Whose job is it to crack the unemployment crisis?

The world has finally woken up to the problem of persistent structural unemployment. There is now a widespread understanding that, unless we address this chronic lack of jobs, we will see an escalation in social unrest. People need to be productively employed or crime rates go up, economies stagnate and our entire social fabric unravels.

The fact that governments and businesses are realizing this gives me reason to be optimistic, particularly in the West. The latest Pew research shows that the lack of employment opportunities consistently comes out top when people in North America and Europe are asked which issue government should tackle first. But to make a change, we need to follow that realization with real innovation and investment, working across borders, all around the world. This isn’t a national problem, so it’s essential that governments and the private sector take a global view of unemployment and resist tendencies towards protectionism.

In this respect, globalization has already given us many gains. In India alone, millions of jobs have been created and the middle class has grown from 30 million people to 300 million in my lifetime. The IT sector, where I work, employs 2.2 million directly and 8 million indirectly. That’s a good start, but in a country of 1.2 billion people, with 40 million unemployed, it’s a drop in the ocean.

Governments must create regulatory structures that encourage economic stability, first of all incentivizing companies to create jobs, and then to invest in their workers. This investment is essential because people can no longer expect the guarantee of lifetime employment; a person who is employable today may not be employable in four years, unless their employer invests in them or they invest in themselves. Workers today are competing in a global environment, and that means they need quality education, schooling in soft skills and opportunities for retraining when necessary.

The solutions required vary from region to region around the world. The US talks about having 8.5% unemployment, but unemployment is only 3.5% in the technology sector, so there’s an opportunity there for more technology jobs to be created and more people to retrain. Europe, meanwhile, has a serious shortage of talent in healthcare, a sector that will always be needed.

India’s specific problems relate to its large population, and so solutions must be implemented on an enormous scale. We may have 3 million graduates a year, including a million engineers, but only a quarter of those are considered employable, while the others still need further training in communication skills, business etiquette or English. Meanwhile, some 16 million Indian children are not in school at all. India is working on it, but the results will take time.

There’s huge potential for innovation, and the role of the private sector is key. In their tireless search for talent, enterprises can join the fight against youth unemployment by training and mentoring young people in roles that offer career opportunities. In this way, companies can increase their pool of young and ambitious employees, while at the same time contributing to the creation of an ecosystem of employable youth that have acquired the necessary work skills.

I think it’s our responsibility to create opportunities like this. Technology is often blamed for unemployment, but jobs are not disappearing. They’re evolving. Losses in one sector often mean gains in another. At the airport, for example, I now check in at an automated kiosk. That may have meant job losses for counter agents, but think of the thousands who worked to create the check-in software.

We are all custodians of social wealth. No institution or agency can do this alone. That’s where organizations like the World Economic Forum can help, by providing a global platform for exchanging ideas and innovation. This is going to be a long journey, but if we work at it together I can see progress ahead.

This is an extract from the Outlook on the Global Agenda 2014, published this week.

Read a blog on the top 10 trends facing the world in 2014.

Author: S. D. Shibulal is Chief Executive Officer and Managing Director of Infosys, India, and Member of the Global Agenda Council on Emerging Multinationals.

Image: A job seeker looks at advertisements at a job agency in Beijing July 17, 2013. REUTERS/Kim Kyung-Hoon