The digital economy: Why it won’t take youth jobs — but empower them

As someone relatively new to the field, it’s hard not to notice the multitude of global conferences that gather experts to address pressing challenges. One recurring and urgent issue is youth unemployment. According to the International Labour Organisation (ILO), as of 2023, 64.9 million young people were unemployed worldwide—a notable decrease from previous years. 

But what are we still overlooking? What’s preventing nearly 65 million young people from earning and sustaining a livelihood? These figures are not just numbers; they represent individuals with untold stories—stories of hope, aspiration, and challenge, shaped by missed opportunities that have prevented many from realizing their full potential.

So, what lies at the heart of this disjoint between potential and reality? For millions of young people, the path to making a living is often complex and shaped by a series of systemic barriers. Many struggle to access formal employment due to the high demand for skilled labour and the limited supply of decent jobs.  

The situation is even more pronounced for young women, whose employment-to-population ratios can be up to 25 percentage points lower than those of young men in many countries, as per 2022 data shared by ILO. Youth in rural areas face additional challenges—from limited access to quality education and fewer non-agricultural job opportunities, to mobility constraints that restrict access to urban labour markets. 

As a result, many young people turn to the informal sector—either by launching their own start-ups or by working for small, often informal enterprises. Yet neither option offers a clear or easy path. For instance, self-employed youth in the informal sector often face limited access to finance. Financial institutions are typically reluctant to lend to young people, fearing they may be unable to repay due to a lack of collateral or credit history. Moreover, youth-led enterprises often operate outside formal networks, making it difficult to access high-value markets, learn best practices and expand their customer base. Many also lack the skills needed to sustain and grow their businesses—such as basic financial literacy or business management skills. 

Even in the formal sector, young people encounter significant obstacles. Many entry-level jobs require prior experience, effectively excluding first-time job seekers. Others offer only temporary or low-wage contracts with limited security or benefits. A persistent mismatch between education and labour market needs also leaves many youths without the digital, technical, or soft skills employers demand. For young women and rural youth, social norms and geographic isolation further limit access to formal job opportunities. 

However, amid the shortcomings of traditional systems, a new set of opportunities is emerging. The rise of the digital economy is transforming the nature of income generation, offering young people tools to not only find work, but to create it on their own terms.  

Economists have long expressed concerns that automation and technological advancements might one day displace human labour, potentially leading to increased unemployment. While such concerns are valid, technology also holds immense potential to drive socio-economic empowerment—particularly for the younger generation. With digital tools increasingly making tasks easier, faster, and more cost-efficient, the question becomes: how can we harness technology to expand youth employment opportunities, both through self-employment and traditional jobs? 

In many parts of the world, digital financial inclusion is proving to be a game changer—particularly for self-employed youth. Mobile wallets and fintech platforms are helping young entrepreneurs overcome traditional barriers to accessing finance.  

In Asia’s vast rural landscapes, the digital economy is not just a lifeline—it’s a lever for transformational growth. In rural India, for instance, mobile payment systems, e-commerce platforms, and online marketplaces are enabling young people to overcome geographic isolation, reach broader customer bases, and participate in regional economies in unprecedented ways. By digitising small businesses, young entrepreneurs are not only increasing their profits, but also formalising their operations, gaining access to insurance and microloans that protect and grow their ventures. 

In Sri Lanka, mobile-based access to credit, combined with financial literacy programs and peer-driven marketplaces, is empowering thousands of young entrepreneurs—especially rural women—to grow their businesses, reach new markets, and drive local job creation. These tools do more than expand financial access; they foster formalisation, self-reliance, and long-term economic transformation. 

Likewise, in Cambodia’s provinces, digital cooperatives are helping small farmers pool resources and negotiate better prices through apps that link them directly with buyers. Such innovations ensure rural youth can actively shape local value chains rather than be mere participants. 

On the employment side, digital tools are helping close the gap between the skills young people have and those demanded by today’s job market. From online learning platforms to remote job portals, youth are increasingly accessing flexible training and work opportunities.  

In India, countless young people are signing up for digital courses in bookkeeping, graphic design, and social media marketing, then using these skills to freelance or support local businesses hungry for online visibility. 

AI-based job matching, digital literacy programmes, and gender-responsive e-learning are enabling young people, particularly women, to overcome social and geographic barriers and step into the labour market on stronger footing. 

If we are to truly address the global challenge of youth unemployment, we must move beyond fragmented solutions and invest in the full potential of young people. That means scaling up inclusive digital infrastructure, embedding financial and digital literacy in national systems, and forging partnerships that center youth as co-creators—not just beneficiaries. The digital economy is not a perfect fix, but it’s one of the strongest tools we have. The real challenge is whether we are willing to use it to create lasting change. 

—The author, Sara Keshaish, is an enterprise development officer with Education Above All Foundation, which works in 21 countries across Asia—including India, Sri Lanka, and Cambodia—partnering with organisations like Gojo Inc to expand financial literacy for young entrepreneurs.