This paper calls for an investment-based vision of a modern Europe in which both seniors and youngsters contribute to growth and social cohesion [2]. The Commission Communication to the Spring Council on the Lisbon Strategy in 2005 stated that ‘The future of Europe and the future of the Lisbon Strategy are closely linked to young people. The Union and the Member States must ensure that the reforms proposed help to give them a first chance in life and equip them with skills needed throughout their lives’ [3].

To succeed in tomorrow’s world, the European youth of today must above all develop their human capital and be supported in consequence. This involves a complex multi-faceted and multi-staged investment strategy. As far as human capital is concerned, investing in youth is complex since it requires by its very nature a combined effort of the youth themselves, their parents, schools, non-governmental organisations, and various layers of government. This means that apart from the complexities of the issue itself, there is always a serious coordination problem to be solved. In addition there is a timing issue. For all aspects of human capital formation, early investments are crucial. Not only is it more efficient to prevent ‘problems’ than to solve them afterwards, it is also the case that, in the words of Nobel Prize Laureate J. Heckman, ‘early success breeds later success, just as early failure breeds later failure’ [9]. This applies to cognitive skills, social skills, health and culture, and is even transferable to next generations. This view does not rule out later investment that provides people with a second chance.

Five interrelated and cross-cutting policy fields should have the highest priority on an agenda for investing in Youth : Child Well-being, Health, Education, Employment and Civic Participation of young people. These issues are strongly connected (see above). In many ways, European welfare states and other institutions are well equipped to tackle the challenges. But there is no room for complacency. Youth investment is an opportunity, and one that needs priority. The ‘malaise’ of youth squeezed between increasing demands for performance, knowledge and adaptability and the crumbling of old types of securities is universal [11].

One of the crucial findings in contemporary research is that it is ‘very early child investments that matter most’. So any policy aiming at preparing a healthy future should first and foremost make sure that individuals have a ‘strong start’ from birth [12]. To give all children the best chances to develop the variety of their skills, we need to give each child the widest opportunities to develop into a confident and responsible young girl or boy and a productive adult. Investing in all children is also necessary because the future labour force will be shrinking and needs to confront the issue of increasingly large dependent groups.

The last three decades have seen a pervasive increase of child poverty rates. The poverty indicators are everywhere higher for children than those of the entire population. There are about 94 million children and young people below 18 living in the EU. Around 20 million of them (19%) have known an above average risk of income poverty compared to adults [13]. Some situations bring particular risks : children living in single parent families and large families ; children in non-working households or with parents working in insecure, temporary and low paid employment. Migrant children and ethnic minorities are often in a precarious situation [14]. Remedial policies to these worrying and counterproductive trends involve a number of initiatives ranging from different types of income transfers (cash and/or tax benefits, children’s ‘endowment’, etc.), to labour market measures aiming at improving the family income (by encouraging parental employment, and particularly quality employment and equal opportunities for mothers) to universal measures for the child itself, i.e. access to early childhood education and care.

Needless to insist on the fact that child poverty must be at the top of the agenda because of the long-lasting effects it embeds and the interactions this issue has with other challenges (health, education). Three complementary problems need to be addressed within an investment strategy in child well-being : (i) Measures directed towards the development of the child with a specific emphasis on the significance of early years for children’s future development : Early childhood education and care ; (ii) Measures aiming at improving the well-being of parents with a special focus on the quality of maternal employment ; (iii) The provision of money through various types of income transfers and asset endowment should be carefully assessed. Finally, experience proves that improving the well-being of children requires regular and visible monitoring.

A high level of health is essential for young people’s well-being, growth and development. Healthier young people make healthier adults. Many problems causing ill health and premature retirement in adults have their origin in the approach to life and lifestyle shaped during youth. In their youth people begin smoking, consuming alcohol and drugs, engaging in sex and having more control over their diet and physical activity. Behaviours that persist affect their future health. The demographic trends causing a decline in the working age population mean that it is particularly important to maximise the human capital which we have. Measures to improve health in young people can contribute by establishing healthier patterns of behaviour resulting in lower levels of illness and an increase in the number of years of healthy working life available. And from a cost effectiveness point of view prevention is again better than cure. In addition, education for young children on maintaining a healthy lifestyle may help to change the family lifestyle.

There are worrying trends regarding health in the fields of obesity, mental health and alcohol usage. One child in five is overweight or obese in Europe. The number is increasing by 400,000 every year [18]. And there is a risk that the steep rise in obesity over the past two decades will mean higher costs in the future. Obesity costs around €59 billion a year for the EU Member States in direct healthcare costs, but the overall economic impact could be much higher. In the WHO European Region, the costs of mental health problems are estimated to be 3–4% of GDP [19]. Mental health problems are responsible for nearly 20% of the health costs. Mental health problems in children and adolescents are diagnosed increasingly often. Suicide remains problematic. Amongst 10 to 18–year-olds suicide accounts for 10% of deaths in boys and 7% in girls. The cost of alcohol to EU society in 2003 was estimated to be equivalent to 1.3% of GDP [20]. In most EU Member States there has been a significant increase in binge drinking and drunkenness amongst young people over the last ten years. In 2003 an estimated 13% of all EU 15-16–year-olds had been drunk more than 20 times in their life.

A combination of actions is required : regulation, public awareness, improvements in the delivery of health and education services, and investments in imaginative initiatives. Such a coordinated approach can be achieved through fruitful partnership of stakeholders. Local governments and Member States hold most of the competence in these areas. They are encouraged to take action provided that such actions are supported and coordinated as appropriate by the EU.

Education is a centre-piece for a social investment strategy. Early-childhood education and care and primary education play a key role in providing social and cognitive skills that help offset an adverse socio-economic background (see the above section on ‘Child well being’). Later, the curriculum of compulsory school is also crucial considering the dramatic increase in demands for skills in a knowledge society. Skill demand entails that key competences are acquired (in social skills, languages, IT, science, cultureÂ…). Most of these skills are easier to acquire at an early age. Secondary schools need to confirm the acquisition of those key competences as well as to prepare an increasing number of pupils for the tertiary level. Higher education has to train an increasing number of students to answer the needs for innovation, growth and well-being in the European economy including in engineering, life sciences and medical professions.

While each educational stage requires, for the benefit of all, appropriate resources and a capacity to adapt to a changing environment, educational institutions at all stages are increasingly facing a dilemma to conciliate equity and efficiency : to offer the best opportunities to all and develop excellence in a context of increasing diversity. The demands of the information society, inflation of qualifications on the labour market and increased emphasis on performance and competitiveness tends to dramatically amplify problems such as truancy, fatigue, learning difficulties and, as a consequence, school failure. So, in addition to a blatant need to enhance the teaching of languages at all levels in an enlarging EU, a specific case needs to be made in education for fostering higher education on the one hand and fighting ‘failures at school’ on the other hand.

The main priorities in the field of education are (i) to increase and improve the effectiveness of investments in education ; (ii) to reduce the number of early school leavers and low achievers ; (iii) to implement structural reforms in higher education and to increase participation in mathematics, science, technology and engineering studies.

We need to invest in youth in favouring more rapid and more secure entry in the labour market. A failure in this area is a huge waste of human resources and may have also a series of negative impacts on future jobs for young people, on family composition and parenthood. Prolonged transitions, due to youth unemployment, job instability and the difficulty of entering the housing market, have negative consequences for delaying the age of first childbirths, with possible impacts on demographic trends. Furthermore, a low performance can have strong side effects on the investment in education, in decreasing returns of education. New trends in labour markets imply as well that transition periods from school to work are less and less standard and become more complex. Young people need to be prepared and equipped for these transitions as for the later transitions in their lives. And the labour market needs to be adapted for their entry. One part of the answer is to adapt education systems to better respond to the needs of the economy and to reduce the number of early school leavers (see previous section) ; the other is more related to labour market functioning and employment policies.

The employment rate for young people (15-24) is low and is not significantly improving, while the general level of attainments has dramatically increased and active labour policies have mainly focused on young people [29]. In most Member States, the relative participation in the labour market has been declining. It is partly due to an increase in the number of students. But it hides also worrying trends : even if the phenomenon is difficult to measure, the so-called NEETs (Not currently engaged in Employment, Education or Training) population is increasing. Worrying too is the high level of unemployment : nearly 5 million young people are unemployed among a total of 20 million unemployed in Europe. They are more at risk of unemployment when they are unskilled, but a degree is no longer a guarantee to getting a good job. Despite better performance in education for girls, the gender gap still remains significant : it is around 2 points for the EU on average and reaches 9 points in some Member States. Many countries have undertaken reforms of the labour market but with putting too much stress on contracts designed for youth. Those partial reforms have reinforced dualism of the labour market and have favoured insiders against outsiders. In fact, most young people are hired on a temporary basis, with fewer elements to secure their trajectories in terms of unemployment benefits, training, etc. And these jobs are too rarely stepping stones towards better jobs and do not help enough to build human capital. In some Member States, the youngsters work for too short a period to be entitled to any unemployment benefits.

To facilitate the integration of young people in the labour market, the general economic and social context is of paramount importance. The question of securing their trajectories along with having a general flexibly of employment is a cornerstone to facilitate entry into the labour market. However, young people should not shoulder alone the needs for flexibility. The reduction of youth unemployment entails a good return on investments in education. Thus, a good functioning of the labour market is a priority. Beyond general recommendations related to labour markets and education systems fitting with economic needs, it is worth spreading across Europe good examples to show that there is a way out of chronic youth unemployment. Three types of instruments have been proven fruitful : apprenticeship has helped to tighten the links between education and employment, immediate activation ; and instruments for a more secure entry into the labour market.

A strong civic competence and a sense of belonging are critical for the development of a democratic society and a guarantee for societal cohesion, political stability and economic progress. When acquired at an early age, they create the groundwork for the development of an active approach to politics in youth and adulthood and they are passed on to the next generation under the influence of family, school, the media, peers and religious institutions. As experienced by the World Bank worldwide, ‘young people’s disposition towards citizenship tends to be durable and participating early in life is a good predictor of ability and willingness to engage in the future’.

In later youth, turning 18 has a symbolic value for being the time when the right to vote in elections is granted. It should not, however, overshadow the continuous active process of identity formation in which girls and boys are engaged from their teenaged years. This period when people begin to establish their identities as individuals, outside their families, is often a turning point. The sense of belonging and involvement in the community which will be experienced by individuals in later life is deeply influenced by the social and political responses of the community and/or public authorities to teenagers. Investing in enabling youngsters to recognise themselves as citizens is highly necessary. An active knowledge of their rights and duties, an ability to filter and assess the mass of information they receive from an always wider range of sources and providing them with real opportunities to exercise their citizenship are the main components of an enabling framework. These tasks were traditionally left to schools in stable and tight communities. In the age of television and internet and with increasingly changing political and social environments (with regards more particularly to the situation of migrants), the school system alone cannot fulfil these needs.

Four actions could be given priority for initiatives to be conducted throughout the EU to encourage the civic participation of young Europeans : (i) Promoting education and training to active citizenship from an early age throughout the EU ; (ii) Integrating young girls and boys (including young migrants) into formal politics and opening new avenues for their participation ; (iii) Developing EU youth citizenship ‘as a journey’ ; (iv) Encouraging cultural learning and multilinguism.

Youth has often featured on the EU agenda in the last few years. An EU consensus exists on the need to take action to help young people with education, employment and civic participation. Commendable efforts have been made [45] which have to be built upon but an across-the-board policy vision and investment strategy in youth is needed to fully develop the potential contribution of young people to growth, jobs, and the future of Europe. The present vulnerabilities of children, girls and boys, often result from insufficient and bad quality investment in their development and their future. A major reorientation of policies is thus needed if significant progress is to be made. Hence the need to create a new political momentum to stress the importance of the issue and further enhance the coherence between Community and Member States’ actions. What is suggested here is not a new policy (or set of policies) for youth but a shift of policies and resources to account for the importance of building up a healthy, adaptable, confident and knowledgeable youth.

In many areas, the prime competence and responsibility lies with Member States or local governments. An EU action nevertheless can help Member States, regional and local authorities by the use of its existing resources and competences and increased coordination and impulsion mechanisms. Flagging the issue at EU level is, in itself, a catalyst to promoting partnerships of Member States, other political and institutional levels and private stakeholders and raise the awareness of those most directly concerned, young boys and girls themselves and their parents, about what the EU can do for youth.

What is needed above all is a strong call to public authorities, the private sector and communities but also young people themselves and their parents for ‘more and better investment in youth’. The EU can certainly contribute to ‘the better’ through the mobilisation efforts mentioned above ; it can also supplement ‘the more’ through community programmes and structural funds which can bring increased sources of investment to Member States. The Structural Funds Guidelines mention youth in numerous strategic places. Regarding Member States’ take-up of this priority in their programming exercises, the upcoming review exercise could provide an opportunity to call for a reorientation of investments towards the ‘investing in youth’ priority.