Innovation for Job Creation: The Role of Innovative Financing to Address Youth Unemployment in the MENA Region

Abstract

This paper explores the use of innovative financing to combat high youth unemployment in the MENA region. By doing so, it paints a clearer picture of innovative financing's connection to financial inclusion and entrepreneurship, its potential impact on youth employment, as well as what needs to be done for these possibilities to be realized. To answer the questions at hand, I evaluate the literature on youth unemployment in MENA and innovative financing. The paper finds that innovative finance mechanisms are under-utilized in MENA, but that the conditions exist for it to be viable. Its use can provide improved access to finance for youth, which is a key entry point for improving entrepreneurship linked to increased youth employment. Still, further studies are needed to assess innovative finance's impact on positive employment outcomes for youth. The value of this paper is its contribution to the relatively new arena of innovative finance’s application to youth unemployment. If countries are to increasingly rely on new forms of financing to achieve SDG 8—to substantially reduce the proportion of youth not in employment, education or training by 2020—this is an important link that needs to be better understood.