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When the World Development Report 2007 is published this autumn the flagship World Bank document will for the first time focus on young people. Under the title Development in the next Generation, the report will examine prospects and challenges for people between the ages of 12 and 24.

The bank is not the only institution turning its attention to this group, however. In both public and private sectors an increasing number of organisations are focusing on a generation of people they believe not only need assistance, since most live in developing countries, but also represent a potential engine of global growth.

Through its Global Development Alliance, the US Agency for International Development has been putting more resources into young people in recent years. Through partnerships with organisations such as the International Youth Foundation, it is supporting programmes such as youth development in the Balkans, technology training in Latin America and the Caribbean and the Education and Livelihood Skills Alliance, a three-year initiative to help young people who live in the southern Philippine island of Mindanao.

Demographic changes are partly behind the shift of focus, with what some call a bulge of young people materialising. Of the world population, 2.8bn people are under 25 years old and the 1.1bn people that are today between the ages of 15 and 24 represent the largest cohort ever to enter the transition to adulthood, according to the World Bank*.

What is more, it says, these numbers have not reached their highest level. By 2015, there will be 3bn young people in the world with 2.5bn living in developing countries. In Africa and south Asia, for example, children and youth make up more than 60 per cent of the total population.

Such numbers will stretch governments’ capacity to provide services such as healthcare and education.

“These are people who will be demanding services that are more expensive per person than primary education, as they will need to go through secondary school and university,” says Emmanuel Jimenez, director of the World Development Report Team 2007.

“So there’s a potential fiscal challenge out there for many countries.” This is also a generation that is more vulnerable than most. Rates of youth unemployment are three times higher than those of adults and, at a time of transition, young people are often more susceptible to risky behaviour that can result in early pregnancy (every year, 13m girls between the age of 15 and 19 give birth) and disease, with young people accounting for nearly half of all new HIV/Aids infections.

“There’s a cohort that will be the largest youth bulge in the history of the world that may never be seen again,” says Bill Reese, president and chief executive of the International Youth Foundation.

“And there is an increasing awareness among policy makers that this cohort needs more attention as it makes the transition from childhood to adulthood.”

However, with the right policies in place, many reckon this demographic phenomenon could present significant opportunities. With fertility rates falling in OECD countries and contained in developing countries, the proportion of working people will rise in comparison to that of children and older people, who are not in employment.

“The next generation is the next potential gain to the economy, because as they enter their working life, they’ll be the driver of a declining dependency ratio in many countries,” says Mr Jimenez. “So for a 20- to 40-year period, these countries will have this demographic boon.”

For countries to reap the fruits of this boon, appropriate policies have to be in place. For the World Bank, this means looking at the various stages of transition young people experience – leaving school, seeking employment, creating families, maintaining health and becoming active citizens.

In addition, the bank has identified a need for “second chance policies” to assist those that – through circumstances beyond their control or poor choices of their own – require another opportunity to reintegrate into formal systems such as school, training programmes or jobs.

Here, governments and institutions are not the only players. With the private sector by far the largest employer, companies have a huge role in enhancing the employability of young people – not only to further their corporate responsibility objectives but also from self interest, for these are future employees and consumers.

Linda McGinnis, lead economist on children and youth at the World Bank’s Human Development Network, sees internships as a powerful tool in the corporate sector’s hand. “Having standard internship programmes that provide young people with the opportunity to gain quality experience is crucial,” she says.

Disadvantaged youth given life skills and training, she argues, can be put through internships that – even without a guarantee of work at the end of the term – provide valuable experience to put on a CV. “Internships focus on helping people find jobs and become more employable,” she says.

Not all young people need to enter employment to contribute to the economy, however. Entrepreneurship is seen as a powerful driver of growth and many organisations are working to encourage young people to start their own businesses.

Youth Business International, a global network run under the auspices of the International Business Leaders’ Forum, provides young people with business mentoring. Once introduced to the idea of entrepreneurship and having developed workable business plans, young people need the spark to turn those plans into enterprises, says Andrew Devenport, executive director of YBI. “That’s our part of the bandwidth,” he explains.

“Eighty-five per cent of new businesses in the world are family businesses and in a family business, you have a brother, mother, father or uncle who’s providing that mentoring role,” he says. “We’re really replacing those elements for the many millions of young people that don’t have that available.”

When it comes to financing, banks look more favourably on young people in a mentorship scheme. “It’s so much more likely that their business will survive as a result of having this expertise that this in itself is a form of collateral,” says Mr Devenport.

YBI is also working with another entrepreneurship organisation, Youth Business Albania, on a joint initiative giving young people grants to start businesses. More than 100 young people applied for the first grants, and seven have been chosen for support through the YBA programme, with grants ranging from $1,500 to $4,000.

While young entrepreneurs contribute to the economy by creating jobs, some are even seen as part of a generation that will care more about social and environmental issues. The idealism and energy young people display when it comes to such issues are things the World Bank hopes to tap into through its lending to projects that engage youth in challenges such as water shortages, waste disposal and air pollution, as well as long-term issues such as climate change.

These and other initiatives are seen by Ms McGinnis as evidence that a new approach is being taken to this growing chunk of the world’s population. “There’s a shift in understanding why young people are different and why they need a specific focus,” she says. “And young people are the next generation of leaders, voters, parents – so if you focus on positive investments in young people, you’re setting the stage for your next generation.”