The World Bank Group President, Ajay Banga, has warned that the world could face a major jobs crisis if governments fail to respond to rapidly changing demographic and economic pressures.

Outlining his concerns in an opinion piece, on ‘How to create jobs for the world’s 1.2 billion new workers‘, Banga said while global attention often focuses on wars and market shocks, long-term forces such as population growth, technology shifts and resource pressures are quietly reshaping labour markets, with nearly 1.2 billion young people expected to enter the workforce in developing countries over the next decade.

He said over the next 10 to 15 years, 1.2 billion young people in developing countries will come of working age — a scale the world has never seen.

On current trajectories, he said, the economies are expected to generate only about 400 million jobs over that same period, leaving a staggering gap.

He noted that it was often framed as a development challenge, but now it is not only an economic challenge but is increasingly a national security challenge.

According to him, “If we invest early in people and connect them to productive work, this vast new generation can build lives of dignity and become a foundation for growth and stability. If we do not, the consequences are predictable: pressure on institutions, irregular migration, conflict, and rising insecurity as young people reach for any path available to them.”

However, Banga said the World Bank Group is pursuing the first path with urgency, bringing together public finance, knowledge, private capital and risk management tools around a job’s strategy built on three pillars.

First, the World Bank chief said it was creating infrastructure, both human and physical.

He said that without reliable power, transportation, education and healthcare, private investment and jobs never materialise. He noted that while the role of physical infrastructure was well understood, investment in people was equally critical.

Secondly, Banga said that in creating a business-friendly environment, there must be clear rules and predictable regulations to reduce uncertainty and improve the ease of doing business.

According to him, jobs are generated when entrepreneurs and firms have the confidence to invest and expand.

Noting that even though public resources could help unlock the process, job creation at scale depends on the private sector, especially micro, small, and medium-sized enterprises that generate most employment.

“This leads to the third pillar: helping businesses scale. Through our private sector arms, we provide equity, financing, guarantees, and political risk insurance.

“We focus where job potential is greatest, across the five sectors that consistently generate employment at scale: infrastructure and energy, agribusiness, primary healthcare, tourism, and value-added manufacturing,” he said.

He noted that by 2050, more than 85 per cent of the world’s population will live in developing countries.

That, he said, represents not only the largest expansion of the global labour force in history, but the largest growth in future consumers, producers and markets.

The bank chief stressed that developing countries benefit because jobs create income, stability and dignity.

“They strengthen domestic demand and give young people a reason to invest in their future at home rather than look elsewhere. Developed countries gain as well. As developing economies grow, they become stronger trading partners, more resilient supply-chain anchors, and more stable neighbours.

“Growth in those markets expands global demand and reduces the pressures that drive irregular migration and insecurity—outcomes that carry real economic and political costs far beyond borders.

“The constraint has never been a lack of opportunity. It has been a risk, both real and perceived. That is where development institutions can play a catalysing role: financing infrastructure, supporting regulatory reform and reducing risk,” he said.

If nations get it right, he said, the low-frequency forces shaping the world—in this case demographics—become engines of growth and stability rather than sources of volatility and risk.

“If we get it wrong, we will continue to chase crises—reacting to outcomes that were visible years, even decades, in advance.

“The choice is not whether these forces will shape the future. They will. The choice is whether we act early and bend them toward opportunity — or wait until they arrive as instability,” he added.