The latest global data from the Office for National Statistics (ONS) shed light on a growing concern across the Asia-Pacific (APAC) region: youth unemployment is on the rise, with 1 in 4 young people not in employment, education, or training (NEET). This alarming trend poses significant economic and social risks, threatening to widen already significant skills gap and making talent alignment more critical than ever for businesses fit for the future.  

The youth unemployment crisis in APAC 

Youth unemployment in APAC isn’t a new issue, but recent trends indicate that it’s an accelerating crisis. The latest figures present us with the reality that around 25% of young people in the region are NEET, highlighting a failure in both education and employment systems in providing sufficient opportunities. Economic turbulence, automation, and shifting industry demands have only exacerbated the issue, leaving many young people struggling to transition from education to meaningful employment. 

It looks like several factors have contributed to this growing challenge including: 

• Economic slowdown: Countries like China, Japan, and South Korea have experienced significantly slower economic growth, which has in turned caused a reduction in hiring activity. 

• Mismatched skills: Employers in high-growth industries such as technology and healthcare have been reporting difficulty in finding candidates with the right skills. 

• Impact of automation: Traditional entry-level jobs are being replaced by AI and automation, making it harder for young workers to enter the workforce. 

• Structural barriers: Many young people face difficulties accessing training and reskilling opportunities, particularly in developing economies. 

The widening skills gap 

The skills gap across the APAC region is continuing to grow, creating a critical need for better alignment between education and workforce demands. Many industries, including advanced manufacturing, IT, and renewable energy, report severe shortages of skilled professionals. However, vocational training and higher education systems in some APAC economies are struggling to keep up with rapid technological change. 

A key factor exacerbating the skills gap is the lack of investment in future-proof training. In countries such as Indonesia, Vietnam, and India, the education sector has not yet fully adapted to the needs of emerging industries. This mismatch means that even when jobs are available, young people may lack the necessary skills to fill them. 

The role of employers in addressing this crisis 

Employers have a critical role to play in bridging the gap between talent supply and demand. Companies across the region need to take proactive steps to ensure that young people can access meaningful career pathways. Here are some potential initiatives: 

• Expanding apprenticeships and internships: More structured, on-the-job training programmes can help young people transition smoothly into the workforce. 

• Investing in upskilling and reskilling: Businesses should partner with educational institutions to develop targeted training programmes aligned with industry needs to help stay abreast of change and future-proof their organisation and their employees. 

• Offering more flexible employment opportunities: Part-time work, gig employment, and hybrid models can provide young workers with better entry points into the labour market. 

• Strengthening employer-academic partnerships: Collaboration between industries and educational institutions can help create curricula that match workforce demands for the workforce of the future.  

Policy interventions to support youth employment 

Governments across APAC are already taking steps to address youth unemployment, but sustained efforts are needed to ensure long-term success. One key priority is enhancing vocational training programmes, expanding access to technical education to equip young people with the skills most in demand. Providing targeted financial incentives can also drive better employment outcomes, with tax breaks for businesses that hire young workers and subsidies to support training initiatives. 

At the same time, improving digital literacy is essential as automation and AI continue to reshape industries, ensuring young people are prepared for the evolving job market. Strengthening regional collaboration will also play a crucial role, with APAC countries benefiting from shared best practices and aligned labour market strategies to build a skilled and mobile workforce. 

The road ahead 

Failing to tackle the youth unemployment crisis in APAC could have long-term consequences, stifling economic growth and deepening social inequality. A generation shut out of the workforce risks not only financial instability but also broader societal discontent. However, by strengthening collaboration between businesses, governments, and educational institutions, the region has a chance to build a more resilient and future-ready workforce. 

Urgent action is needed to equip young people with the skills required for an evolving job market. APAC’s economic future hinges on its ability to close the skills gap and create meaningful pathways into employment – before the challenge becomes insurmountable.