Pathways for Sustainable Jobs and Enterprises
Posted on October 5, 2014 by Terrence Isert
What is needed to predict where and how youth will succeed in either a new job or enterprise?
How are markets and market opportunities identified? Do youth weigh the risks of each or use different criteria to make their decisions? Some recent research sheds some light on the importance of understanding the factors that can influence youth and ultimately impact their entrepreneurship choices. Factors include both external and internal considerations. Youth need social supports, accessible markets, and useful programs from institutions (schools, training, etc.). Some of the most important internal factors for youth highlight their needs, attitudes, personality traits and preferences. All of these factors form part of larger framework for youth to succeed in any job or enterprise they choose.
Cognitive and non-cognitive abilities are internal factors that play important roles in predicting youth success. Cognitive abilities or intelligence have been studied more frequently. They relate well to achievement levels in school, future wage earning, and a range of social behaviors. One study (Journal of Labor Economics, 2006) illustrated the significance of non-cognitive abilities and their impact on youth decision-making. Non-cognitive abilities such as personal preference and personality traits on economic and social behavior have been studied less. These abilities also have an important influence school, future earnings and employment. Traits such as charm, persistence, motivation for example are undeniably important factors that influence future success in attaining work or creating a business.
What could be considered by some to be out of youth’s sphere of control are conditions equally necessary for success at job and enterprise creation. An effective way to classify these is with the Capability Framework (Sen 1992, 1999) which identifies three categories: institutional, social and material conditions. Government policies for example create (institutional) support for new employment opportunities. Communities valuing youth savings groups and earning potential are just two examples of shifting social support to youth. Various life and skills training programs highlight how schools (institutional) can partner with communities (social) to provide new opportunities for youth. Families and households can also be a rich source of (material) resources, even moral support (material conditions) to promote youth businesses. NGO programs that mitigate obstacles to these external factors help youth succeed. Youth can then focus on developing good decision-making, confidence and other “soft” skills to increase their chances for success.
A Final Word: Poverty Alleviation versus Business Development
Goals and outcomes of entrepreneurship programs are directly influenced by choices as to “who and how” to target. Necessity entrepreneurship and opportunity entrepreneurship as defined by USAID speak to the end game of a typical youth enterprise development program. Which one is yours? The former has a goal of poverty alleviation. It promotes microenterprise and livelihood opportunities as a way for young people to gain revenue through an income-generating activity or microenterprise creation to escape from poverty. The latter makes the assumptions that youth are sufficiently motivated, that they have no constraints on their choices and that they already operate an enterprise. With sufficient skill sets and training, youth will be positioned to grow their existing businesses. It presupposes at some level that conditions are supportive and that any obstacles or constraints for economic growth can be overcome.
Why is this important? Some programs may confuse activities that support existing businesses with poverty alleviation and therefore attempt to move necessity entrepreneurs away from livelihood activities and into riskier endeavors. Conversely, business development may not provide poverty alleviation in a given community or region. However it may be a very effective strategy for helping a few youth expand their business or employment opportunities. Therefore, it’s essential to survey youth to gain a thorough understanding of their socio-economic profiles, their varied personal traits and preferences, and the context. Armed with these external and internal factors, supportive programming can be constructed around youth to meet their varied needs and guide them to successful development.