BLOG: Cities as Drivers of Economic Opportunity for Youth

Making Cents International

According to the recently released United Nations report (“World Urbanization Prospects”), more than half of humanity now lives in cities. Today, 54% of the world’s population, 3.9 billion people, resides in urban areas, compared to only 30% back in 1950. The report predicts that cities will add an additional 2.5 billion people by 2050, with nearly 90% of this increase happening in Asia and Africa.

This rapid urbanization is fueled by migrants moving in large numbers from rural areas to cities in search of jobs, better public services and infrastructure. Most of these migrants are young people, with limited education and work experience, lacking both financial and social capital. What are their chances of having meaningful and productive lives in cities, which are struggling to create jobs and provide even basic services to their citizens?

Cities are drivers of economic development. Over the next ten years, 600 cities will account for 65% of world’s GDP growth. The combined benefits of market proximity, large consumer base and the economics of agglomeration offer considerable potential for job creation, trade and integration in global value chains. But the employment growth in the formal sector in cities, estimated at 2-3 per cent annually, cannot cope with the urban population increase of 4-5 per cent per year.

As a result, young migrants seeking a place to live, often settle in slums and shantytowns. The United Nations estimates that almost one billion people now live in slums across the developing world, and this number is expected to double by 2030. Struggling to find work while coping with acute shortage of basic urban services, such as clean water and sanitation, reliable electricity and transportation, schools, childcare centers, and medical facilities, young city dwellers are unable to find an active or meaningful role within the city’s economy. As a result, many become liabilities to the city instead of positive contributors and often become victims of crime, join gangs or succumb to drugs.

To address these challenges and build better, more resilient and thriving cities for all, we urgently need transformative, large scale solutions, able to generate considerably more business, jobs and social value while leveraging scarce resources. Which cities lead the way in creating economic opportunities for youth? What are their strategies for sustainable growth?

  • As part of a forward-thinking growth strategy, Kigali, Rwanda has attracted millions of dollars of investment in communications and information technology. Visa pioneered mobile-payment systems meant to replace cash and provide opportunities for new commercial ventures. Technology incubators like kLab (Knowledge Lab) are providing open spaces for young IT entrepreneurs to innovate and officials launched free wireless hot spots throughout the city to encourage communication and the growth of digital jobs.
  • Ho Chi Minh City in Vietnam instituted the first national strategy aimed at alleviating urban poverty by improving living conditions through in-situ upgrading and improving the environment through a pro-poor and participatory approach, including providing affordable housing and finance alternatives
  • Oulu, a city in Northern Finland, grew into a powerful wireless industry center based on intense collaboration between its local government, universities and the private sector, in particular the telecom leader Nokia. A regulatory framework provides an enabling environment to small telecom operators to actively participate in Oulu’s industry clusters.

What are other innovative solutions for evolving the fast growing cities into engines of economic opportunities for its young citizens? What are the best models of collaboration between various stakeholders in addressing the challenges of urbanization? And what role can young people play in designing and implementing solutions?

Cities as Drivers of Economic Opportunity for Youth”, a panel moderated by the Citi Foundation will discuss these topics at Making Cents International’s 2014 Global Youth Economic Opportunities Summit, taking place in Washington, D.C. on October 6-8. The panelists are Mr. Leo Martelotto, the President of Junior Achievement Americas Region and Mr Leo Abruzzese, the Global Forecasting Director and Director of Public Policy at the Economist Intelligence Unit. The panel is moderated by Ms. Jasmine Thomas, Program Officer of the International Grant Program at the Citi Foundation.

The Citi Foundation and Making Cents International are partnering on a broader initiative to make the case for why supporting economic opportunity for urban young people matters. In particular, this initiative will highlight the practical features and potential results of models that increase investment in workforce development programs, job opportunities, and other resources that will enable urban youth to meet their employment aspirations and contribute to cities’ growth. This panel at the Global Youth Economic Opportunities Summit marks the launch of this partnership.