Machteld Ooijens, Director Truvalu
On 9 July 2026, Truvalu joined a youth employment dialogue in The Hague, organised by the Challenge Fund for Youth Employment (CFYE), the Dutch Ministry of Foreign Affairs, VSO, Randstad, Palladium and Vice Versa. Its title: When does investment become employment? Four assumptions were put on the table and challenged.
This is the first in a four-part series taking each of those assumptions deeper into what we’ve learned as a co-entrepreneurial impact investor working with SMEs in Bangladesh, Colombia and Kenya (meaning we work alongside the businesses we invest in through board participation, thematic coaching and business development support).
A note on what this series is and isn’t: I’m writing as one impact investor sharing what we’ve seen and where our thinking has changed, not as anyone with the last word. No one in The Hague had it fully worked out, and these posts are our contribution to an ongoing reflection across the ecosystem, offered in the hope of sharpening the conversation, and of being sharpened by it.
The first assumption was: training creates jobs. Finance enough skills programmes, the logic goes, and employment follows. The room largely agreed on the response: training for employment produces real results only when it comes with a structured route into a job, which means bringing employers in from the very start, building curricula together so they reflect what the market actually needs, and supporting the step into work through commercially viable mechanisms like internships and apprenticeships.
Supply without demand
This isn’t a new insight. Labour market assessments, sector skills councils and employer partnership models exist precisely because practitioners have long understood that training without demand produces little. The harder problem, from an SME impact investor’s perspective, is implementation, not awareness. Training programmes still often produce skilled young people without a corresponding demand to absorb them, not because designers don’t know better, but because building genuine, ongoing employer partnerships is slow, resource-intensive work that’s easy to underfund relative to training delivery itself. Capital deployed into businesses with real growth potential creates the demand that makes training worth doing; skills development works best when it follows the actual hiring pipeline of a growing business rather than trying to anticipate it from a distance.
The scale of the demand problem is worth stating plainly. In the economies we work in, most young people can’t afford to be unemployed, so instead of appearing jobless they end up in informal or underemployed work; around ~85% of Sub-Saharan employment is informal (ILO, 2025), nearly nine in ten workers in low- and lower-middle-income countries in 2026 (ILO, 2026). Unemployment (around 12.6% for youth globally in 2024, roughly 2.5 times the adult rate (ILO, 2025)) captures only the visible tip. The ILO’s NEET data (the share of young people not in employment, education or training) was 20% in 2026, with the rate for women much higher at 27.4% compared to 13.1% for men (ILO, 2026). The ILO’s own reading is that closing these gaps depends on skills and the structural conditions that let young people use them, not training in isolation. That matches what we see: better-trained young people stay out of decent work, just with more credentials.
Employers consistently cite the skills mismatch as a binding constraint on hiring, and demand-driven training genuinely moves the needle (the ILO notes skills training can raise a participant’s likelihood of finding work by around 14%; ILO Skills, citing IRPP 2021). The issue isn’t training versus no training. It’s whether training stays wired directly into employer demand throughout delivery, or drifts toward the assumption that skilled supply will eventually find a use.
Sevi, Kenya
What “skills mismatch” actually means
It’s worth being precise about what’s missing. Beyond confirming a candidate can technically do the job, employers want to know whether someone is motivated and able to take initiative rather than simply follow instructions. Communication, teamwork, problem-solving and the ability to “learn how to learn” come up again and again as the skills new entrants most often lack. Not because they weren’t taught a curriculum, but because that curriculum rarely built those muscles (ILO, 2013, drawing on UNESCO, 2012).
These are the same capabilities that make a workforce productive from the employer’s side. They feed the innovations, feedback loops and quality improvements that raise a firm’s margins, which is precisely why SMEs, even small ones, are willing to part-fund training when they can see it landing in their own operation. The employer’s interest isn’t charitable; it’s the business case, which is what keeps demand attached to training rather than floating free of it.
Several structural problems compound this. Many training systems remain heavily theory-focused, leaving graduates prepared for exams but not a workplace. Technical Vocational Education and Training (TVET) still carries a stigma as the “second-best” option, pushing status and investment away from exactly the pathway most likely to lead to a job. And many young people never get the practical experience (an internship, an apprenticeship, real project work) that would close the gap between what they learned and what a job requires. Employers, meanwhile, often carry an unconscious bias against inexperienced young people, treating it as pure risk. But that inexperience usually comes bundled with real advantages: young workers tend to be more adaptable, quicker to learn, more comfortable with new technologies and readier to bring fresh perspective, which is why a young hire is often a net gain to invest in, not just a cost to be de-risked.
There’s a mirror-image gap on the employer’s side that programmes routinely miss: the entrepreneur and their line managers often don’t know how to work with young people once they’re hired. Taking on an inexperienced young worker demands more of a manager (more onboarding, more mentoring, more patience with early mistakes) and where that capability is absent, the bias against young hires becomes self-fulfilling: the hire “fails” because no one was equipped to bring them on. So the training question runs both ways. Alongside skilling young people, there’s real value in supporting owners and managers: through business development support, mentoring, and practical measures like assigning an experienced “focal point” to accompany newcomers. It’s a less visible investment than a curriculum, and often the one that determines whether the curriculum pays off at all.
Skills have worth beyond the paycheck
One nuance is worth pausing on. UNESCO’s framework for education rests on four pillars: learning to know, to do, to be, and to live together. The third, learning to be, is explicitly about personal development for its own sake: self-awareness, self-agency, creativity, moral values and emotional intelligence that enrich a life independent of whether they ever translate into a payslip. UNESCO is clear this has intrinsic, not merely instrumental, value.
That’s an important qualification before we conclude training is only useful when it leads to jobs. In practice, self-agency, critical thinking and the ability to reflect on one’s own actions are exactly the qualities that make someone more adaptable, more coachable, and more likely to grow into a role than stall in it. Investing in these foundations is worthwhile on its own terms, and happens to be some of the best workplace preparation there is.
FarmWorks, Kenya
What actually closes the gap, and what it doesn’t
Interventions that work share a common thread: they’re built around a real business need, not a generic syllabus. Curricula co-designed with employers (where companies have a genuine voice in content, not just a seat on an advisory board) outperform training designed in isolation. Internships, apprenticeships and project-based work give practical experience the classroom cannot substitute for; the payoff shows on the employer side too, with the overwhelming majority reporting apprentices come out with more relevant skills than other routes produce (ILO Skills, citing UK NAS 2018: The Apprenticeship Guide). And co-investment models, where an employer helps design and part-fund training for a role it’s committed to filling, are associated with better placement and retention (INCLUDE Platform and CFYE, 2022–2025).
Format matters as much as content. Training works best when it solves an immediate operational problem (how to use a specific piece of software, price a batch of product, manage a client) rather than following a curriculum delivered regardless of whether the learner has anywhere to apply it.
The same logic extends to entrepreneurship. Many young people in our markets won’t be hired but will create their own work, and the evidence on generic entrepreneurship training is sobering. Stand-alone business-skills courses show mixed results, and women tend to benefit least; multi-faceted programmes bundling training with finance and mentoring do considerably better (UNICEF, 2019).
But whether a business hires also depends on cash flow, labour law and severance risk, and plain uncertainty about next quarter’s demand. None of which a better curriculum fixes. Everything above also assumes a growing business nearby, close enough for a young person to realistically apprentice with. That holds in the SME markets we invest in, but not everywhere. In very thin local labour markets, in fragile or conflict-affected settings, or simply where there aren’t enough growing businesses, better design won’t close the gap, because there’s no demand to wire it into. The more honest answer is a different set of interventions, bringing work closer to where people live, building basic infrastructure and security first, or accepting that self-employment and informal livelihoods may be the realistic near-term outcome. We don’t have a tidy answer for that harder case, and we’d be cautious of anyone who claims they do.
What this looks like without a training department
Scale matters too. Building a dedicated training institute takes management time, HR capacity and money a small business doesn’t have, and most businesses creating jobs in our markets are exactly that size.
In our portfolio, the answer often isn’t a formal programme. Classical Handmade Products (CHP), a Bangladeshi producer of rugs, baskets and home accessories woven from jute, seagrass and recycled garment waste, employs several thousand people (mostly women) in rural northern Bangladesh, transmitting traditional weaving skills within the community and combining them with short quality sessions on the production floor tied to what a batch needs that week, plus training on health, safety and environmental practices. Cocina Soluciones, behind Bogotá’s Mistral bakeries, shows the same pattern: its roughly 90 staff, most young and two-thirds women, are trained largely through chefs mentoring alongside them, paired with short sessions on quality and food safety. Others in our portfolio, from Sevi in Kenya to the GrowPact Academy for young farmers, follow the same logic through internal learning systems and field-based peer mentorship. Neither CHP nor Cocina Soluciones needed an institute. Just a deliberate decision to tie skill-building to the immediate needs of the operation.
The takeaway
Training is not a job strategy on its own, and treating it as one is how well-intentioned programmes produce credentialed young people with nowhere to use what they learned. Most in this field know that. What’s harder is building training around a specific, real demand (an employer who’ll do the hiring, or a founder’s own tested venture) delivered through short modules and sustained coaching rather than one-off courses, backed by real practical experience, and matched by the employer’s own capability to manage and retain the young people they take on. And not every skill needs an employer’s business case to justify it. Some are worth building simply because they help a young person become who they’re capable of becoming.
None of this is a settled formula. We just aim to share observations from a decade of impact investing. If it sharpens how someone else thinks about wiring training to real demand, or shows us where we’ve got it wrong, it’s done its job.
In the next post, we’ll look at the second assumption from The Hague: that inclusive employment models can simply be scaled up. The honest answer is more complicated, and more interesting, than that.