Hult Prize 2019 Challenge

The Global Youth Challenge
Solving Youth Unemployment
for us,
1
4 FOR US, BY US: The global youth challenge
cONteNTS
Announcement Letter from the Founder 3
Can you build the foundations of a venture that will provide meaningful work for 10,000
youth within the next decade?..............................................................................................3
1. Definition: The Power of One 5
2. A Crisis of Youth Engagement 6
Why Are Millions of Youth Disconnected rom Meaningful Work?........................................7
3. Help Is Not on the Way 8
3.1. Conventional Solutions That Don’t Work #1:

More Degrees................................................................................................................9

Subsidized Public Sector “Jobs” ................................................................................10

Chasing the American (or European) Dream...............................................................11

Building More Accelerators and Incubators................................................................12
4. For Us, By Us 13
4.1. Learning: Creating pathways to meaningful work through improved skills.................14
4.2. Matching: Connecting buyers and sellers on multi-sided platforms...........................15
4.3. Sourcing: Building a business on hidden talent and productive capabilities .............15
4.4. Creating.......................................................................................................................16
5. The 1.2 Billion Faces of “Youth” 18
5.1. Demographics: A Tale of Two Realities.......................................................................19
5.1.1. Ascending Market Countries....................................................................................20
5.1.2. Aging Countries........................................................................................................20
5.2. Levels of Formal Education: More Is Not (Necessarily) Better....................................21
6. Getting to Work 22
DRAFT V1
Announcement Letter from the Founder
I founded the Hult Prize

in 2009 to inspire young
people to change the
world through business.
From the outset, we thought about changing the world by creating market-based
approaches that would ensure that people everywhere have access to basic
human needs in the form of clean water, food, safety, and education. The resulting
impact has been amazing. We’re no longer just a prize, we’re a global movement—
with youth on five continents leading the way and a community of more than one
million people.
But I have learned something important in the past decade: satisfying basic human
needs isn’t the end, it’s the beginning.
We’ve known for a long time that violent revolutions don’t tend to happen in the
poorest places but in places where people’s lives are improving. Why? Because
people—particularly young people—feel the sting of exclusion even more sharply
when they live in an environment that is prospering unequally, when every day they
must see and touch the barriers that are shutting them out.
For our 10th-year anniversary challenge, we are flipping the lens. The focus of the
Hult Prize in 2019 will be on the source of the single most powerful thing that has
driven the Prize for the past decade: YOU! The world’s youth.
We are asking you to do something no more complicated and no less daunting

than creating a future for each other by leveraging the power of the Hult Prize.
The challenge for each team involved in the 10th-anniversary

Hult Prize will be to build the foundations of a venture that
will provide meaningful work for 10,000 youth within
the next decade.
But there’s more. Because we have never been stronger as a united collective
and have rapidly moved past a single winning enterprise each year, we want to
follow through as a community and, as one single Hult Prize community, create
meaningful work for 1,000,000 youth over the next 10 years.
That’s precisely what this year’s Hult Prize Challenge asks you to do.
Ahmad Ashkar
DRAFT V1
“The worst thing that can

happen to anybody is to
get up every day and start
the day believing that every
one of your tomorrows
will be just like yesterday.
Millions and millions of

young people believe that today.”
—President William Jefferson Clinton
DRAFT V1
1. DEFINITION
THE POWER OF ONE

We are challenging you to create opportunities for meaningful
work for 10,000 youth. But you will need to start with just one.
So what will work for that one look like?
“Meaningful work” as defined by the Hult Prize can take many
forms. Two conditions of meaningful work are as follows
It must be paid and offer a minimum of

10 hours of employment per week
It must create positive social impact–“purpose.”
"Another way of looking at the . . . rise in

joblessness is that it represents a failure of
entrepreneurial imagination. Why haven’t
smart innovators figured out ways to make
money by employing the jobless?"
–Edward Glaeser, “Secular Joblessness”
DRAFT V1
2. A Crisis
Of YOuth EngAGemEnT
Over the past decade, more than a capabilities, and (importantly) privilege
million young people around the world to have participated in the Hult Prize,
have devoted their energy, insights, more than 50 others lack opportunity
and entrepreneurial commitment to and are fearful about the future.
finding solutions to some of the world’s See Figure 1.
greatest challenges. The growth of the
Hult Prize is evidence of the astonishing Globally, youth (defined as ages 15-35)
engagement of youth around the world are three times as likely as adults to be
in building a better future for themselves unemployed.1
and others.
One in five youth globally is neither
Nevertheless, while we at the Hult employed, engaged in formal
Prize rightly celebrate the outpouring of education, or involved in training.2
pragmatic empathy we have witnessed
as the Prize has grown, we also have What is worse is that, over the decade
had to face a difficult reality: For every since we founded the Hult Prize, the
one young person with the commitment, global prospects for youth employment
have gotten worse. The youth labor
force participation rate and the youth
employment-to-population ratio have
HOW YOUNG PEOPLE VIEW THEIR FUTURE both fallen in the past decade.
Figure 1: EMPLOYMENT PROSPECTS, 2017 See Figure 2.
At the same time, we have seen a

surge in economic migration among
our youth, and many are taking life-
threatening risks as they search for
greater opportunity. For example,
since 2010, the rate of migration from
sub-Saharan African to Europe has
doubled, with nearly a million people—
overwhelmingly youth—having made
the journey. During the same period,
populism has surged in Europe and the
United States, driven to a significant
extent by aging populations in rural
places and small cities that are fighting
Figure 2: back against the economic dominance
YOUNG PEOPLE'S IDEAL JOB, 2017
of large cities, which are siphoning off
a generation of young people who are
seeking opportunity.3
Lack of opportunity for the

younger generation, combined
with fear of change among the
older generation, has created
a volatile global mix.
1
International Labor Organization (2017).
2
World Economic Forum (2018).
3
Auerswald and Yun (2018).
DRAFT V1
WHAT YOU CAN CHANGE

WITH YOUR VENTURE
BARRIERS TO OBTAINING
MEANINGFUL WORK Why Are Millions of Youth
Even young people who have the skills
the market demands are often excluded
from meaningful work because they
Disconnected from
can’t access information about relevant
opportunities, or because they are
excluded by degree and credentialing
Meaningful Work?
requirements.
Lack of Skills
Youth with higher level skills that are
better matched to current and future WHAT YOU CAN’T (EASILY) the ability to deliver or those with the
workplace needs have greater access ability to pay? Youth know the answer
CHANGE BUT SHOULD
to meaningful work than those who lack to this question: Where productive work
such skills. UNDERSTAND is fairly rewarded, youth will direct their
Poor Public Policy energy toward building the new. Where
Lack of Mobility / Geographic
political advantage is rewarded, youth
Inequalities / Cost of Real Estate in Creating meaningful work for youth will direct their energy toward pleasing
Cities is a stated priority of almost every the old. And where neither is rewarded,
Geography and economics create government in the world—elected or youth will do whatever they can to get
significant barriers for youth seeking unelected, rich nation or poor nation, by.5
access to meaningful work, even global North or global South. However,
almost every government in the world Macro Disruptions
when they have the required
skills and credentials. Even in the also protects powerful incumbent firms; No one escapes war, macroeconomic
digital age, many jobs require an transfers net resources from the young collapse, or environmental devastation.
in-person presence, and jobs are to the old to support healthcare and
social security programs; and enforces Technological Disruption
disproportionately concentrated in
the world’s largest cities. These cities restrictive labors laws that favor existing The advance of technology over the
are also the world’s most expensive workers over new entrants. past four centuries has fundamentally
places to live, which makes it difficult In short, almost every government and irreversibly transformed the human
for a young person to start a life where in the world systematically disfavors experience.6 That process is not over.
the best jobs are. Commuting to jobs youth. The funding that does go to Youth in the current generation will have
in large cities is also costly and time “youth” is mostly directed to colleges to adapt to a rapidly changing world,
consuming. and universities, which—for reasons just as youth have had to do for a dozen
we elaborate on below—are not the generations. The difference today is that
Lack of Confidence
pathways of broad-based opportunity youth can expect to live easily twice
Finally—and tragically—many youth they are frequently said to be.4 The as long as their counterparts from just
are disconnected because they have reality then is that—notwithstanding a century ago. So, over your lifetimes
given up on finding meaningful work proclamations and election speeches you and your peers will need to adapt
even before they have really started. in country after country around the and evolve more effectively than any
Early experiences have taught them that world—the median net effect of generation before you. This is neither
privilege or connections—not hard work government public policy on providing good nor bad. It just is.
and determination—lead to a better access to meaningful work for youth is
future. These are difficult experiences negative.
to overcome. Youth also may doubt
their own abilities or doubt the extent Cronyism, Favoritism, and Corruption
to which any action they take will
4
Bessen (2015); Caplan (2017).
Who wins in any given country: The 5
Baumol (1991).
substantively alter their future life path. best or the best connected? Those with 6
Auerswald (2017).
DRAFT V1
When drafting this year’s challenge, we drew from

reports by international organizations that have dedicated
themselves to improving employment prospects for
the world’s youth for more than a decade. National
corporations and governments everywhere have also
placed the creation of economic opportunities for youth
at the top of their agendas.
3.
Help Is Not on the Way
• Governments in many places are run • Large corporations fully understand
So why is the situation by incumbent political and economic the imperative of serving youth as
elites, not by democratically elected customers but they have little incentive
getting worse? officials. With few exceptions, those to nurture youth as workers. Why train a
elites are not young people, and they young person who will likely walk away
are more interested in protecting their with the skills they have been provided
The reason is simple: positions of privilege than in opening at considerable cost? Corporate
The underlying incentive up new market spaces to create hiring managers likewise have little
systems around the world, opportunities for youth.7 incentive to hire unproven candidates
whether in governments, and give youth an opening in the
• Where governments are workforce. Again, there are significant
universities, or corporations, democratically elected, the political exceptions (for example, the German
do not favor youth. parties in power are inevitably beholden apprenticeship model), but large
to the interests of their largest financial corporations in general have not had
backers. Those financial backers are adequate incentives to create large-
not young people, and opening up new scale opportunities for youth—if they
market spaces for youth is not their had, they would be doing so already.
likely priority.
Good intentions have not proven
• Private universities are the same: sufficient to overcome misaligned
While ostensibly in business to serve incentives.
youth, they are functionally structured
to serve the interests of their largest Whatever proclamations and reports
donors and senior faculty. Those donors might say to the contrary, help is not
and faculty are not young people. on the way. Without greater creative
Vanity projects (stadiums, endowed engagement by you—today’s global
chairs, and the like) take precedence youth—the opportunities you seek will
over innovative investments aimed at not be found.
creating large-scale opportunities for
youth to engage in meaningful work.
7
Ul Haque (2017).
DRAFT V1
3.1. Conventional Solutions That Don’t Work #1
At the top of the list of conventional

solutions that don’t work is education.
More often than not, the search for
education translates into increasing More
degrees
numbers of students entering formal
higher education systems. In some
countries, particularly the United States,
this means incurring debt to access
future opportunity; in other countries it
means spending years in an often vain
quest to fill one of the limited number
of publicly supported openings at a
domestic university, or incurring the
enormous cost of studying abroad.
humans, ages zero to three years old,
An alternate vision of education would at 100 times current levels (which is 100
be to transform the primary school times next-to-nothing). But improving
system so that it can prepare children primary school education will not help
to enter the workplaces of the future. the millions of young people around
the world who are already despairing
Decades of reliance on the first and disconnected. Advocacy for one
solution—seeking a formal higher ed category of societal initiatives—however
degree that often is disconnected worthy—must not be an excuse for
from the experience of work—has not failing to address the most pressing
universally improved young people’s need of today’s youth: opportunities to
economic prospects. Instead, it has engage in meaningful work.
created a new and growing category
worldwide: unemployed degree Neither growing the higher education
holders.8 industry nor improving primary school
education are answers to today’s global
As for the second category, improving youth opportunity challenge.
primary school education is obviously a
good idea! We at the Hult Prize believe
that governments and corporations
around the world should commit
to investing in the intellectual and
emotional education of the youngest
8
In many cases, those who begin such
courses of study do not finish, thereby
incurring debt but never receiving the
economic rewards reserved for degree
holders. For more, see Caplan (2017).
DRAFT V1
Subsidized
Public
The solution to the challenge of Sector
“Jobs”
youth employment worldwide is not
government-subsidized checks of
any type. It is a massive, business-
led increase in opportunities to do
meaningful work.
Another approach that doesn’t work

is mistaking a government-subsidized
paycheck for a value-creating job. This
is what happens when government
creates subsidized work opportunities
for youth that are disconnected from
the real economy. All this creates
is the illusion of a solution. Sure,
the “beneficiaries” of such programs
temporarily receive paychecks, but
because they do not learn market-
relevant skills, they are not long-term
prospects for economic self-sufficiency.
Nothing has changed for them, except
now they are older and have lost
valuable time they should have been
using to develop their capacities.9
The same holds for Universal Basic

Income and other income-support
schemes. While often represented as
a visionary solution to the problem of
income inequality, these schemes really
represent an abdication of responsibility
for doing the hard work of building new
ventures that will provide meaningful
work to all members of society,
including youth.
9
Card et al. (2010).
DRAFT V1
Chasing the
American
(or European)
Dream
Even if rich countries were moving in ladders of opportunity in the United
the direction of more open borders— States and Europe.
which, sadly, most are not—migration
would still leave millions of youth The Hult Prize is well aware that, from
behind in the countries of their birth. a historical standpoint, the benefits of
The desperation Enthusiasm for one social good (in this

case, increased migratory freedom)
open borders and increased voluntary
migration are indisputable.10 But this
year’s Hult Prize Challenge—like all that
among today’s must not be an excuse for failing to

address the challenge of creating
meaningful work opportunities for youth
have come before—is about the future,
not the past. In the past, rich countries
grew economically and poor countries
youth in still-
in their countries of birth. stagnated. We are now well into the
second decade in which the opposite
Following the end of World War II, has been true: once-poor countries are
poor countries
millions of ambitious people in poor growing economically and rich countries
countries around the world shared a are stagnating. To move, for example,
singular dream: to begin a new life in from Ghana to the United States is to
continues to
the United States. Two of the three lead move toward an immediate chance at
authors of this case are the children of greater wealth, to be sure, but is it a
parents who came to the United States move in the direction of greater future
be great.
in that era, and our parents’ dreams opportunity? For today’s youth, that is
were fulfilled: They were able to raise not so clear.11
their families in America, and they
prospered.
The desperation among today’s youth

in still-poor countries continues to 10
Clemens (2010).
be great. The perceived gains from 11
Conversely, nativist actions undertaken
migration are so significant that millions by rich / aging countries are dangerously
self-destructive, and follow from a
of young people every year undertake
misunderstanding of both the sources of
long and perilous journeys in the hope prosperity in the long run and of the realities
of grabbing onto the bottom rung of of global demographics.
DRAFT V1
Building More
Accelerators
and Incubators
While the accelerators and incubators Hult Prize runs the largest impact-
that have popped up around the world centered accelerator globally at
may be adept at catalyzing the energy its castle north of London. Team
of some of the mostly highly skilled, members and mentors alike report that
best-connected young people in the participating in the accelerator is an
world, they alone are not the solution amazing experience. So we do believe
to the global challenge of providing that our own accelerator and many
meaningful work opportunities for others are contributing in substantive
today’s youth. ways to solving urgent societal
challenges.12
During the past decade, the Hult
Prize has been part of an explosion of However, we also know that our
initiatives around the world to support approach alone is not enough when it
entrepreneurs and entrepreneurship. comes to creating global opportunities
The boom in accelerator and incubator for meaningful work for today’s youth.
spaces is part of this explosion. The That is exactly why we are launching
this year’s challenge: no matter how
many incubators and accelerators we
build on existing models (including
ours), they will not answer the call of
"We will make it because this year’s Hult Prize Challenge.
we are young and we Why not? For one thing, accelerators

never, never give up" and incubators are overwhelmingly
located in cities, whereas many of the
world’s most disconnected youth live
in rural places. For another, they are
–Jack Ma primarily focused on a digital version
to a group of early Alibaba of “tech.” In general, accelerators and
employees, 1999 incubators today reach and serve those
who are already the most likely to find
meaningful, stable work. Of course they
can be useful if they seed companies
that address the youth challenge head-
on, but it’s companies that will make
the difference—companies like the ones
you will create, lead, and grow.
12
Qian, Mulas, and Lerner (2018).
DRAFT V1
4.
Your venture can be of any type, in any
FOR US, industry. As in previous years, you will

need to envision and launch a business
that can scale up—specifically, by
growing to have a large-scale positive
impact on society.
Unlike previous years, however, your

venture will also need to scale out to
provide meaningful work for 10,000
youth. Your impact will be greatest if
you have a plausible strategy to reach
disconnected youth—that is, those
currently not in the workforce, in formal
educational programs, or receiving
training.
To succeed in this challenge, you need

first to understand the barriers youth
face in connecting to meaningful work
and then, most importantly, to come
up with strategies to overcome those
barriers—thereby enabling youth to
create value for themselves and others.
In this section, we describe some
strategies for overcoming barriers that
include an array of potential businesses.
Here’s where you come in

Our approach in illustrating these
categories is briefly to tell the stories of
some of the great opportunity-creating
companies of the past half-century.
Addressing the global youth challenge But keep in mind that these examples
means starting anew. New ideas. New represent the best of the past 50 years,
business models. New technologies. while you are creating the future.
New mindsets. Furthermore, these stories–and the
categories they describe–are illustrative,
For the Hult Prize 2019, we’re not just not exhaustive. For you, the point is not
looking for companies. We’re looking to design companies that replicate the
for new ways to organize society that examples below. You instead should
will create large-scale opportunities for use these examples to spark new ideas
youth to engage in meaningful work. about how to embed the creation of
meaningful work in your respective
business models.
We invite you—indeed, encourage

you—to paint outside the lines and
come up with strategies that go beyond
the categories described hereafter.
Talk to your peers. Learn from others.

Use your imagination. Then make your
mark with a novel business model
Learning matching sourcing creating that has the potential to make a real
difference.
not education not subsidies not migration not incubating
DRAFT V1
4.1. Learning: Creating pathways to

meaningful work through improved skills
Companies in this category have built

learning into their business models,
and many have taken the extra steps
needed to bring neglected talent into
the workforce.
In the early 1960s, a young Swedish

man named Bertil Hult traveled to
England for the first time. As a dyslexic,
school had always been a challenge
for him, but he was surprised by how
effortlessly he picked up English in
England.
Bertil became convinced that traditional

classroom-based teaching was not
always the most effective. In 1965,
at the age of 24, he decided to start
a small company called Europeiska
Ferieskolan (European Holiday
School)—EF for short—that combined
language learning with travel abroad.
He called the program Språkresor, or
Language Travel, and it provided one their skills improved, they trained other runs a full-fledged post-graduate
of the world’s first hands-on learning women to meet the growing demand for training program to staff its global
experiences outside the classroom. Bareeze’s high fashion cotton clothing.14 hospitality empire. Starbucks does the
same, to great effect.
Experiential learning has been the
philosophy behind every EF program The key thing to Finally, a few new ventures have
for more than 50 years, and today it is a
cornerstone of modern education. This
understand about these created exceptional companies that find
talent in neglected populations:
simple but effective way to learn helped two stories is that they
EF become world’s largest learning Falafel Inc.
organization.13 illustrate opportunities for
(created in response to the 2017 Hult
EF helped to support job creation by
work-relevant learning, Prize Challenge by prize founder Ahmad
overcoming a significant barrier to not “education.” Ashkar) is actively seeking to employee
refugees in its expanding chain of
employment in the globalized world of
the past half-century: a lack of English- What is the difference? Students restaurants;
language ability. During its history, EF “receive” an education that is delivered
has directly impacted the lives of the and certified by others. But learning? Specialisterne
hundreds of thousands youth who That is what we do on our own or with (founded in Denmark by Thorkil Sonne
have participated in its programs, while others. For youth to develop the skills in 2004) creates jobs for autistic adults
also creating comparable numbers of required for the 21st-century workplace, in the IT industry;15
opportunities for meaningful work for they may not need more “education”
youth. but they will certainly need to learn.
Greyston Bakery
Pakistani entrepreneur Seema Aziz also An array of ventures is seeing this (founded in Yonkers, New York, by
built her business on a foundation of opportunity. In the past decade, Tetsugen Bernard Glassman in 1982)
training and learning, but in her case it companies like General Assembly and has taken the seemingly radical but
was her own employees who benefited. Galvanize have challenged traditional ultimately commonsense approach
When Aziz cofounded Bareeze, a learning models by offering practical of hiring anybody, regardless of their
clothing company, with her brother in short courses that focus on expanding background, and then giving the new
a basement market in Lahore, Pakistan professional options. While these hires the opportunity to demonstrate
was exporting no fashion brands, nor companies have focused on software their capabilities at work, on the job,
had it produced any successful woman and coding skills, the principle behind rather than on paper or in an interview.
entrepreneurs. Neither of these facts their success is a general one. Other
kept Aziz, then 28, from getting started companies have been forced to offer
on a path to break both of these training at scale in order to meet their 13
For more, see https://www.ef.com/sa/
precedents. Bareeze initially provided specialized needs. Marriott International about-us/our-history/. The Hult family is the
sponsor of the Hult Prize.
work for women in underdeveloped (founded by J. W. Marriott at the age of 14
Aziz (2012).
areas that they could do at home. As 27, nearly a century ago), for example, 15
Wareham and Sonne (2008).
DRAFT V1
4.2. Matching: Connecting

buyers and sellers on multi-
sided platforms
Companies in this category are

“multi-sided platforms”—eBay being
among the first—that bring together
a large number of buyers and sellers
in a marketplace of one-on-one
transactions.
These platforms, which typically

include mechanisms for tracking
reputations and resolving disputes,
have been applied widely by the
following companies, all founded by
youth:
Retail: Amazon Marketplace,

Alibaba, eBay 4.3. Sourcing: Building a
Transportation: Uber, Careem, Lyft
business on hidden talent
and productive capabilities
Job Matching: Rozee.pk,
Monster.com, Skillist, cut-e
Arts and Design: Etsy, 99 Designs,
YouNow
Companies in this category have used creating a pair of Internet-related
During a long weekend at the end of startups that failed, Ma (then 33
technology to overcome distance by
the summer of 1995, Pierre Omidyar years old) had a new idea: to create a
digitizing work, increasing the efficiency
decided to write a program to match platform that would allow customers
of supply chains, and identifying talent
buyers and sellers in online auctions. in the United States to buy directly
through competitions.
He called the site AuctionWeb. from Chinese companies. Alibaba
Then 28 years old, Omidyar saw was born. Over the next two decades,
Recent examples include Andela (co-
the site as a hobby. One of the first Alibaba helped power China’s return
founded by Christina Sass, Iyinoluwa
sales on the site was a broken laser to prominence in the global economy,
Aboyeji, Nadayar Enegesi, Ian
pointer that Omidyar listed at $1. To eventually becoming the world’s largest
Carnevale, Jeremy Johnson, and Brice
Omidyar’s astonishment, the item online marketplace.17
Nkengsa in 2013); and Jana (founded
sold for $14.83. Omidyar sent an
by Nathan Eagle).
email to the winning bidder to make
sure he understood that the laser
Ma Yun, universally known as “Jack
Like eBay, Alibaba linked
pointer was broken. In his response
the buyer explained, “I’m a collector
Ma,” was born in 1964 in Hangzhou, buyers and sellers on an
China, into a family of modest means.
of broken laser pointers.”
Scrawny but unafraid, Ma learned to online marketplace, but the
Omidyar realized he was on to
find opportunity where he could. When
President Richard Nixon visited China
motivation for Alibaba was
something. Within a few months the
site, now called eBay, had become a
in 1972, tourists suddenly descended different: Alibaba focused
on Ma’s hometown. Ma took advantage
phenomenon. By midsummer 1996,
of the situation by offering tours of his on surfacing productive
the site had brought in more than $7
million in revenue. Omidyar quit his
hometown in exchange for English
lessons.
capabilities that had
job to build his new company.
previously been hidden.
After high school, Ma wanted to go to
Beyond creating a place to find
college, but he twice failed the entrance In India, nearly two decades before the
obscure items like broken laser
exam. On a third try he made it, gaining founding of Alibaba, a group of seven
pointers, eBay created a way for
entry to the Hangzhou Teachers software engineers whose average
people with passions of any type
Institute. After graduating he set about age was 28 launched a company
to reach customers with similar
applying for any job he could get. He called Infosys. Capitalizing on India’s
passions. This has led to the creation
eventually found work teaching English massive but underutilized pool of
of meaningful work on a large
at a local university, earning $12 per technical talent, Infosys contributed to
scale. In the United States alone,
month. an economic transformation in India,
eBay hosts 6 million sellers. Small
just as Alibaba did later in China, by
businesses that are built around their
By the mid-1990s, after a visit to the surfacing previously hidden productive
presence on eBay employ 690,000
United States, Ma became fascinated capabilities.
people, and more than one-third of
by the Internet. Over time, however,
them say they are located in small
he was surprised at the under-
towns or rural areas.16
representation of Chinese brands on 16
eBay (2016).
this new and powerful medium. After 17
Clark and Stone (2017).
DRAFT V1
4.4. Creating
Companies in this category create meaningful

work by inspiring, educating, and supporting
entrepreneurs.
People everywhere are familiar with the
McDonald’s restaurant chain. Fewer
people know that the person who
built the McDonald’s empire was not
named “McDonald” at all; his name
was “Kroc”—Ray Kroc, to be specific.
And, until a movie was made about
the history of McDonald’s, even fewer
people knew that the Speedee Service
fast food system for which McDonald’s
became known was created by two
brothers who were, in fact, named
McDonald.
Kroc’s success rested on two fundamental skills:

The first was finding, inspiring, and training
franchise owners. The second was creating a
business model based largely on rental income
from franchised locations, which made his
franchising operation not just sustainable but
highly profitable.
So who was Ray Kroc, and why has
history recognized him as the de facto
founder of McDonald’s? Unlike most
of the founders we feature in this
“For Us, By Us” challenge document,
Kroc was not young when he founded
his company. He was a 52-year-old Richard and Maurice McDonald in the traditional [Pakistani retail textiles]
milkshake machine salesman when he San Bernardino, California, was a business model; we started the
first visited the original McDonald’s in restaurant. It was in the business of concept of franchising with our store in
1954. Seeing that restaurant produce selling hamburgers, French fries, and Rawalpindi. We quickly created another
hamburgers and serve customers at soda. In contrast, the McDonald’s store in Lahore and then Islamabad,
an unheard-of pace, Kroc immediately that Ray Kroc built into a global and by then we were on our way to
saw the potential of the highly empire is an entrepreneurship becoming the first textile chain in the
organized system the McDonald university combined with a property country.”
brothers had developed. It was unlike management company. Moreover, the
anything that existed at the time. fact that McDonald’s entrepreneurship Other highly successful companies
trainees—the franchisees—learn their have nurtured entrepreneurial
Kroc’s success rested on two skills and earn their revenue by selling capabilities and supported the
fundamental skills: The first was hamburgers is not the company’s development of entrepreneurs on a
finding, inspiring, and training franchise fundamental differentiator. The real large scale by providing financing.
owners. The second was creating a skill is in turning employees into Kickstarter, founded by Perry Chen
business model based largely on rental business owners and, for some, into at the age of 33 in 2009, has enabled
income from franchised locations, entrepreneurs. 133,000 projects to raise a total of $3.3
which made his franchising operation billion to date. Indiegogo, cofounded
not just sustainable but highly Seema Aziz, whose strategy we by Slava Rubin, Danae Ringelmann,
profitable. described above, also built her and Eric Schell in 2007 when the three
business by franchising. She explains: cofounders were all under 29 years
To break it down further, the original “With our third and fourth stores, we old, has allowed 800,000 creatives and
McDonald’s restaurant created by had completely broken away from entrepreneurs to raise $1.5 billion.
DRAFT V1
"If there’s anything

I’ve learned about
entrepreneurship, it’s that
entrepreneurs are not born.
They are almost exclusively
a product of the right
environment—one which
inspires, one which nurtures
imaginative interpretations
of the possibilities of 'what
could be'—and this current of
innovative ideas in most cases
must be injected into
a community."
–Arnest Sebbumba,
“Finding the Right Word for Entrepreneur in Luganda”
DRAFT V1
5.
The 1.2
Billion Faces
of “Youth”As you envision and build
your companies in response
to this year’s challenge, you
need to keep in mind the • For which young people is my
greatly varied experience of venture designed?
• Where do they live?
the 1.2 billion people who
• What are their capacities, needs,
comprise today‘s global youth and aspirations?
population. Ask yourself: • How do I know the answers to any

of the above questions?
Of the many economic, geographic,

and cultural dividing lines that separate
youth in the world today, we propose
that you consider two in particular as
your design and build your venture:
(1) the demographic environment of the

countries in which the youth live, and
(2) their access to, and level of, formal
education.
DRAFT V1
5.1. Demographics
A Tale of
Two Realities
In ascending market
countries, youth are
abundant but economically
excluded. In these countries,
a formal job is a an all-too- Youth are increasingly scarce in aging a share of the overall population. This
countries, but they face the challenge growth is due primarily to historically
rare luxury. of economic marginalization, due to high (though declining) birthrates.18
the lengthening of retirement and the Many of these countries are also
intensified use of technology. In short, experiencing relatively high levels
the 20th-century “job” is a vanishing of economic growth. The Hult Prize
necessity. refers to countries in this category
as “ascending market countries” or,
In the United States, Europe, and East simply, “ascending markets.”19
Asia, as well as in a growing number of
places around the globe, native-born The application of principles of
young people are a diminishing share of undergraduate economics might lead
the overall population. This recent but you to believe that youth in aging
growing phenomenon of youth scarcity nations (where they are becoming
is due to a combination of sustained increasingly scarce) are better off than
low birthrates and the overall aging youth in ascending markets (where they
of the population. The Hult Prize uses are becoming increasingly abundant).
the term “aging nations” to refer to The reasoning is that, with fewer young
countries in this category. people to compete for a given set of
jobs, young people in aging societies
In contrast, on the African continent have greater economic opportunities.
and a diminishing number of places
elsewhere, youth populations are However, as suggested by the names
growing rapidly, both in total and as we have given the countries in these
two categories, this simple reasoning
misses a number of critical factors that
lead to a more accurate conclusion:
Young people in both aging countries
and in ascending countries face the
challenge of disconnection from the
world of work, but for different reasons.
18
The demographic transition is a nearly
universally observed social phenomenon that is
characterized by a correlation between declining
birthrates and increasing wealth in nations.
19
Our definition of “ascending markets” is
data-based. An ascending market country is
one with above-replacement-rate fertility and
real GDP growth rate of greater than 2% (with
an adjustment for commodity price volatility).
The major ascending market countries, by
population, are India, Indonesia, Pakistan,
Nigeria, Bangladesh, Mexico, Ethiopia,
Philippines, Egypt, Congo (Democratic Republic
of the), and Burma.
DRAFT V1
5.1.1. Ascending Market Countries
Youth in ascending market

countries benefit from domestic
dynamism and rapid economic
growth.
On the African continent in particular, change is
occurring at a rapid pace. However, measured
national growth does not always reflect
increasing opportunities for work. In particular
in countries where economic growth has been
driven primarily by the extraction of natural
resources and loan-fueled spending on large
infrastructure projects, youth have generally
remained on the economic margins, even as
GDP has surged.
5.1.2. Aging Countries
In contrast, youth have been carried along by Youth in aging countries have a
economic growth to a much greater extent in
countries where growth has been driven more
different set of problems.
evenly by increasing volumes of exchange in
On the one hand, they generally can feel fortunate
consumer goods, manufacturing, and services.20
that they have been born into relative prosperity.
Additionally, in ascending market countries, a
great deal of economic activity is “informal”—
On the other hand, they live in places where
that is, it sits outside of government regulatory
economic growth is generally slow or (in cases
structures.21
of recession) negative. Furthermore, they face
significant competition in the workforce—largely
For millions of youth on the African continent,
from seniors who have chosen to stay in the
the net of effect of these factors has been a
workforce and from the automation/digitization of
constant struggle to gain a foothold in the
work.
workplace. The African Development Bank
reports that “two-thirds of non-student youth
[on the African continent] . . . are unemployed,
discouraged, or only vulnerably employed.”22 Figure 3: SHARE OF YOUTH IN FORMAL
Furthermore, “40% of people who join rebel AND INFORMAL EMPLOYMENT 2016
movements are motivated by lack of economic
opportunity” and “over 3,500 deaths [occurred]
among migrants [from ascending market
countries on the African continent to aging
countries in Europe] attempting to cross the
Mediterranean Sea in 2015 alone.”
20
This is bad for youth, because the employment opportunities that
exist are relatively less secure than in countries where most economic
activity is undertaken by companies that are formally registered with the
government; however, high levels of informal economic activity are also
good for youth, because it’s easier to get started in the workforce when
the average business is less constrained by labor laws that favor age and
experience.
21. African Development Bank et al. (2012), Baah-Boateng (2016).
22. The International Labor Organization defines an unemployed person
as “a person who has attained the minimum age of employment (e.g. 15
years), and in a reference week was ‘without work’, ‘available for work’
and ‘actively seeking work’” (ILO, 1982).
DRAFT V1
5.2. Levels of Formal Education
More Is Not
(Necessarily)
Better A chronic problem in
ascending economies is
that college graduates
struggle to find employment
opportunities that match their
level of education
For decades now, labor This argument was never as solid
as advertised (as very few studies
economists have argued— considered the large fraction of students
who start college but do not complete
and policy-makers have it) and is increasingly outdated. More transition time to a first job for degree
believed—that going to “education” is not necessarily better for
all, or even most, youth.
holders is one-half that of those who
have only a primary school education.
college is the pathway to Transition times are only part of the
The overwhelming majority of you who
a better future. are responding to this year’s Hult Prize story, however. A chronic problem in
Challenge have completed a college ascending economies is that college
degree. Many of you are in the process graduates struggle to find employment
of earning a master’s degree or even a opportunities that match their level
PhD. Globally, of course, you are in the of education. One survey of the
minority among young people. Fewer relationship between educational
than 40% of youth around the world attainment and work outcomes in 28
have completed upper-level secondary low- and middle-income countries
education; the vast majority of youth found that 15% of all young job holders
who are 18 and above have never were “overqualified” for the work they
attended college. were doing. The results also revealed
significant differences between
This distinction is important. In some countries.
ways, those who have gone to college—
in particular those who have earned In low-income countries with very few
a college degree—have significant college graduates, such as Bangladesh,
advantages over their peers in the Cambodia, Malawi, and Uganda,
job market. The International Labor research identified fewer than 5% of
Organization reports that, in middle- job holders as overqualified; in contrast,
income countries, the transition time to in middle-income countries with much
a first job for those who have completed larger proportions of college graduates,
a college degree is one-fourth that of more than one-fifth of young job
those who have only a primary school holders were overqualified for the work
education. In low-income countries, the they were doing.
DRAFT V1
getting
6.
to work
This is the most significant,
and the most demanding, Hult
happen, too, and the 50 companies
Prize Challenge yet. It is open that participate will see their businesses
ended but highly constrained. grow in astonishing ways during their
six weeks at the Hult castle north of
London.
One you get started you will realize the
enormous challenge of creating 10,000
But the goal of this year’s challenge
youth jobs. The reality is that your peers
goes well beyond these experiences.
will be searching for millions of such
The goal is to engage your energies and
opportunities over the next decade.
those of every single participant as part
of a global youth movement that will not
That is why your participation in this
take “no” for an answer, that will not
challenge is so important. This year
quit.
more than ever, the Hult Prize is not
about one team hugging each other
at the United Nations when they learn With this challenge, the Hult
they have been awarded $1 million to
build their company. That moment will
Prize team is no longer leading a
happen. The global accelerator will generation toward change.
This time,
it’s your turn.
DRAFT V1
AUTHORS
AHMAD ASHKAR
Chief Executive Officer and Founder
Hult Prize Foundation
PHILIP AUERSWALD
Chief Academic Officer
Hult Prize Foundation
ACKNOWLEDGMENTS
The Hult Prize Foundation has compiled research for this case from known and credible sources. The
authors have attempted to use accurate information as much as dynamic data can be accurately measured
and reported. The authors explicitly disclaim to the extent permitted by law responsibility for the accuracy,
content, or availability of information located throughout this case or for any damage incurred owing to use
of the information contained therein.
DRAFT V1
references
African Development Bank (AfDB), Organisation for Economic https://www.aeaweb.org/atypon.php?doi=10.1257/
Cooperation and Development (OECD), United Nations jep.25.3.83
Development Program (UNDP), et al. (2012). Promoting Youth
Employment: African Economic Outlook. Available at http:// https://www.ebaymainstreet.com/sites/default/files/ebay_
www.cpahq.org/cpahq/cpadocs/Promoting%20Youth%20 global-report_2016-4_0.pdf
Employment.pdf
International Labor Organization. (2012). “Resolution
Auerswald, Philip (2017). The Code Economy: A Forty- Concerning Statistics of the Economically Active Population,
Thousand-Year History. New York Oxford University Press. Employment, Unemployment and Underemployment,
Adopted by the Thirteenth International Conference of Labour
Auerswald, Philip, and Joon Yun, (2018). “As Population Statisticians,” Geneva: International Labor Organization.
Growth Slows, Populism Surges,” New York Times, May 22.
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Early-Stage Ventures: An Initial Look at Program Differences
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DRAFT V1

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What problem is the document trying to address?

What problem is the document trying to address?

What conventional solutions are discussed that don't work to address the problem?

What conventional solutions are discussed that don't work to address the problem?

The Global Youth Challenge

Solving Youth Unemployment

1. Definition: The Power of One 5

2. A Crisis of Youth Engagement 6

Why Are Millions of Youth Disconnected rom Meaningful Work?........................................7

3. Help Is Not on the Way 8

3.1. Conventional Solutions That Don’t Work #1:

3.2. Conventional Solutions That Don’t Work #2:

3.3. Conventional Solutions That Don’t Work #3:

3.4. Conventional Solutions That Don’t Work #4:

4.1. Learning: Creating pathways to meaningful work through improved skills.................14

4.2. Matching: Connecting buyers and sellers on multi-sided platforms...........................15

5. The 1.2 Billion Faces of “Youth” 18

5.1. Demographics: A Tale of Two Realities.......................................................................19

5.1.1. Ascending Market Countries....................................................................................20

5.1.2. Aging Countries........................................................................................................20

5.2. Levels of Formal Education: More Is Not (Necessarily) Better....................................21

Announcement Letter from the Founder

I founded the Hult Prize

We are asking you to do something no more complicated and no less daunting

The challenge for each team involved in the 10th-anniversary

“The worst thing that can

Millions and millions of

—President William Jefferson Clinton

THE POWER OF ONE

It must be paid and offer a minimum of

"Another way of looking at the . . . rise in

At the same time, we have seen a

Lack of opportunity for the

WHAT YOU CAN CHANGE

When drafting this year’s challenge, we drew from

3.1. Conventional Solutions That Don’t Work #1

At the top of the list of conventional

3.2. Conventional Solutions That Don’t Work #2

Another approach that doesn’t work

The same holds for Universal Basic

3.3. Conventional Solutions That Don’t Work #3

The desperation Enthusiasm for one social good (in this

among today’s must not be an excuse for failing to

The desperation among today’s youth

3.4. Conventional Solutions That Don’t Work #4

we are young and we Why not? For one thing, accelerators

FOR US, industry. As in previous years, you will

Unlike previous years, however, your

To succeed in this challenge, you need

Here’s where you come in

We invite you—indeed, encourage

Talk to your peers. Learn from others.

4.1. Learning: Creating pathways to

Companies in this category have built

In the early 1960s, a young Swedish

Bertil became convinced that traditional

4.2. Matching: Connecting

Companies in this category are

These platforms, which typically