They call them "the lost generation". We have new evidence today of just how much the 35,000 young people not in education, employment or training (Neets) are costing Scotland. Tot up lost earnings, lost productivity, crime and benefits, as a team at the London School of Economics has done, and you arrive at the staggering figure of £1.7bn a year. This is a disaster for the Scottish economy. At its most basic, it represents the equivalent of £340 a year for every person in Scotland. In a country concerned about a future in which one day retired people will outnumber the working population and one in which there are already thousands of unfilled jobs, it represents a massive lost opportunity.

Worse than that, it is a tragedy for the thousands of youngsters who, lacking skills and self-confidence, face a bleak future of long-term unemployment, poor health and early death. (Neets are three times more likely to have mental health problems and five times more likely to possess a criminal record.) We know quite a lot about them. Those who have been looked after by the local authority, young carers, the children of young parents and those whose parents have drug and alcohol problems are all over-represented.

The problem is most acute in Glasgow where one in five goes from school to the dole. Across the OECD, only Slovakia and France have more Neets. Trying to turn their lives around takes a lot of patience and costs a lot of money but, given where these young people are headed, the cost to society of failing to help them is potentially much higher.

The government's target of 80% of the working-age population in employment has a tendency to skew employment initiatives towards those most likely to get work, leaving those at the bottom of the social scale stranded there. There is a problem politically because the poorer and younger a person, the less likely they are to vote. Also, in a society that persists in blaming the poor for their own misfortunes, bold (and costly) schemes to help the poorest are not perceived as vote- winners. But in the interests of both social justice and long-term prosperity, more needs to be done about Neets.

There has been no shortage of debate on the issue in the past year, much of it involving Scotland's most prominent business leaders, but too often breast-beating on the issue is not followed up with meaningful offers of help. Sir Tom Hunter stands out as one prepared to put his money where his mouth is on this issue. And the Prince's Trust, which has helped 3500 young people to gain skills and find work, embodies what can be achieved by the voluntary sector but in general this issue is dogged by the failure to adopt a holistic approach. The result is too many piecemeal solutions, good projects hobbled by short-term or inadequate funding and too few resources spread too thinly to make a lasting impact.

There is nothing inevitable about this situation. Scotland has one of the most unequal societies in the developed world. In tackling the poverty and disadvantage passed from one generation to the next through young people without qualifications, ambition or hope, there is no reason why we should not aspire to a social cohesion other countries take for granted.