Hult Prize 2019 Challenge PDF

Preview

Summary

Download Hult Prize 2019 Challenge PDF

Description

The Global Youth Challenge Solving Youth Unemployment

for us,

4

FOR US, BY US: The global youth challenge

cONteNTS Announcement Letter from the Founder

3

Can you build the foundations of a venture that will provide meaningful work for 10,000 youth within the next decade?. ............................................................................................3

1. Definition: The Power of One

5

2. A Crisis of Youth Engagement

6

Why Are Millions of Youth Disconnected rom Meaningful Work? .......................................7

3. Help Is Not on the Way

8

3.1. Conventional Solutions That Don’t Work #1: More Degrees ...............................................................................................................9 3.2. Conventional Solutions That Don’t Work #2: Subsidized Public Sector “Jobs” ...............................................................................10 3.3. Conventional Solutions That Don’t Work #3: Chasing the American (or European) Dream ..............................................................11 3.4. Conventional Solutions That Don’t Work #4: Building More Accelerators and Incubators ...............................................................12

4. For Us, By Us

13

4.1. Learning: Creating pathways to meaningful work through improved skills ................14 4.2. Matching: Connecting buyers and sellers on multi-sided platforms ..........................15 4.3. Sourcing: Building a business on hidden talent and productive capabilities ............15 4.4. Creating ......................................................................................................................16

5. The 1.2 Billion Faces of “Youth”

18

5.1. Demographics: A Tale of Two Realities ......................................................................19 5.1.1. Ascending Market Countries ...................................................................................20 5.1.2. Aging Countries .......................................................................................................20 5.2. Levels of Formal Education: More Is Not (Necessarily) Better ...................................21

6. Getting to Work

22

DRAFT V1

5

FOR US, BY US: The global youth challenge

Announcement Letter from the Founder

I founded the Hult Prize in 2009 to inspire young people to change the world through business. From the outset, we thought about changing the world by creating market-based approaches that would ensure that people everywhere have access to basic human needs in the form of clean water, food, safety, and education. The resulting impact has been amazing. We’re no longer just a prize, we’re a global movement— with youth on five continents leading the way and a community of more than one million people. But I have learned something important in the past decade: satisfying basic human needs isn’t the end, it’s the beginning. We’ve known for a long time that violent revolutions don’t tend to happen in the poorest places but in places where people’s lives are improving. Why? Because people—particularly young people—feel the sting of exclusion even more sharply when they live in an environment that is prospering unequally, when every day they must see and touch the barriers that are shutting them out. For our 10th-year anniversary challenge, we are flipping the lens. The focus of the Hult Prize in 2019 will be on the source of the single most powerful thing that has driven the Prize for the past decade: YOU! The world’s youth. We are asking you to do something no more complicated and no less daunting than creating a future for each other by leveraging the power of the Hult Prize.

The challenge for each team involved in the 10th-anniversary Hult Prize will be to build the foundations of a venture that will provide meaningful work for 10,000 youth within the next decade. But there’s more. Because we have never been stronger as a united collective and have rapidly moved past a single winning enterprise each year, we want to follow through as a community and, as one single Hult Prize community, create meaningful work for 1,000,000 youth over the next 10 years. That’s precisely what this year’s Hult Prize Challenge asks you to do.

Ahmad AShkAr DRAFT V1

6

FOR US, BY US: The global youth challenge

“The worst thing that can happen to anybody is to get up every day and start the day believing that every one of your tomorrows will be just like yesterday. Millions and millions of young people believe that today.” —President William Jefferson Clinton

DRAFT V1

7

FOR US, BY US: The global youth challenge

1. DEFINITION

ThE POWeR OF ONE We are challenging you to create opportunities for meaningful work for 10,000 youth. But you will need to start with just one. So what will work for that one look like? “Meaningful work” as defined by the Hult Prize can take many forms. Two conditions of meaningful work are as follows

It must be paid and offer a minimum of 10 hours of employment per week It must create positive social impact–“purpose.”

"Another way of looking at the . . . rise in joblessness is that it represents a failure of entrepreneurial imagination. Why haven’t smart innovators figured out ways to make money by employing the jobless?" –Edward Glaeser, “Secular Joblessness”

8

FOR US, BY US: The global youth challenge

2. A Crisis Of YOuth EngAGemenT Over the past decade, more than a million young people around the world have devoted their energy, insights, and entrepreneurial commitment to finding solutions to some of the world’s greatest challenges. The growth of the Hult Prize is evidence of the astonishing engagement of youth around the world in building a better future for themselves and others. Nevertheless, while we at the Hult Prize rightly celebrate the outpouring of pragmatic empathy we have witnessed as the Prize has grown, we also have had to face a difficult reality: For every one young person with the commitment,

Figure 1:

Figure 2:

HOW YOUNG PEOPLE VIEW THEIR FUTURE EMPLOYMENT PROSPECTS, 2017

YOUNG PEOPLE'S IDEAL JOB, 2017

capabilities, and (importantly) privilege to have participated in the Hult Prize, more than 50 others lack opportunity and are fearful about the future. See Figure 1. Globally, youth (defined as ages 15-35) are three times as likely as adults to be unemployed.1 One in five youth globally is neither employed, engaged in formal education, or involved in training.2 What is worse is that, over the decade since we founded the Hult Prize, the global prospects for youth employment have gotten worse. The youth labor force participation rate and the youth employment-to-population ratio have both fallen in the past decade. See Figure 2. At the same time, we have seen a surge in economic migration among our youth, and many are taking lifethreatening risks as they search for greater opportunity. For example, since 2010, the rate of migration from sub-Saharan African to Europe has doubled, with nearly a million people— overwhelmingly youth—having made the journey. During the same period, populism has surged in Europe and the United States, driven to a significant extent by aging populations in rural places and small cities that are fighting back against the economic dominance of large cities, which are siphoning off a generation of young people who are seeking opportunity.3

Lack of opportunity for the younger generation, combined with fear of change among the older generation, has created a volatile global mix. 1 2 3

International Labor Organization (2017). World Economic Forum (2018). Auerswald and Yun (2018). DRAFT V1

WHAT YOU CAN CHANGE WITH YOUR VENTURE BARRIERS TO OBTAINING MEANINGFUL WORK Even young people who have the skills the market demands are often excluded from meaningful work because they can’t access information about relevant opportunities, or because they are excluded by degree and credentialing requirements.

Why Are Millions of Youth Disconnected from Meaningful Work?

Lack of Skills Youth with higher level skills that are better matched to current and future workplace needs have greater access to meaningful work than those who lack such skills. Lack of Mobility / Geographic Inequalities / Cost of Real Estate in Cities Geography and economics create significant barriers for youth seeking access to meaningful work, even when they have the required skills and credentials. Even in the digital age, many jobs require an in-person presence, and jobs are disproportionately concentrated in the world’s largest cities. These cities are also the world’s most expensive places to live, which makes it difficult for a young person to start a life where the best jobs are. Commuting to jobs in large cities is also costly and time consuming. Lack of Confidence Finally—and tragically—many youth are disconnected because they have given up on finding meaningful work even before they have really started. Early experiences have taught them that privilege or connections—not hard work and determination—lead to a better future. These are difficult experiences to overcome. Youth also may doubt their own abilities or doubt the extent to which any action they take will substantively alter their future life path.

WHAT YOU CAN’T (EASILY) CHANGE BUT SHOULD UNDERSTAND Poor Public Policy Creating meaningful work for youth is a stated priority of almost every government in the world—elected or unelected, rich nation or poor nation, global North or global South. However, almost every government in the world also protects powerful incumbent firms; transfers net resources from the young to the old to support healthcare and social security programs; and enforces restrictive labors laws that favor existing workers over new entrants. In short, almost every government in the world systematically disfavors youth. The funding that does go to “youth” is mostly directed to colleges and universities, which—for reasons we elaborate on below—are not the pathways of broad-based opportunity they are frequently said to be.4 The reality then is that—notwithstanding proclamations and election speeches in country after country around the world—the median net effect of government public policy on providing access to meaningful work for youth is negative.

the ability to deliver or those with the ability to pay? Youth know the answer to this question: Where productive work is fairly rewarded, youth will direct their energy toward building the new. Where political advantage is rewarded, youth will direct their energy toward pleasing the old. And where neither is rewarded, youth will do whatever they can to get by.5 Macro Disruptions No one escapes war, macroeconomic collapse, or environmental devastation. Technological Disruption The advance of technology over the past four centuries has fundamentally and irreversibly transformed the human experience.6 That process is not over. Youth in the current generation will have to adapt to a rapidly changing world, just as youth have had to do for a dozen generations. The difference today is that youth can expect to live easily twice as long as their counterparts from just a century ago. So, over your lifetimes you and your peers will need to adapt and evolve more effectively than any generation before you. This is neither good nor bad. It just is.

Cronyism, Favoritism, and Corruption 4

Who wins in any given country: The best or the best connected? Those with

5 6

Bessen (2015); Caplan (2017). Baumol (1991). Auerswald (2017).

10

FOR US, BY US: The global youth challenge

When drafting this year’s challenge, we drew from reports by international organizations that have dedicated themselves to improving employment prospects for the world’s youth for more than a decade. National corporations and governments everywhere have also placed the creation of economic opportunities for youth at the top of their agendas.

3.

help Is Not on the Way

So why is the situation getting worse? The reason is simple: The underlying incentive systems around the world, whether in governments, universities, or corporations, do not favor youth.

• Governments in many places are run by incumbent political and economic elites, not by democratically elected officials. With few exceptions, those elites are not young people, and they are more interested in protecting their positions of privilege than in opening up new market spaces to create opportunities for youth.7 • Where governments are democratically elected, the political parties in power are inevitably beholden to the interests of their largest financial backers. Those financial backers are not young people, and opening up new market spaces for youth is not their likely priority. • Private universities are the same: While ostensibly in business to serve youth, they are functionally structured to serve the interests of their largest donors and senior faculty. Those donors and faculty are not young people. Vanity projects (stadiums, endowed chairs, and the like) take precedence over innovative investments aimed at creating large-scale opportunities for youth to engage in meaningful work.

• Large corporations fully understand the imperative of serving youth as customers but they have little incentive to nurture youth as workers. Why train a young person who will likely walk away with the skills they have been provided at considerable cost? Corporate hiring managers likewise have little incentive to hire unproven candidates and give youth an opening in the workforce. Again, there are significant exceptions (for example, the German apprenticeship model), but large corporations in general have not had adequate incentives to create largescale opportunities for youth—if they had, they would be doing so already. Good intentions have not proven sufficient to overcome misaligned incentives. Whatever proclamations and reports might say to the contrary, help is not on the way. Without greater creative engagement by you—today’s global youth—the opportunities you seek will not be found. 7

Ul Haque (2017). DRAFT V1

11

FOR US, BY US: The global youth challenge

3.1. Conventional Solutions That Don’t Work #1

At the top of the list of conventional solutions that don’t work is education. More often than not, the search for education translates into increasing numbers of students entering formal higher education systems. In some countries, particularly the United States, this means incurring debt to access future opportunity; in other countries it means spending years in an often vain quest to fill one of the limited number of publicly supported openings at a domestic university, or incurring the enormous cost of studying abroad. An alternate vision of education would be to transform the primary school system so that it can prepare children to enter the workplaces of the future. Decades of reliance on the first solution—seeking a formal higher ed degree that often is disconnected from the experience of work—has not universally improved young people’s economic prospects. Instead, it has created a new and growing category worldwide: unemployed degree holders.8 As for the second category, improving primary school education is obviously a good idea! We at the Hult Prize believe that governments and corporations around the world should commit to investing in the intellectual and emotional education of the youngest

More degReeS humans, ages zero to three years old, at 100 times current levels (which is 100 times next-to-nothing). But improving primary school education will not help the millions of young people around the world who are already despairing and disconnected. Advocacy for one category of societal initiatives—however worthy—must not be an excuse for failing to address the most pressing need of today’s youth: opportunities to engage in meaningful work. Neither growing the higher education industry nor improving primary school education are answers to today’s global youth opportunity challenge.

8

In many cases, those who begin such courses of study do not finish, thereby incurring debt but never receiving the economic rewards reserved for degree holders. For more, see Caplan (2017).

DRAFT V1

12

FOR US, BY US: The global youth challenge

3.2. Conventional Solutions That Don’t Work #2

The solution to the challenge of youth employment worldwide is not government-subsidized checks of any type. It is a massive, businessled increase in opportunities to do meaningful work. Another approach that doesn’t work is mistaking a government-subsidized paycheck for a value-creating job. This is what happens when government creates subsidized work opportunities for youth that are disconnected from the real economy. All this creates is the illusion of a solution. Sure, the “beneficiaries” of such programs temporarily receive paychecks, but because they do not learn marketrelevant skills, they are not long-term prospects for economic self-sufficiency. Nothing has changed for them, except now they are older and have lost valuable time they should have been using to develop their capacities.9

SubsIdized PublIc SEctor “JObs”

The same holds for Universal Basic Income and other income-support schemes. While often represented as a visionary solution to the problem of income inequality, these schemes really represent an abdication of responsibility for doing the hard work of building new ventures that will provide meaningful work to all members of society, including youth.

9

Card et al. (2010). DRAFT V1

13

FOR US, BY US: The global youth challenge

3.3. Conventional Solutions That Don’t Work #3

ChasINg The

AMerIcaN (or europeAN)

dReaM Even if rich countries were moving in the direction of more open borders— which, sadly, most are not—migration would still leave millions of youth behind in the countries of their birth.

The desperation among today’s youth in stillpoor countries continues to be great.

Enthusiasm for one social good (in this case, increased migratory freedom) must not be an excuse for failing to address the challenge of creating meaningful work opportunities for youth in their countries of birth. Following the end of World War II, millions of ambitious people in poor countries around the world shared a singular dream: to begin a new life in the United States. Two of the three lead authors of this case are the children of parents who came to the United States in that era, and our parents’ dreams were fulfilled: They were able to raise their families in America, and they prospered. The desperation among today’s youth in still-poor countries continues to be great. The perceived gains from migration are so significant that millions of young people every year undertake long and perilous journeys in the hope of grabbing onto the bottom rung of

ladders of opportunity in the United States and Europe. The Hult Prize is well aware that, from a historical standpoint, the benefits of open borders and increased voluntary migration are indisputable.10 But this year’s Hult Prize Challenge—like all that have come before—is about the future, not the past. In the past, rich countries grew economically and poor countries stagnated. We are now well into the second decade in which the opposite has been true: once-poor countries are growing economically and rich countries are stagnating. To move, for example...