The World Bank Group has warned that developing economies could face a major employment crisis as millions of young people enter the labour market without sufficient job opportunities.
In a blog post published on its platform, the institution said demographic shifts across developing countries are creating one of the most significant economic challenges of the coming decade.
According to the bank, about 1.2 billion young people in developing economies are expected to reach working age over the next 10 to 15 years. However, current projections indicate that only about 400 million jobs are likely to be created during the same period, leaving hundreds of millions without access to productive employment.
The President of the World Bank Group, Ajay Banga, said the widening gap between labour supply and job creation could have far-reaching implications beyond economic development.
“This challenge is not only a development issue,” Banga said. “It is an economic challenge and increasingly a national security concern.”
The institution warned that failure to address the employment gap could place pressure on public institutions and contribute to irregular migration, social unrest, and insecurity, particularly in regions with rapidly expanding youth populations.
The bank also noted that the issue has received limited attention at recent global meetings such as the World Economic Forum Annual Meeting, where geopolitical tensions and economic uncertainty dominated discussions.
It urged policymakers to prioritise job creation at upcoming international forums, including the Group of Seven and the Group of Twenty, stressing that early intervention could help transform demographic growth into an economic advantage rather than a destabilising force.
To tackle the challenge, the World Bank said it is pursuing a jobs-focused strategy built on three pillars: infrastructure development, policy reforms aimed at improving the business environment, and support for private-sector expansion.
The institution emphasised that investment in both physical and human infrastructure — including electricity, transportation, healthcare, and education — is essential to attract private capital and stimulate employment.
It also highlighted the importance of predictable regulations and supportive policy frameworks in encouraging entrepreneurship, particularly among micro, small, and medium-sized enterprises, which account for the majority of jobs in developing economies.
In addition, the bank said it is deploying financing tools through its private-sector arms, including equity investments, guarantees, and political risk insurance, to help firms expand and create more employment opportunities.
The World Bank identified five sectors with strong potential for large-scale job creation: infrastructure and energy, agribusiness, primary healthcare, tourism, and value-added manufacturing.
The institution added that addressing the employment gap should not be viewed as a zero-sum competition between developed and developing countries. By 2050, more than 85 per cent of the global population is projected to live in developing economies, representing both the largest expansion of the global workforce and a major source of future consumer demand.
