Young people don't possess the right skills for jobs Describe how the world of work is changing and what this means for today's school leavers The world of work is currently out of sync with the world of education. Demand for high-skill labour is now growing faster than supply, while demand for low-skill labour remains weak. We estimate that by 2020 the global economy could face serious imbalances: nearly 40 million fewer workers with tertiary education than employers will need; a 45 million shortfall of workers with secondary education in developing economies; and a surplus of as many as 95 million low-skill workers. Further, labour's overall share of available wealth, or the share of national income that goes to worker compensation, has fallen; and income inequality is growing as lower-skill workers - including 75 million young people - experience unemployment, underemployment, and stagnating wages This dangerous mismatch between the needs of employers and of job-seeking youngsters is not only resulting in high youth unemployment but arresting economic development. Later this month McKinsey will release a 9-country survey that examines the problem in detail and proposes a number of steps-some practical, some radical- that educators, employers, government, and young people can take. How can businesses focus on delivering returns to investors while also addressing the societal problem of youth unemployment? Too often these objectives are presented as a question of either, or; which is a false choice. Adam Smith, in the Theory of Moral Sentiments, recognised that successful business and a healthy society are interdependent. When talking about youth unemployment, we must remember that these young people are our future workforce, future consumers and, most importantly, the generation which will determine the destiny of different businesses. Serving shareholders and serving society should not be ideas in tension. In fact, I would go further and say that executives need to redefine the way we govern, manage and lead corporations, to infuse throughout businesses the value of serving shareholders by serving society. In the short-term, some companies are already beginning to address the problem, through business-led initiatives such as Working for YOUTH and Think Forward, and through other initiatives such as technical universities and apprenticeship programmes. Never has the need been greater for business leaders to weigh in and contribute solutions. If we do not, if we fail for example to help address youth unemployment, our long-term business performance and, ultimately, our economy will suffer. Are fears of a 'lost generation' compounded, or is it just hype? It is important to understand that the problems underlying youth unemployment are systemic and not limited to one geographic or economic region. The trend is a global one. More than half of young people in Greece and South Africa are unemployed, as are more than a third of Italians and Spaniards, a quarter of those in North Africa and the Middle East, and about one in six Americans. Education is the single most important driver of social mobility. But, given the mismatch between the skills we have and the skills demanded, it should come as no surprise that young people are frustrated and facing an uncertain future. And to understand the implications, we need not look further than the recent upheavals dominating headlines in the last year or so: riots in Greece, the Arab spring, or the Occupy movement. Dominic Barton is global managing director of McKinsey & Company How to win £10,000 The Telegraph Media Group has teamed up with the Henry Jackson Initiative to launch a national prize on how to solve youth unemployment, giving £10,000 in cash to the person who comes up with the best ideas. The competition invites readers to submit an essay outlining measures for reducing youth unemployment. Participants must submit an essay of no more than 1,000 words, in English, on measures for reducing youth unemployment to info@henryjacksoninitiative.org, or by mail to: HJI-Reed Prize on Youth Unemployment, The Henry Jackson Initiative, 8th Floor, Parker Tower, 43 - 49 Parker Street, London, WC2B 5PS. Full terms and conditions at telegraph.co.uk/essay