A Demographic Crisis Looms if the World Fails in Its Response, We Need Jobs for the Billion-Plus Who Will Soon Enter the Workforce
The world moves on different wavelengths. Some are high-frequency shocks—wars, emerging technologies, market panics—that spike quickly and dominate our attention. Others are low-frequency forces that move slowly but relentlessly: demographics, globalization, water and food scarcity.
The former feel urgent, but the latter reshape the system. That is not to say crises don’t matter. But we cannot become casualties of the slow burn simply because the immediate crisis burns hotter or dominates more headlines. Ignore the slow burn long enough, and it becomes an inferno.
One of those forces is already in motion. Over the next 10 to 15 years, 1.2 billion people in developing countries will come of working age. On current trajectories, these economies are expected to generate only about 400 million jobs over that period—leaving a staggering gap of 800 million jobs unfilled.
This is often framed as a development challenge, and it is also an economic challenge. And it is increasingly a national security challenge.
The Scale of the Challenge
The numbers are almost too large to comprehend. 1.2 billion young people entering the workforce over the next decade and a half. That is more than the entire population of every country in the world except India and China. It is roughly equivalent to adding another India to the global labour force.
And yet, on current trends, the economies that will need to absorb these workers are projected to create only 400 million jobs. A gap of 800 million. Eight hundred million people who will reach working age and find no formal, productive employment waiting for them.
At this year’s Davos conference, it was striking how easily this issue was brushed aside. It must not be ignored at other top-level forums such as the G-7 and G-20. The stakes are too high.
Two Paths, Two Futures
If we invest early in people and connect them to productive work, this vast new generation can build dignified lives and become a foundation for growth and stability. If we do not, the consequences are predictable: pressure on institutions, irregular migration, conflict, and rising insecurity as young people reach for any path available to them.
This is not speculation. It is a pattern we have seen before. When large youth populations cannot find meaningful work, they become vulnerable to radicalisation, criminality, and political extremism. They lose faith in institutions and in the promise of a better future. They move—across borders, into cities, into any space where opportunity might exist.
The choice is clear, but the path is not easy.
The World Bank’s Three-Pillar Strategy
The World Bank Group is pursuing the first path with urgency, bringing together public finance, knowledge, private capital, and risk-management tools around a jobs strategy built on three pillars.
First, creating human and physical infrastructure. Without reliable physical infrastructure—roads, power, ports, digital connectivity—jobs never materialize. Investment in people is equally critical. A skills centre in Bhubaneswar, in partnership with the government and private sector, trains thousands each year. Because the preparation is aligned with real market demand, nearly all graduates secure employment—or go on to create jobs themselves, supported by engineering, manufacturing, and intellectual property training.
This example illustrates a crucial principle: training must be connected to actual market needs, not delivered in isolation. When young people learn skills that employers actually want, they find work. When they don’t, they join the ranks of the educated unemployed—a particularly volatile group.
Second, creating a business-friendly environment. Clear rules and predictable regulation reduce uncertainty and improve the ease of doing business. Jobs are generated when entrepreneurs and firms have the confidence to invest and expand. Public resources can help unlock that process, but job creation at scale depends on the private sector—especially the small and medium businesses that generate most employment.
This means cutting red tape, streamlining approvals, and creating a level playing field. It means protecting property rights and enforcing contracts. It means creating an environment where a small business owner can focus on growing their enterprise rather than navigating bureaucracy.
Third, helping businesses scale. Through its private-sector arms, the World Bank provides equity, financing, guarantees, and political risk insurance. It focuses where job potential is greatest across the five sectors that consistently generate employment at scale: infrastructure and energy, agribusiness, primary healthcare, tourism, and value-added manufacturing.
Scaling is critical. A business that employs ten people is valuable, but a business that employs ten thousand transforms communities. The challenge is to help successful small and medium enterprises become large enterprises, and to create the conditions where new businesses can emerge and grow.
A Non-Zero-Sum Proposition
This is not a zero-sum proposition. By 2050, over 85% of the world’s population will live in developing countries. That represents not only the largest expansion of the global labour force in history, but the largest growth in future consumers, producers, and markets. Whatever the motivations are, there is a role and reward for putting energy and resources into this effort.
Developing countries benefit because jobs create income, stability, and dignity. They strengthen domestic demand and give young people a reason to invest in their future at home rather than look elsewhere.
Developed countries gain too. As developing economies grow, they become stronger trade partners, more resilient supply-chain anchors, and more stable neighbours. Growth in those markets expands global demand and reduces the pressures that drive irregular migration and insecurity—outcomes that carry real economic and political costs far beyond borders.
For the private sector, this represents one of the largest opportunities of the coming decades. Rapid population growth means sustained demand for energy, food systems, healthcare, infrastructure, housing, and manufacturing. Development institutions can play a catalyzing role by financing infrastructure, supporting regulatory reform, and reducing risk.
The Cost of Inaction
The cost of inaction is not neutral. It is not simply that we miss an opportunity. It is that we actively create conditions for instability.
Eight hundred million young people without productive work will not simply disappear. They will be present in their societies, with their needs and aspirations unmet. They will be visible in their frustrations. They will be available for recruitment by anyone who offers them a sense of purpose, belonging, or material reward.
We have seen this movie before. It does not end well.
Conclusion: The Choice Is Ours
If we get this right, the low-frequency forces shaping the world—in this case demographics—become engines of growth and stability rather than sources of volatility and risk. If we get it wrong, we will continue to chase crises—reacting to outcomes that were visible years or even decades in advance.
The choice is not whether these forces will shape the future. They will. The choice is whether we act early and bend them towards opportunity—or wait until they arrive as instability.
The demographic wave is coming. We can ride it to prosperity, or we can be drowned by it. The difference will be made by the investments we make today.
Q&A: Unpacking the Demographic Challenge
Q1: What is the scale of the demographic challenge facing developing countries?
Over the next 10 to 15 years, 1.2 billion people in developing countries will come of working age. On current trajectories, these economies are expected to generate only about 400 million jobs over that period—leaving a staggering gap of 800 million jobs. This is not just a development challenge but an economic and national security challenge with global implications.
Q2: What are the potential consequences of failing to create enough jobs?
If young people cannot find productive work, the consequences are predictable: pressure on institutions, irregular migration, conflict, and rising insecurity as young people reach for any path available to them. Large unemployed youth populations become vulnerable to radicalisation, criminality, and political extremism. They lose faith in institutions and in the promise of a better future.
Q3: What is the World Bank’s three-pillar strategy for job creation?
First, creating human and physical infrastructure—investing in roads, power, ports, digital connectivity, and skills training aligned with market demand. Second, creating a business-friendly environment with clear rules, predictable regulation, and ease of doing business to encourage private sector investment. Third, helping businesses scale through equity, financing, guarantees, and political risk insurance, focusing on five high-employment sectors: infrastructure and energy, agribusiness, primary healthcare, tourism, and value-added manufacturing.
Q4: How do developed countries benefit from job creation in developing economies?
As developing economies grow, they become stronger trade partners, more resilient supply-chain anchors, and more stable neighbours. Growth in those markets expands global demand and reduces pressures driving irregular migration and insecurity—outcomes that carry real economic and political costs for developed countries. It is a non-zero-sum proposition where all parties can gain.
Q5: What is at stake if the world fails to address this demographic challenge?
If we get it right, demographics become engines of growth and stability. If we get it wrong, we will continue to chase crises—reacting to outcomes that were visible years or even decades in advance. The choice is whether to act early and bend these forces toward opportunity, or wait until they arrive as instability. The demographic wave is coming; we can ride it to prosperity or be drowned by it.
