The Role of Micro and Small Enterprises in Reducing Youth Unemployment of Technical and Vocational Education and Training Graduates in Addis Ababa
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Date
2007-07
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Addis Ababa University
Abstract
Extreme poverty and youth unemployment have been critical problems and concern for developing
countries. Cognizant (j/ this, Technical and Vocational Education and Training (TVET) institutes
are particularly viewed as major instruments to attain the desired development and employment. In
this regard, Micro and Small Enterprise (MSE.I) are the main income generating activities of youth
operating enterprises in Ethiopian cities and towns thereby contribute to unemployment reduction
and poverty alleviation. Overall. allention needs to be given to the neglected area, especially, such
as the role orthese MSEs ' in slIslCiinable employment creation./or youth TVET graduates.
The objective of the research was to identifY the role of MSE in reducing youth unemployment or
creating employment opportunities for rVEr graduates in Addis Ababa City Administration,
speci/ically in the Cooperatives Induslry Areas (CIAs) and to provide possible solutions. rhe
Similarity o/training and current job orMSE operators, the factors of self-employment, the causes
of unemployment. the assessment 0/ underemployment, the contributions 0/ the MSE sector, the
provision 0/ credit services. and the stanis o/BDSfacilitation were the major themes of the study. In
order to gather relevant in/ormation/i'om MSEfacilitators and rVEr graduates, descriptive survey
method was employed. Moreover, jive Cooperative Industry Areas (CIAs) was included in the study
that had highly concentration of both types o/formal and non-formal rVEr graduates who are
operators o/MSEs in Addis Ababa CIAs. The selections (j/those CIAs were based on 'one CIAji-om
one Sub city ' basis using purposive sampling technique. Since both types of rVEr graduates are
highly concentrated in those jive sub cities. 52 formal rVEr graduates, 30 non-formal rVET
graduates and 20 MSE/ aeili'ators (/iJllr Regional MSE faCilitators, eight Sub city MSEfacilitators,
eight Kebele MSE officer.l) were taken using availability sampling technique.
Based on Ihe basic questions or Ihe study, the coliected data through two main groups of
questionnaires were analvzed Finally, summw)' of major jindings, concluding remarks and
recommendations have been made based on the major themes of the research. The research results
revealed that the majority or the TVET graduates' present job was completely di./Jerent /ronl their
training area. In addition. among them the majorilies were not self-employed ajier graduation and
didn't obtain wage employment alier graduatiOn. Moreover, the current production capacity (j/
their enterprises ' was/ound being under production capacity and most of the rVEr graduates are
currently looking .lor other jobs. Consequently, most of the TVET graduates joined in to the MSE
business because 'hey could not have any other options. Above all their production was in problem
due to lack of loan. Currently, they need assistance or BDS and market place .lor their products.
Overall, the sustainability 0/ employmel1l 0/ those yauth rVET graduates was critical. There./ore,
thefol/owing recommendations are drawn: (I) faCilitate advanced short and long term trainingfor
those misplaced graduotes Ihrough on- the~job training (the training, the trainer and the trainee in
the workplace): (2) iv/icro Finance Institutions (MFh), rVEr institution offiCials and MSE
jilcilitators should recogniZl! and make a conducive environment by considering the major
determinanl/ilctors o(sel/:emploYlllent'/or youth TVET graduates a/ier graduation; (3) to minimize
unemployment afier graduation, tminees should be involved in part-time work at least in voluntwT
service term while they were allending their training in line with the apprenticeship program; (4)
the f ederal government should also intervene more on the expansion of CIAs for sustainable
economic basement as well as business incubators should be expanded in evel), sub city level; (5)
regional MSE and!vlFl oUicials wi,h col/ahoration of TVET institutions should apen branch onlces
in evel), TVET centers; (6) MFfs l1Iith col/aboration of government Banks and Private Banks should
creale reasonable rate 0/ loan interest ./01' !viSE operators in the CIA .1'; and (7) in order ta provide
BDS faci lity, other thlln gOl'ernl71el7l. non-governmental and private organizations should
participate lhrough in :tee IlCr se/'lliec 'procedure.
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Keywords
Role of Micro and Small Enterprises