From Necessity to Economic Opportunity: Turning the work young people do into secure livelihoods
Executive summary of a forthcoming flagship report exploring the livelihood economy, the enterprises and economic activities organised primarily to secure livelihoods, and setting out why five interconnected systems must undergo reform
Highlights
Across low- and lower-middle-income countries (LMICs), job creation is not keeping pace with the number of young people reaching working age. Over 2025-2035, an estimated 1.2 billion young people in LMICs will reach working age. Around 700 million will not stay in education or training, against projected job creation of about 420 million. Secure formal employment will remain out of reach for many, and young people in large numbers are already building working lives by trading, making, growing or providing services, often combining several activities at once.
This is the livelihood economy. The term covers enterprises ans economic activities operated primarily to make a living, not to accumulate capital or pursue sustained growth. Much of this activity begins from necessity because no better income option is available. Nevertheless, they provide valued services, sustain households, and create employment. It is not a vulnerable margin to be cleared away or grown out of, but a large and under-served part of the real economy, one that produces in the order of a third of GDP across LMICs. It is anticipated this niche will only grow more central as 700 million young people come of age over the next decade in countries expected to produce far fewer formal jobs than they need.
The executive summary sets out three livelihood enterprise segments and the five systems that currently fail them namely finance, business support, rules and formalisation, social protection, and data and visibility. These failures compound one another, which is why single-instrument programmes keep underperforming. What is needed instead is a connected architecture, anchored in a low-cost legal status for very small enterprises, with clear roles for governments, financial institutions, large firms, multilateral institutions, enterprise support organisations and youth It networks.
This executive summary previews From Necessity to Economic Opportunity, a full flagship report commissioned by Generation Unlimited and Youth Business International, written by Systemic Innovation, and launching in November. The full report will set out the evidence, case studies and implementation detail behind the argument, alongside the voices of young people themselves.
