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IT’S TIME TO UNLEASH THE POWER OF YOUTH CAPITAL

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By Bhanu Choudhrie

Bhanu Choudhrie

Bhanu Choudhrie

The world’s population has never been younger and nowhere is this trend more pronounced than in emerging markets, home to more than 1.8 billion 15 to 24-year-olds. This is the demographic dividend; the prospect of unleashing youth capital to fuel spectacular growth.

Emerging markets account for more than 50 per cent of the global economy. While growth has stagnated in many developed economies, the speed of change in the BRICs is unprecedented. China apart, they have youthful populations; their energy and potential is apparently limitless.

“Never again is there likely to be such potential for economic and social progress,” according to the United Nations Population Fund.

Yet, in too many of these societies, there is a generational divide. Political leaders, far from exploiting the “youth bulge”, seem frightened by it. They see problems, rather than opportunities. In India, which ahs a youth population of 356 million, it is ‘surplus’ young men; in China, university-educated manual labourers; in Russia, young alcoholics.

Too many young people are trapped in cycles of inequality; social and economic mobility remains elusive; education is sub-standard; youth unemployment and underemployment is alarmingly high and rising; alienation is breeding violence and despair.

Economic progress cannot be sustained if robust health, education and welfare systems are not put in place. The prosperity of a society does not exist in a vacuum; it must be underpinned by social, legal and environmental policies that promote it. Every aspect is intimately linked.

Over the past decade, plenty of conferences and summits have been held to consider the economic and financial implications of the remarkable growth of emerging markets, but generally from the perspective of investors. That focus is too narrow. We cannot ignore the wider issues because a society’s prosperity depends on social cohesion just as much as the promotion of entrepreneurialism.

That’s why C and C Alpha Group, which does business all over the world, set up the Emerging Markets Symposium eight years ago in partnership with Green Templeton College at Oxford University. Experts from across the globe come together under the chairmanship of Shaukat Aziz, former Prime Minister of Pakistan, to focus specifically on the social and welfare issues with which these countries are grappling.

In previous years, the symposium has published reports on subjects such as child health, urbanization and security, but this year our focus is on young people in emerging markets – perhaps the most important subject of them all. Appropriately, of the 45 experts from 20 emerging markets and high-income countries, who were joined by 14 graduate students, one in three were under 30.

The aim is to provide realistic answers to complex issues, identifying unexploited opportunities, and to do that credibly, we need to ensure the voice of this generation is  heard.

Jo Boyden, Professor of International Development at Oxford University, told the symposium that an estimated 200 million young people are failing to achieve their development potential. Young people comprise around 50 per cent of the world’s poor, yet most live in middle-income countries, not the world’s poorest societies.

Professor Boyden heads an innovative research programme, Young Lives, which has been studying the progress of 12,000 children in India, Ethiopia, Peru and Vietnam over the last 15 years. Her team of researchers report dramatic improvements in infrastructure projects during this period, but the divide between rural and urban societies remains the key determinant of educational attainment and life outcomes.

The scale of the social and geo-political challenges faced by emerging economies is immense. The challenge of sustaining economic growth goes hand in hand with tackling human welfare issues.

Young people are disproportionately affected by societal challenges. Youth unemployment is often double the national average in emerging economies – yet these young people who cannot find jobs are often more highly skilled than the generation who are in work. This is happening at a time when traditional social institutions are losing their authority: a perfect storm.

The purpose of the Emerging Markets Symposium, which we have committed to fund for at least another three years, is to persuade policy-makers there are practical, affordable answers to these difficult questions. Failing to answer them is not an option.

We had three days of intensive and informed debate. Our full report will be published later this year, but three key priorities have been identified:

– overhauling education strategies to promote citizenship, critical thinking, entrepreneurism and social skills alongside academic and vocational skills

  • re-designing health systems to make them more youth sensitive, including a more focused approach to mental health problems;
  • greater participation of young people in civic and political life by lowering the voting age to 16, and setting up domestic ‘Peace Corps’ to promote social inclusion

Excluding young people from political systems and failing to prioritise investment in their health, education, well-being and productive capacity undermines the sustainability of these emerging economies.

No one under-estimates the difficulty of achieving change; but the starting point surely needs to be a more positive dialogue between the generations.

Bhanu Choudhrie is founder of C&C Alpha Group, an international private equity business headquartered in London.

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Sunak to use budget to expand apprenticeships in England

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Sunak to use budget to expand apprenticeships in England 1

LONDON (Reuters) – British finance minister Rishi Sunak will announce more funding for apprenticeships in England when he unveils his budget next week, the government said on Friday.

Employers taking part in the Apprenticeship Initiative Scheme will from April 1 receive 3,000 pounds ($4,179) for each apprentice hired, regardless of age – an increase on current grants of between 1,500 and 2,000 pounds depending on age.

The scheme will extended by six months until the end of September, the finance ministry said.

Sunak will also announce an extra 126 million pounds for traineeships for up to 43,000 placements.

Sunak’s March 3 budget will likely include a new round of spending to prop up the economy during what he hopes will be the last phase of lockdown, but he will also probably signal tax rises ahead to plug the huge hole in the public finances.

Sunak is also expected to announce a “flexi-job” apprenticeship scheme, whereby apprentices can join an agency and work for multiple employers in one sector, the finance ministry said.

“We know there’s more to do and it’s vital this continues throughout the next stage of our recovery, which is why I’m boosting support for these programmes, helping jobseekers and employers alike,” Sunak said in a statement.

(Reporting by Andy Bruce, editing by David Milliken)

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UK seeks G7 consensus on digital competition after Facebook blackout

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UK seeks G7 consensus on digital competition after Facebook blackout 2

LONDON (Reuters) – Britain is seeking to build a consensus among G7 nations on how to stop large technology companies exploiting their dominance, warning that there can be no repeat of Facebook’s one-week media blackout in Australia.

Facebook’s row with the Australian government over payment for local news, although now resolved, has increased international focus on the power wielded by tech corporations.

“We will hold these companies to account and bridge the gap between what they say they do and what happens in practice,” Britain’s digital minister Oliver Dowden said on Friday.

“We will prevent these firms from exploiting their dominance to the detriment of people and the businesses that rely on them.”

Dowden said recent events had strengthened his view that digital markets did not currently function properly.

He spoke after a meeting with Facebook’s Vice-President for Global Affairs, Nick Clegg, a former British deputy prime minister.

“I put these concerns to Facebook and set out our interest in levelling the playing field to enable proper commercial relationships to be formed. We must avoid such nuclear options being taken again,” Dowden said in a statement.

Facebook said in a statement that the call had been constructive, and that it had already struck commercial deals with most major publishers in Britain.

“Nick strongly agreed with the Secretary of State’s (Dowden’s) assertion that the government’s general preference is for companies to enter freely into proper commercial relationships with each other,” a Facebook spokesman said.

Britain will host a meeting of G7 leaders in June.

It is seeking to build consensus there for coordinated action toward “promoting competitive, innovative digital markets while protecting the free speech and journalism that underpin our democracy and precious liberties,” Dowden said.

The G7 comprises the United States, Japan, Britain, Germany, France, Italy and Canada, but Australia has also been invited.

Britain is working on a new competition regime aimed at giving consumers more control over their data, and introducing legislation that could regulate social media platforms to prevent the spread of illegal or extremist content and bullying.

(Reporting by William James; Editing by Gareth Jones and John Stonestreet)

 

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Britain to offer fast-track visas to bolster fintechs after Brexit

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Britain to offer fast-track visas to bolster fintechs after Brexit 3

By Huw Jones

LONDON (Reuters) – Britain said on Friday it would offer a fast-track visa scheme for jobs at high-growth companies after a government-backed review warned that financial technology firms will struggle with Brexit and tougher competition for global talent.

Finance minister Rishi Sunak said that now Britain has left the European Union, it wants to make sure its immigration system helps businesses attract the best hires.

“This new fast-track scale-up stream will make it easier for fintech firms to recruit innovators and job creators, who will help them grow,” Sunak said in a statement.

Over 40% of fintech staff in Britain come from overseas, and the new visa scheme, open to migrants with job offers at high-growth firms that are scaling up, will start in March 2022.

Brexit cut fintechs’ access to the EU single market and made it far harder to employ staff from the bloc, leaving Britain less attractive for the industry.

The review published on Friday and headed by Ron Kalifa, former CEO of payments fintech Worldpay, set out a “strategy and delivery model” that also includes a new 1 billion pound ($1.39 billion) start-up fund.

“It’s about underpinning financial services and our place in the world, and bringing innovation into mainstream banking,” Kalifa told Reuters.

Britain has a 10% share of the global fintech market, generating 11 billion pounds ($15.6 billion) in revenue.

The review said Brexit, heavy investment in fintech by Australia, Canada and Singapore, and the need to be nimbler as COVID-19 accelerates digitalisation of finance, all mean the sector’s future in Britain is not assured.

It also recommends more flexible listing rules for fintechs to catch up with New York.

“We recognise the need to make the UK attractive a more attractive location for IPOs,” said Britain’s financial services minister John Glen, adding that a separate review on listings rules would be published shortly.

“Those findings, along with Ron’s report today, should provide an excellent evidence base for further reform.”

SCALING UP

Britain pioneered “sandboxes” to allow fintechs to test products on real consumers under supervision, and the review says regulators should move to the next stage and set up “scale-boxes” to help fintechs navigate red tape to grow.

“It’s a question of knowing who to call when there’s a problem,” said Kay Swinburne, vice chair of financial services at consultants KPMG and a contributor to the review.

A UK fintech wanting to serve EU clients would have to open a hub in the bloc, an expensive undertaking for a start-up.

“Leaving the EU and access to the single market going away is a big deal, so the UK has to do something significant to make fintechs stay here,” Swinburne said.

The review seeks to join the dots on fintech policy across government departments and regulators, and marshal private sector efforts under a new Centre for Finance, Innovation and Technology (CFIT).

“There is no framework but bits of individual policies, and nowhere does it come together,” said Rachel Kent, a lawyer at Hogan Lovells and contributor to the review.

($1 = 0.7064 pounds)

(Reporting by Huw Jones; editing by Jane Merriman and John Stonestreet)

 

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