Entrepreneurship education for youth in sub-Saharan Africa: A capabilities approach as an alternative framework to neoliberalism’s individualizing risks

Abstract

Entrepreneurship education is widely promoted as an approach to addressing youth unemployment. Contrasting neoliberal and human capabilities frameworks, this article draws attention to the problematic way in which much of the discourse surrounding entrepreneurship conflates programmes designed to spur economic development through business and job creation with those designed to alleviate poverty. Providing examples from the case of one NGO implementing a youth livelihood programme in sub-Saharan Africa, the authors discuss how a capabilities approach illuminates the importance of attending to youth values and addressing the social, material and institutional conditions that mediate how youths’ skills and resources are transformed into livelihood opportunities and choices.

Keywords

entrepreneurship education employment capabilities approach youth sub-Saharan Africa

I Introduction

Entrepreneurship education has recently emerged among donor organizations, non-governmental organizations (NGOs) and governments as one solution to address the interrelated development challenges of unemployment and poverty in sub-Saharan Africa. This article discusses two distinct approaches that draw on different assumptions about poverty, employment and the role of entrepreneurship education in development. One approach is embedded in assumptions that education develops human capital and that if young people learn the necessary skills they can participate in the labour market. Entrepreneurship within this approach tends to emphasize behavioural aspects of skills, innovation and risk-taking for creating and managing new businesses, and is associated primarily with the goal of self-employment (Naudé, 2012). As the labour market becomes more flexible and uncertain, entrepreneurship programs increasingly emphasize creating jobs and assuming risks from unstable markets, and the human capital approach takes on a neoliberal orientation in which social structures and supports that help mitigate risks particularly for youth in poverty are not a key priority.

In contrast to a neoliberal human capital approach, Sen’s (1999, 2009) capabilities approach provides a framework for illuminating the role of social, material and institutional conditions in mediating how young people convert skills learned in entrepreneurship education programmes into livelihoods and future well-being. This perspective draws attention to the importance of developing the social supports and capabilities that can enable individuals living in poverty to pursue entrepreneurship as a valued choice rather than a necessity in the absence of alternative earning opportunities (Gries and Naudé, 2011).

Although entrepreneurship education programmes increasingly target poor youth, little distinction is made between approaches designed to spur economic development through job creation and those designed to reduce poverty and provide livelihood opportunities. The goals of economic and business development are often conflated with poverty alleviation and programme components may not sufficiently address conditions that constrain entrepreneurship, particularly among marginalized youth. In this article, we illustrate how the capabilities approach is useful analytically to draw attention to the economic and social constraints facing youth that may not be attended to from a neoliberal human capital focus on skills training and business development. The limited resources available to poor youth are often consumed to meet basic needs and respond to emergencies, increasing the sacrifices and risk that investing in business development entails and making material and social supports an important consideration for initiatives that focus on marginalized youth.

Understanding these different approaches to and goals of entrepreneurship education is important because programmes are specifically targeting marginalized youth in sub-Saharan Africa in efforts to address the interrelated problems of unemployment and poverty alleviation. With an increasing youth population in many African countries, there is greater demand for education while at the same time there has been a sharp rise in youth unemployment (ILO, 2011; USAID, 2011; Volkmann et al., 2009; World Bank, 2008). Many youth are still unable to complete secondary school and obtain the necessary knowledge and skills for employment (Garcia and Fares, 2008). Even among completers of secondary and tertiary education, unemployment remains high (Nafukho and Muyia, 2010). Entrepreneurship education, which lacks a common definition but generally refers to programmes that promote self-reliance and opportunity seeking through training and skills development (Mwasaliba, 2010), is regarded as a solution that reframes the purposes and processes of education and the types of income-generating strategies it promotes. However, we know little about how entrepreneurship programmes are being implemented for youth and whether and how they foster employment and poverty alleviation (Chigunta et al., 2005). In this study, we focus on the specific entrepreneurship education practices of an NGO programme for secondary school non-completers in Uganda and Tanzania that includes community based education and training in technical skills; financial literacy and group savings; entrepreneurial skills aimed at planning, launching and sustaining small businesses; and lifeskills, including goal-setting, decision-making, health and nutrition, and conflict management. The goal of this entrepreneurship education programme is for youth to find employment and/or start their own microenterprises linked to market demand in their communities.

In this article, we examine entrepreneurship education approaches utilized by donor agencies and NGOs and reflect on how some initiatives articulate with neoliberalism, by which we mean political economic practices that advocate flexible forms of production in which individuals must become more entrepreneurial to respond to market changes and demands, and bear the associated risks. This changing market affects the daily lives of young people by reconfiguring the choices they make with regard to work, and also by assuming young people have individual freedom and autonomy to improve the quality of their lives. Neoliberal governing practices also oblige young people to take responsibility for and bear the consequences of creating their own jobs (Dean, 2010; Harvey, 2005; Miller and Rose, 2008). In contrast to a neoliberal approach, we illustrate how a capabilities approach offers an alternative framework that situates young people in relation to the local and global material and social conditions in which they live (Sen, 1999, 2009). Rizvi and Lingard (2009: 201) suggest that Sen’s (1999, 2009) capabilities approach is ‘a promising avenue for exploring an alternative imaginary of globalization’, and in this case, alternative education policies and programmes aimed at responding to the effects of unemployment and poverty on youths’ lives. We argue that how organizations and programmes frame entrepreneurship illuminate whether such initiatives address the material and social constraints that limit access to jobs and affect how these youth transform their skills and knowledge into sustainable employment.

This article is organized in the following sections. First, we discuss the discourses, goals and programme strategies associated with entrepreneurship education as business development and as poverty reduction exemplified in two USAID initiatives. We examine how entrepreneurship education is framed in USAID strategies because it has asserted itself as a central actor in entrepreneurship through the documents it publishes, the programmes it finances, and the partnerships it creates particularly with NGOs and other international organizations. In addition, USAID makes clear distinctions between programme approaches for economic growth and job creation and those for poverty alleviation, and these distinctions are often not taken into consideration in other organization’s programme goals or processes of entrepreneurship education. We illustrate this lack of distinction in a recent report on entrepreneurship education for the World Economic Forum. Then, we briefly review the literature on youth, employment and entrepreneurship education in sub-Saharan Africa to situate our study of an NGO entrepreneurship education programme. We include an overview of the methodology used to examine how one NGO is implementing a youth livelihood initiative in Uganda and Tanzania, attending to youth values, and addressing social, material and institutional conditions in an effort to transform youths’ skills and resources into livelihood opportunities and choices. We describe the capabilities approach as an analytical framework that allows for examining conditions that affect youth’s choices and in turn their long-term livelihoods (Sen, 1999, 2009). In the final section, we draw on examples from the NGO programme that highlight processes for transforming endowments into capabilities and capabilities into wellbeing, and we discuss the program supports needed to mediate conditions of poverty. The conclusion reflects on the implications of framing entrepreneurship programs for youth from a capabilities approach to development.

II Discourses of entrepreneurship: Business development and livelihoods out of poverty

Entrepreneurship education arose as a response to failures of school-to-work and technical and vocational education and training (TVET) programmes in securing employment for those who graduate. Human capital approaches to formal education and TVET emphasize the development of knowledge and skills for employment, focusing on educational inputs, whereas recent research and policy has shifted the attention to the creation of jobs to address a persistently high rate of educated but unemployed youth (Adams, 2011; Heyneman, 2003; Psacharopolous, 1991). In reframing education for employment, entrepreneurship education initiatives emphasize basic knowledge and technical skills, entrepreneurial knowledge and skills, and access to microfinance with the desired outcome of business and job creation (James-Wilson, 2008).

While entrepreneurship education is broadly directed at job creation, USAID refers to two distinct approaches that guide policies and programs; one is ‘opportunity entrepreneurship’ or education for business development; the other is ‘necessity entrepreneurship’ or training for the creation of micro-enterprises and livelihood options aimed at getting out of poverty. These terms are often used in entrepreneurship discourse to distinguish between those who pursue self-employment by choice and those who pursue it for lack of other desirable options (Naudé, 2012). The goals and target populations for these two approaches are different, with the former focused on those who currently own small-scale businesses that can be primed for further development and job creation and the latter involving those who are not working and earning money so they can develop micro-enterprises that provide a sustainable livelihood.

These two approaches to entrepreneurship education are also based on different approaches to development: job creation for economic development and poverty alleviation. Naudé (2012) notes in his review of the literature on entrepreneurship that the empirical evidence linking entrepreneurship and development is tenuous and contested. For instance, a high rate of entrepreneurial activity found in low-income countries suggests more necessity entrepreneurship occurs that does not necessarily contribute to overall economic growth. In addition, entrepreneurship, particularly for those who engage in it out of necessity, may not alleviate poverty without social policies that support innovation and mediate risks. Despite a weak or inconsistent relationship between entrepreneurship and economic growth in low-income countries, entrepreneurship education programmes for youth have emerged, in part, as a result of donor agencies recognizing that the pathways to formal sector work and private industry are limited and that programmes need to support alternatives in which youth can have a livelihood in the informal sector, assuming they may at some point break into the formal sector (James-Wilson, 2008). However, it is less clear how these programmes can enable both sustainable employment and alleviate poverty. We now turn to examining the particular goals and programme processes of business development and poverty alleviation approaches in two USAID initiatives.

One example of the business development and opportunity entrepreneurship approach is the US Department of State and USAID’s Global Entrepreneurship Program (2010), along with its accompanying Entrepreneurship Toolkit to help partner countries design, implement and monitor successful entrepreneurship development programmes (USAID, 2011a). USAID states: ‘Entrepreneurship is now recognized as one of the strongest drivers of global job creation, with an important impact on economic growth and political stability’ (USAID, 2011b). The Entrepreneurship Toolkit (2011a: 7) specifically states that it ‘is centered on opportunity entrepreneurship’ where businesses are created and have the potential to grow and expand the labour market. The document further distinguishes the objectives and target groups of opportunity entrepreneurship for business development from that of necessity entrepreneurship for poverty alleviation. USAID (2011a: 22) states that these distinct purposes require targeting different types of entrepreneurs with particular programme and funding mechanisms. For instance,

for anti-poverty programs, entrepreneurial micro-enterprises (including youth, women and minority populations) are an appropriate target and microfinance is a likely (and appropriate) source of funding. For programs that focus on job creation, growth entrepreneurs are a better target, while more appropriate sources of funding might include angel, seed, and venture capital. Projects that aim to create jobs depend on this type of entrepreneur and may necessitate prioritizing this group.

If priority is given to job creation as the mechanism for development without consideration of poverty alleviation, growth entrepreneurs are prioritized; they are also regarded as able to manage risks better than those who are already considered ‘at risk groups’. For example, youth are mentioned in this Toolkit particularly as a vulnerable group who are less likely to have the skills or experience necessary to engage in ‘opportunity entrepreneurship’.

The entrepreneurship programme components for business development in this USAID model include the identification of growth entrepreneurs and the provision of training along with mentoring and networking with other business leaders. The Toolkit also suggests that consistent sources of capital are necessary as are supports in overcoming regulatory, legal and cultural barriers to business development. In addition, this approach emphasizes the importance of attending to employment laws and taxation as necessary policy supports. However, the documents do not attend to how social inequality may constrain economic development even if particular business sectors are developed. Instead, the USAID Toolkit states a culture that tolerates inequality is good for entrepreneurship development. From the perspective of promoting business development, social inequality is not regarded as a problem to address and the potential risks faced in starting a business are the responsibility of the individual entrepreneur.

The USAID Toolkit (2011a: 9) states that ‘the willingness to bear risks and a desire to be independent’ is critical to being an entrepreneur. While the guide acknowledges that a lesson learned from these entrepreneurship programmes is the need for additional supports to mitigate risks associated with investments, an underlying assumption is that entrepreneurs, and particularly young people, can learn to respond to such risks and employ their own creativity and innovation. The guide focuses on how governments can spur entrepreneurship primarily by removing constraints for private sector investment, such as reducing taxation on profits or providing contract regulation and enforcement. It neglects to consider how governments might provide greater social security, particularly for vulnerable groups in situations of market failure or political and social instability. Furthermore, the report gives little consideration to how communities can provide social structures that help overcome such vulnerabilities in the absence of government support, and how community support can abet risks and foster greater social equality.

The approach in the USAID Youth Livelihoods guide presents a distinctly different discourse about entrepreneurship than the approach in the USAID Toolkit, though it also reflects some neoliberal assumptions of individual freedom to choose one’s livelihood and to bear the responsibility for one’s well-being. In contrast to the goals and purposes of entrepreneurship through the USAID Global Entrepreneurship Program, the USAID Youth Livelihoods programme targets out-of-school youth who are often unable to find employment in limited formal employment sectors (James-Wilson, 2008: iv).

The programme components the guide sets out for securing youth livelihoods and providing a pathway out of poverty include the provision of financial, physical and social capital in addition to training for knowledge and skills related to local market opportunities. It suggests that the provision of physical capital in addition to financial capital is necessary when working with youth who do not have access to tools, computers or clothing necessary for business development. The guide also notes the importance of connecting to household and family livelihood strategies, such as involving youth in work their families are currently doing.

While this guide gives attention to specific youth needs and risks they face, neoliberal assumptions of ‘the ethics of self’ are evident through the discourse that suggests entrepreneurial youth are responsible for making their own lives better (Kelly, 2006). Kelly (2006: 18) argues that government programmes often represent youth as being at-risk: the ‘population of Youth at-risk, in its negativity, illuminates the positivity that is the entrepreneurial Self’. The Youth Livelihoods Guide (James-Wilson, 2008: 2) characterizes unemployed youth as a ‘profoundly de-stabilizing force’. Drawing on World Bank and other international organization references, it argues that youth who lack opportunities to sustain their livelihoods are an impediment to national development, contributing to high crime rates, violence, health problems and social instability. The Guide (2008: v) further suggests that the aim of youth livelihood programmes is to foster positive youth outcomes in terms of democratic participation, public safety, education and health. The emphasis in this document is placed on youth’s contribution to and effects on society without attention to the state’s or civil society organizations’ role in providing sufficient education, health care and employment opportunities. These USAID documents, along with the intertextual references to documents and research of other international organizations, represent youth as a threat to development and the cultivation of entrepreneurial skills as a potential solution. Little consideration is given to how necessity entrepreneurship – reflected in the focus on improving livelihoods via the informal economy – is not often a choice and it is not necessarily a ‘sustainable path’ for individual well-being or societal development.

The discourse of entrepreneurship is taken up by organizations often without consideration of underlying assumptions nor the nuances of different approaches. For example, the 2009 World Economic Forum Global Education Initiative, which represented a consortium of donors, NGOs, educational institutions and individual social entrepreneurs, describes entrepreneurship education as a solution to unemployment and poverty without specifying particular youth needs and programme supports. The report, Educating the Next Wave of Entrepreneurs, outlines an approach to entrepreneurship education that specifically targets youth and marginalized groups. The discourse they use conflates necessity entrepreneurship for marginalized youth with business development and job creation without recognition of the risks entailed. In addition, it claims that anyone can be an entrepreneur and that all people need to be more entrepreneurial, particularly in a changing global economy (Volkmann et al., 2009). The report states,

Entrepreneurial potential is in all of us…the only difference is in the age of the entrepreneur. What differs between youth and adult entrepreneurship – given the inherently different levels of intellectual and behavioural maturity – is how entrepreneurship is taught and how it is learned. (Volkmann et al., 2009: 25)

The authors of this report propose a model that assumes entrepreneurship education will foster entrepreneurs and they give little attention to the material and social conditions that may not support entrepreneurial activity, particularly for youth. The report gives no attention to access to financial capital or social networks, nor does it consider the risks incurred if such entrepreneurial endeavours fail. The lack of distinction between programme purposes and processes for promoting opportunity entrepreneurship and necessity entrepreneurship are concerning given the report’s potentially broad influence on donors, civil society organizations and governments, and NGOs such as the case we discuss in this study, that are funding and implementing entrepreneurship education programmes. We now provide a brief summary of relevant literature on youth and unemployment in sub-Saharan Africa to examine how entrepreneurship education is framed in current scholarship.

1 Youth, unemployment and entrepreneurship education in sub-Saharan Africa

Literature on sub-Saharan African youth is characterized by several predominant themes. A central tension is that while youth increasingly make up a demographic majority in this region, employment and economic opportunities in the formal sector are contracting (Chigunta et al., 2005; Sommers, 2003, 2012). Although detailed descriptions of the situation facing youth in Sub-Saharan Africa are limited, there is a growing concern that large numbers of urban and rural youth are marginalized and excluded from education, healthcare and employment opportunities (Chigunta et al., 2005). Additionally, many youth lack supports, such as social networks and material means, for socially accepted pathways into adulthood (Bennell, 2000; Singerman, 2007; Sommers, 2012; Utas, 2005).

The literature on youth in sub-Saharan Africa often frames unemployment as a looming social crisis in which youth are engaged in activities with negative individual and social consequences (Utas, 2005). These concerns have increased the attention given to youth in policy discussions and research literature. Some evidence suggests that in the absence of opportunities to engage in productive behaviours, youth are more likely to engage in drug abuse and risky sexual activities, in some cases to provide alternative sources of income (de Waal, 2002). Other concerns related to idle youth include involvement in crime, organized violence and in certain contexts, recruitment to participate in rebel group activities (Chigunta and Mkandawire, 2002; Rabwoni, 2002). Youth literature suggests a relationship between poverty and unemployment and a prolonged transitional period between childhood and adulthood as youth have few socially viable paths to achieving adulthood (Singerman, 2007; Utas, 2005). This prolonged ‘liminal state’ is experienced among youth particularly in urban areas or in situations of conflict (Sommers, 2012). Thus, the creation of policies and programmes that respond to the challenges of youth unemployment has become a priority among national governments and development partners.

In response to these challenges, entrepreneurship education has emerged in sub-Saharan Africa as a panacea to the youth unemployment challenge (Nafukho and Machuma, 2010). Although entrepreneurship education has become a strategy for economic development in low-, middle- and high-income countries, several distinct themes emerge in the entrepreneurship education literature on sub-Saharan African contexts. In contrast to entrepreneurship education in high-income countries, where entrepreneurship and self-employment are generally viewed as a source of new jobs and dynamic economies, entrepreneurship initiatives in low-income countries are more frequently linked with livelihood improvement at the individual level (Chigunta, 2002). Additionally, entrepreneurship education literature focused on low-income countries attends to a greater variety of factors that impact the success of entrepreneurial endeavours than does literature about high-income countries. Whereas the regulatory environment has been considered a key factor affecting enterprise development across a wide array of country contexts, in the literature focused on East Africa, greater attention is given to the role of political economy, access to microfinance, and sociocultural constraints facing youth (Chigunta, 2002; Chigunta et al., 2005; Nafukho, 1998).

While the literature reflects certain distinctions between entrepreneurship education initiatives operating in high- and low-income national contexts, the diverse target audiences within countries present specific challenges for entrepreneurship education programmes that are seldom addressed. Participants in such initiatives span the socioeconomic spectrum (Mwasaliba, 2010) and even among youth, programmes target university students, secondary school students and out of school youth. However, the distinct challenges facing vulnerable social groups are under-studied. This gap in research about the challenges specific to marginalized youth is reflected in the design of entrepreneurship initiatives that give little attention to the material and social conditions that exacerbate the risks associated with entrepreneurial endeavours for vulnerable youth. Furthermore, much of the literature on entrepreneurship is found outside journals of education, in economic and business publications. This may also contribute to the more general focus on the linkages between entrepreneurship and socio-economic development rather than specifically attending to the diverse educational and livelihood opportunities and challenges facing the wide array of youth targeted by different kinds of entrepreneurship education programmes.

Much of the entrepreneurship literature on Sub-Saharan Africa assumes a view of development as economic growth although a limited body of research is beginning to consider how entrepreneurship can contribute to multi-dimensional well-being by expanding human capabilities (Gries and Naudé, 2011; Naudé, 2012). Naudé (2012) argues that to promote human and socio-economic development through entrepreneurship, governments and donor organizations need to reduce necessity entrepreneurship by providing social supports that can foster innovation and employability. This point is particularly critical for Sub-Saharan Africa where many entrepreneurship endeavours fail after a short period of time (Acs et al., 2004). The premise of this argument is that sustainable development is not achieved when entrepreneurial activities are limited to or rely primarily on the informal economy, which can exacerbate economic and social inequalities. He adds that the conditions essential to avoid necessity entrepreneurship, which include support for job creation and social security by the state, are not typically associated with entrepreneurship especially in a time of neoliberal economic and social program contraction.

In contrast to a neoliberal approach, Naudé (2012: 11) positions entrepreneurship within a capabilities approach, suggesting that entrepreneurship should be a valued human functioning that some choose and that is facilitated by material and social conditions that support entrepreneurial activity. Framing entrepreneurship from a capabilities approach raises the concern for equality and freedom in addition to economic growth as central to development (Sen, 1992, 1999), and therefore, draws attention to youth livelihoods as not only a necessary means of sustaining life on the verge of poverty, but as a pathway to stable, more equitable and sustainable earning opportunities. Adding to Naudé’s application of the capabilities approach, we propose that this framework draws attention to the processes necessary for transforming entrepreneurial skills into capabilities and functionings.

In the next section, we illustrate key components of a capabilities framework that we use analytically to expose both the conditions that constrain youths’ capabilities and functionings, and the programmatic processes for addressing these conditions. We then discuss examples from an NGO effort to foster sustainable youth livelihoods through implementing an entrepreneurship project in Uganda and Tanzania. The remainder of this article draws on qualitative interviews conducted with NGO staff, 60 youth and 20 community stakeholders involved with the entrepreneurship education programme between September 2011 and August 2012. These youth and stakeholder interviews were conducted as a baseline of a five-year evaluation designed to assess if and how participation in the education programme changes youth’s lives. The interviews, conducted by one of the authors in combination with local interviewers, included questions exploring youth values and understandings of well-being, and the factors that support and constrain their livelihood opportunities. NGO interviews throughout the first year of programme implementation helped illuminate how programme design and processes are facilitating transformations among youth and communities. This article draws on a few themes that emerged to illustrate these transformations.

This particular NGO programme enrolls youth who have not completed secondary school and therefore do not have certificates by which to secure formal employment. Youth are involved in a nine-month learning group cycle that includes guidance and counselling (provided by community leaders trained by the organization), technical, life skills and entrepreneurship training (provided by local business owners and community members) and the formation of a saving and lending group among learning group members (facilitated by community based trainers). Following the initial training period, NGO staff support youth to obtain internships, job placement and business start-up support by identifying appropriate opportunities and preparing potential employers to support youth in collaboration with local leaders and business owners. Additionally, the programme is working with financial service providers to develop savings and loan products that will serve the needs of youth participating in the programme. Youth receive a government-recognized vocational training certification at the completion of the learning cycle. Before discussing the programme processes that facilitate youth capabilities and well-being, we outline a capabilities approach as it used to analyse the programme.

III A capabilities approach to entrepreneurship education

In contrast to neoliberal approaches to economic development that emphasize flexible forms of production and assume that individuals equipped with the appropriate skill sets have the freedom and autonomy to improve their livelihoods, the capabilities approach emphasizes the importance of valued forms of production and assumes that an increase in an individual’s skills does not necessarily or automatically translate into expanded livelihood capabilities and functionings. In this section, we present a capabilities model and distinguish between three central concepts: endowments, capabilities and functionings. We then describe two key features that differentiate the capabilities framework from a neoliberal approach to entrepreneurship education. The first is the emphasis that the capabilities approach places on livelihoods that are valued by individuals and society; the second is the consideration of social and economic contexts that constrain livelihoods. In our use of the capabilities approach, we also draw attention to programme processes that transform endowments to capabilities by fostering greater choice of valued livelihood activities, and that transform capabilities to functionings by addressing structures that constrain an individual’s ability to act and choose.

To understand constraints of structures and agency as well as transformational processes, we use a capabilities model (see Figure 1) adapted from the work of Oughton and Wheelock (2003). The model is not intended to be a linear representation of fostering capabilities and functionings; rather, the points of transformation related to social and material conditions and agency are dynamic. Drawing heavily on Sen’s capabilities framework, Oughton and Wheelock adapted the framework to emphasize that individuals are embedded within a household in addition to being embedded in a larger material and social context. In their study of microbusiness initiatives in rural England, the authors found that micro-business behaviour cannot be understood without considering household endowments, which consist of the total productive resources of all members of a household (Oughton and Wheelock, 2003). For East African youth participating in entrepreneurship education programmes, households take a variety of forms. This component of the model suggests that the importance of considering how household endowments enable and constrain the opportunities and choices youth make. Although individuals may also be members of groups beyond the household, such as local communities, this model suggests that household assets are particularly significant.

Figure 1

Source: Oughton & Wheelock (2003).

Endowments refer to the resources or assets that contribute to livelihood opportunities but do not in and of themselves constitute opportunities. Chambers and Conway (1992), who draw on Sen’s work to develop the concept of livelihood capabilities, categorize these endowments as human, social, financial and physical assets. Programmes that focus on skills development increase human endowments by expanding what individuals know how to do or make. Programmes may also increase physical endowments by providing youth with tools, or social endowments by expanding their network of social relationships. However, expanding endowments cannot be equated with expanding capabilities.

Capabilities refer to opportunities or freedoms – the valuable options that a person is able to do or be. The real possibilities open to the individual represent an opportunity for choice that may or may not be realized. For example, while the knowledge of how to sew is an individual endowment, the opportunity to employ this skill in a way that is valued constitutes a capability. Acquiring a skill may expand an individual’s endowments, but it does not necessarily enhance opportunities for the individual with the skill. The combination of valued skills with other resources in a supportive economic and social environment can contribute to expanding capabilities.

Functionings refer to what individuals actually choose or achieve – the life someone actually lives. Functionings that are chosen reflect the various things a person values doing or being. Considering youth livelihood programmes, relevant functionings might include both the activities youth choose to engage in to earn money (working for others, starting an enterprise) and what they choose to do with the money they earn (support others, spend on entertainment or relationships). A programme’s achievement of a desired outcome such as livelihood improvement for youth participants depends not only on the expansion of capabilities available as options to the youth, but the functionings they choose. The point of transformation between capabilities and functionings draws attention to the possibility that youth may use their capabilities in ways that contribute both positively and negatively to their personal livelihoods, families and communities.

Two points of transformation – from endowments to capabilities, and from capabilities to functionings – are the other key components of this model. How transformations occur in specific contexts has not been discussed in the literature using the capabilities approach and we see this research extending the approach in this way. The model suggests that the first transformation from endowments to capabilities is affected by structures of constraint. These structures of constraint operate both within and beyond the household, and are affected by institutions of regulation, power, norms and values. Whereas Sen focuses primarily on extra-household legal institutions, others have contributed to a broader understanding of constraints, emphasizing factors such as gendered power relations (Folbre, 1994) and insecurity in the absence of household safety nets (Oughton and Wheelock, 2003). These structures mediate the ways in which an individual can use their endowments and programme components that address specific constraints identified in these contexts can assist youth to transform endowments to capabilities.

The second transformation, from capabilities to functionings, involves an active choice between the opportunities available. Given that household and societal contexts shape values, these choices are also mediated by the structures of constraint that affect how individuals can use their endowments. This aspect of the model suggests that it is not only the valued options or capabilities available to youth that matter for youth livelihoods, but the actual choice to pursue a particular option for the sake of livelihood improvement. An example is useful to further explain the distinction between capabilities and functioning. In the case of the entrepreneurship education programme we are considering, the desired functioning the programme hopes to observe over time is youth earnings and uses of these earnings to improve their lives. However, many youth raised the concern that among both male and female youth, earnings are often not used in ways that improve livelihoods. Youth often chose to spend earnings on relationships or leisure activities. In some cases, the consequences of these choices are detrimental for the youth themselves or others around them. Thus, expanding capabilities does not necessarily translate into livelihood improvement functioning desired by the programme unless the youth’s own values and desires align with this objective. Life skills components of a programme may have an important role to play in supporting youth to make choices they value and that support livelihood improvement. These are not always synonymous, as capabilities can be employed to serve both helpful and harmful purposes.

From a capabilities approach, policies and programmes should contribute to individual wellbeing, societal equality and socio-economic development. To foster wellbeing and development, programmes need to expand valued choices. Education programmes can have both intrinsic, or non-economic and economic value (Robeyns, 2006), and youth participating in entrepreneurship education programmes may value the opportunities they offer for both their economic and non-economic outcomes. For instance, entrepreneurship education programmes for marginalized youth provide opportunities for future income generation through employment or one’s own enterprise as well as important social relations and learning. In addition, the capabilities approach asserts that the functionings or wellbeing that individuals have reason to value are chosen in part based on information and opportunities they have. Entrepreneurship education programmes informed by a capabilities approach should attend to expanding the valued opportunities and choices available to youth.

The capabilities approach also attends to the economic and social conditions that affect livelihoods and in this case, particularly those that are challenging for marginalized youth to engage in entrepreneurial activities. Although some applications of the capabilities approach place greater emphasis on social and economic conditions than others, Jackson (2005: 102) suggests that ‘a comprehensive treatment of capabilities should go beyond the individual level to examine the social and structural conditions permitting people to act and participate in society’. Attending to how the youth programme facilitates the transformation of their endowments into capabilities and functionings is one such comprehensive treatment of the capabilities approach that is particularly relevant to examining entrepreneurship education programmes.

IV Fostering transformations in an NGO entrepreneurship programme

To foster valued and valuable livelihoods, entrepreneurship programmes need to provide not only skills and knowledge, but to transform structures that constrain these endowments – or skills – from becoming capabilities sets that youth can then use to pursue valued livelihoods. In this NGO entrepreneurship programme we identified several significant social and economic constraints. One key social constraint for youth to develop capabilities and transform them into livelihoods is negative community perceptions of the programme’s target youth and in turn, they lack the social networks needed to engage in valuable work. In the case of this NGO, the programmatic feature of working with youth to select from a variety of vocational training programmes aligned with market demand after a period of guidance and counselling helps ensure that youth are provided with skills that are valued personally and in the larger community. In addition to guiding the youth to identify their strengths and pursue their goals, the programme fosters community support and ownership by investing in the capacity of local Community Development Officers. These local leaders are trained in guidance and counselling and involved in working directly with the youth, a strategy that aims to cultivate a supportive community context for youth.

Developing such a supportive community context is a sharp contrast from the current picture of community perceptions of youth painted by programme participants when they were interviewed part way through the learning group cycle. They expressed that adults in the community generally do not trust youth –particularly male youth – and are therefore hesitant to provide them with employment. The widespread distrust of youth and the lack of adult support they receive to navigate what was referred to in one community as ‘the foolish age’ of adolescence is another social constraint to livelihood opportunities. By facilitating interaction among youth, local leaders and reputable business owners, the programme fosters community trust and adult mentoring – two social supports these youth are seeking through their involvement in this programme. Furthermore, this approach seeks to break down the barrier of distrust, enabling youth to learn and seek future earning opportunities.

One of the economic impediments we identified to entrepreneurial activity that the programme seeks to address is the challenge of acquiring the capital necessary to launch small enterprises. Some organizations supporting entrepreneurial activities have approached this challenge by providing youth with start-up kits, fostering the expectation for NGOs to provide start-up capital. In contrast, this NGO addresses the need for capital by training and facilitating the learning groups to establish a registered saving and lending group among the members. Group members develop their constitution and determine how much each member is expected to contribute on a regular basis. The saving and lending group provides a variety of funds, allowing money to be borrowed at different rates for different purposes (for example, borrowing from the social fund for family emergencies entails a lower interest rate than borrowing from the main fund for investing in a small enterprise). This approach addresses the need for capital and its participatory design helps ensure that youth are not expected to contribute or repay at rates that are inaccessible given their economic circumstances.

Even with the knowledge and skills necessary to save, saving money is not a viable means of acquiring start-up capital for many necessity entrepreneurs. With family members who support themselves primarily through subsistence agriculture and live on the brink of survival, immediate needs often consume limited earnings. Medical emergencies quickly eat up slowly accumulated savings. This organization recognizes that saving and lending groups can only go so far as a means of acquiring start-up capital, so they are in the process of working with local financial service providers to develop and link programme participants with specially designed financial products to meet their needs. Their efforts go beyond focusing on individual youth and address the barriers these youth face to accessing capital at the level of financial institutions. By addressing the social and material conditions that circumscribe youth livelihoods in this way, the programme attends to the transformation of endowments into valued capabilities – educational, economic and social capabilities.

The second transformation, from capabilities to functionings, involves the choice of functionings that contribute positively to individual and community livelihood and is addressed by the programme’s approach to life skills. In addition to providing youth with technical, financial and entrepreneurial skills, the programme integrates life skills across all three components. This aspect of the programme engages youth in reflecting on the motivations and potential consequences of their decisions, and supports them in making decisions that are more likely to enhance their social relationships and economic livelihoods. Many of the youth interviewed expressed that seeking this kind of advice and counsel from elders in the community is one of their primary strategies for overcoming the challenging circumstances that have sent the lives of their peers into a downward spiral. They also expressed that one of the programme’s initial impacts has been to improve their social relationships and increase their respect for others.

A common story told by youth interviewees is illustrative of how life skills support the transformation of capabilities to the kind of functionings that support the goal of livelihood improvement. The allure for youth to spend extra income on leisure activities, luxury items and relationships was expressed by both male and female youth. After participating in a programme in which they were encouraged to plan for their futures and to reflect on the consequences of the choices they make regarding relationships, many youth explained that they have begun to change their spending habits. These changes were often accompanied by a decision to associate with new peer groups and to avoid certain environments and kinds of relationships. These strategies supported through the life skills and adult mentoring components of the programme have encouraged youth not only to earn, but to use their earnings to engage in behaviours and relationships that are likely to improve rather than compromise their future livelihoods.

The processes of this NGO exemplify a number of ways in which entrepreneurship initiatives can not only expand an individual’s endowments, but also transform these endowments to capabilities and functionings. Central to their approach is the recognition that although opportunity and necessity entrepreneurs may face similar challenges to launching new enterprises, these challenges are accentuated among youth in poverty. Opportunity and necessity entrepreneurship both require the accumulation of capital and the willingness to invest this capital despite the risk that an enterprise may fail to generate profit, yet the barriers to achieving these prerequisites are greater among youth from families and communities in which available capital is extremely limited. Jobs are scarce, and those who fall into the ‘necessity entrepreneur’ category are also those who most often lack the qualifications necessary to access earning opportunities. Living on the margins of society, these youth often fall out of the networks of reciprocal social relationships that employers often depend on to fill available job opportunities. Without social relationships, bribery is often required to access earning opportunities. This phenomenon further excludes male youth who lack the financial resources necessary to access employment. For female youth, this bribery often takes the form of sexual favours, putting their health at risk.

Without careful attention to social relations and material conditions and attempts to design creative solutions that go beyond the individual, the programme would have little hope of success. Yet many entrepreneurship training programmes that seek to alleviate poverty focus primarily on expanding individual endowments or improving economic conditions, with the primary objective of fostering the growth of enterprises. Without moving away from a neoliberal and toward a capabilities framework for thinking about the endowments and capabilities that lead to improved social and economic livelihoods, such an outcome is unlikely to be achieved. Furthermore, such programmes miss opportunities to facilitate improved social relationships, which are both a means to improved economic opportunities and in the eyes of many youth, a valued outcome in and of itself.

V Conclusion

In this article, we have discussed how a capabilities approach that frames entrepreneurship programmes goes beyond individual endowments that are the emphasis of many programmes to understand the social and economic contexts that particularly affect youth in becoming entrepreneurs. This research extends the usage of the capabilities approach by focusing on the transformational points between endowments and capabilities, and capabilities and functionings. We have illustrated how one NGO programme can support these transformations; however, NGO efforts remain limited if government policies do not address constraints that perpetuate social and economic inequalities.

Although the NGO programme considered in this article is addressing some of the key constraints that an analysis using the capabilities approach reveals, the youth participating in the entrepreneurship programme continue to face numerous economic and social constraints to employment and well-being that are beyond the scope of one programme and one NGO to address. Their efforts to involve local officials and businesses people in the leadership of the programme and develop local capacity to respond to youth challenges are a hopeful step in the direction of creating sustainable change. However, they also point to the need for greater engagement on the part of national and local governments in creating the conditions that ensure the success of initiatives that support both opportunity and necessity entrepreneurs.

A capabilities approach to entrepreneurship education programmes reveals the limitations of a neoliberal discourse that draws many policy makers to entrepreneurship as a solution to youth unemployment in the first place. It also illuminates important ways that governments, NGOs and communities can support efforts to cultivate environments in which youth equipped with the necessary skills and resources can translate these skills into capabilities and improved livelihoods. Without governments committed to levelling the playing field, necessity entrepreneurs will not succeed as they transition out of programs and into competitive and struggling marketplaces. The chance of failure and its associated risks are far greater for youth from households and communities with limited and fragile safety nets.

Footnotes

Acknowledgements

This analysis is based on a larger project funded by The Master Card Foundation in a grant to the University of Minnesota. The lead author serves as a co-PI of the project.

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