With youth unemployment remaining at near record levels many university students graduating in the coming months will face a slew of challenges unique to their generation.

The latest unemployment figures from the Office for National Statistics (ONS) show that under-25s are hardest hit by Britain's depressed job market. The number of people aged between 16 and 24 who were out of work hit 963,000 in the three months to February. This pushed Britain's youth unemployment rate up by 0.1 per cent to 20.4 per cent.

The problem is compounded as those collecting degrees are also competing with recent graduates from 2008, 2009 and 2010 who still lack steady work.

Choosing the right career

After three years of being told to follow their dreams and passions at university; today's graduates will find that their early years in the job market, are "the most important for signalling" one's career potential to employers, according to Lisa Kahn, an economist at Yale University.

"All you've got is college first, so there's a lot of room for employers to form impressions. After a few years and a few jobs, those impressions solidify and it's harder to change them," she told the National Journal.

With jobs so scarce, many graduates are forced to take low-level, low-prospect jobs that can create an "impression of underachievement that may be hard to shed".

There is a danger that taking on too many low-status jobs in a short time-frame after graduation can become cyclical. Don Peck, writing in the National Journal earlier this year, listed the challenges facing graduates in today's job market and warned them to get serious about a career sooner rather than later. "The window for getting onto a good track, arguably, is narrower than it used to be," he said.

The longer that graduates spend exploring different career paths in their 20s, the harder it becomes to change career five or ten years down the line, he said.

"Earnings tend to grow much more [quickly] early in one's career than later," noted Princeton University economist Henry Farber.

One prominent study shows that, adjusting for inflation, about two-thirds of all lifetime income growth occurs in the first 10 years of a career, when people can switch jobs easily, building up their earnings.

People who can't immediately step onto a desirable career curve due to a bad economy have a much harder time doing so later, when mortgages and marriages have made them less mobile, and when many employers will frown upon a disappointing C.V.

Even an eventual return to boom times won't change that, Farber explains. "If you happen to have the bad draw early on and the good draw later, it's going to be hard to fully recover."

David Brooks, writing in the New York Times, went even further arguing that it is indicative of this 'perversely structured' generation that pursuing one's dreams should be so greatly sought after.

"College grads are often sent out into the world amid rapturous talk of limitless possibilities," Brooks wrote. "But this talk is of no help to the central business of adulthood, finding serious things to tie yourself down to."

Brooks also cautioned against what he called the "misleading mantra" of "expressive individualism" that encourages graduates to "find their passion and then pursue their dreams."

But as Lane Wallace argued in a recent piece in The Atlantic, "passion...is often misunderstood or confused with other motivations."

Many people view dreams and passion exactly as David Brooks outlined, as liberally idealistic, irresponsible and selfish. In other words, the exact opposite of the individual's obligation to society, and far removed from the parameters by which we tend to judge security and success.

Fresh start

All this negative talk paints a wholly discouraging portrait of adult life, one that few students and recent graduates will be keen to enter into. But this dour scenario posited by older commentators doesn't paint a true picture of life outside the confines of unviersity.

The very fact that young graduates are mobile and relatively free of commitment means that they are free to move to where the jobs are, to follow a passion -- their passion -- wherever the market takes them.

Even in this economy, a stable, low-level job in an ordinary company may not be as good a long-term bet as a stretch role at a start-up, or a yearlong contract with a well-regarded company. Early on, signals matter more than stability, said Peck.

While there is no El Dorado at the end of the unemployment line, choosing a city to live in could be the most important decision graduates make in terms of long-term employability.

According to recent research by CEO for Cities, graduates are increasingly choosing to settle in close-in neighbourhoods (defined as within 1-3 miles of the CBD) of major metropolitan areas.

Cities are just like businesses, they need the dynamic individuals, the early-adopters to drive innovation and create an attractive place to live.

But when it comes to choosing a city to settle in, which urban areas are attracting the talent?

The cities with the strongest hold on people have long been those with a strong aesthetic dimension. It is these cities that can attract university graduates because of their livability that will, in turn, encourage start-ups and attract the larger companies that invest in them.

For many, the ideal of a livable city - that place you wish your own town would become - is not some plan shining on an urban designer's computer screen. It actually exists.

In his book 'Cities for People', the architect Jan Gehl identifies spending time in public places as one of the clearest indicators of a livable city.

As Gehl says, "There is not a single example of a city that rebuilt its public places with quality that has not seen a renaissance".

In Europe, the examples of Barcelona and Lyon provide the best examples. By redesigning walkable neighbourhoods with easy access to art, culture and entertainment these urban centres have created a way of life that appeals to the next generation.

As Richard Florida points out, what matters now is quality of place - what's there; who's there; and what's going on. Rather than attracting large companies and creating jobs, the key factor for cities is to attract the quality of employee that forward-thinking companies demand. Often, the talent itself will create new companies and new innovations that will lay the foundation for new global cities.

People's strengths are magnified in cities because ideas spread more easily in dense environments. Companies that are located near the geographic centre of their industry are more productive (Silicon Valley, Hollywood, etc) and both wages and skills grow faster. These cities thrive because they are host to quality ideas, not because they build new conference centres.

The intelligent cities of tomorrow won't be planned oases in the desert, or smart-suburbs tacked onto existing urban centres; they will be our existing towns. To promote the idea of sustainable cities we need to look towards the examples currently being expounded, of older urban areas that are re-imagining the idea of what it means to be a city in the 21st century.