the "boomerang" phenomenon -- young people aged 25 to 34 who left home only to return to live with their parents for economic reasons. This is a widely accepted custom for unmarried children in southern Europe. Roughly 70 percent of Italian men aged 25 to 34 live with their mothers, for example.
But there is no getting away from the fact that unemployment has a very negative and even devastating effect on the lifetime earnings and career paths of young people. This is known as the "scarring effect" in economic jargon.
So what can be done? Here are a few suggestions from a World Economic Forum and ManpowerGroup report:
· Higher participation in career guidance programmes for school children
· Better career and labour market information for young job seekers
· A more positive image for vocational education
· Better training
· Investment in entrepreneurship education
One of the reasons why Germany has a youth unemployment ratio of just 4.5 percent is its relentless focus on training and vocational education. Talent is a by-product of education; the quality of a country's human capital depends on it. Four of the 12 pillars that determine the World Economic Forum's measure of competitiveness relate directly to education: health and primary education; higher education and training; technological readiness; and innovation.
If we want to create more jobs, Europe has to invest heavily in the growth sectors of the future, be they genetics, nanotechnology or digitalization. This can only be done by strengthening research and innovation throughout the EU.
Technology is going to revolutionize almost every sector, leading to the demise of many traditional professions. Economic and political power will be determined less by a country's size than by its technological superiority. To benefit from this new reality we need to foster a culture of entrepreneurship throughout Europe, investing in innovation hubs for example.
Young people will have to realize that jobs will no longer be handed to them on a plate; they will have to create them for themselves.
This post is part of a series by Professor Klaus Schwab, Founder and Executive Chairman of the World Economic Forum, based on his book The Re-emergence of Europe.