Promoting Youth Employment through Entrepreneurship Education - Know About Business (KAB) Programme for University Students in China -

Expert Group Meeting on Cooperatives and Employment organized by UN/DESA Shanghai, 18 May 2006

Satoshi Sasaki Specialist on Enterprise Development and Job Creation ILO Beijing Office

1. BACKGROUND 1.1 Youth employment situation in China With high unemployment and SOE retrenchment, the economic restructuring programmes are in full swing in China. Self-employment and small enterprise promotion are presently high on the national agenda, expecting them to create alternative channels for employment. The youth presents a particular challenge in this scenario. Every year ten million of school leavers join the labour market in search of gainful employment. The challenge is thus one of not only tackling the already sizable unemployed and underemployed population, but also of absorbing the new entrants into the labour market. In both situations, young people constitute the majority. The rapid expansion of institutions in higher education increased the number of graduates recently. The availability of highly trained human resources formed the favorable condition to support the rapid growth of the national economy. However, it also creates pressure on graduates to find appropriate jobs. The competition over popular jobs among graduates has become prominent after 2003. In 2004, 2.8 million students graduated from the institutions of higher education, out of which 73 per cent of them could have obtained jobs in the same year. In 2005, the number of graduates are be increased by 21per cent, supplying 3.4 million new graduates into the labour market. The private sector has been the major employment channels for the new graduates. In fact, more than 50 per cent of them are employed in SMEs and private sector enterprises. Since March 2005, the National Development and Reform Commission (NDRC) and the Ministry of Education have jointly launched an internet-based job fair for university graduates to help them find jobs in SMEs, with the expectation that the graduates would improve the technical and managerial capacities of enterprises, hence contribute in enhancing the business operations of SMEs.

1.2 YEN and ACYF At the UN Millennium Summit in September 2000, state leaders of different countries jointly decided the UN Millennium Development Goals. The creation of the decent and productive employment for young people is listed as one of the goals proclaimed by the UN and governments around the world. In the same year, the UN Youth Employment Network (YEN) was established under the proposal of the UN Secretary-General, which comprises the UN, the ILO World bank and well-known specialists on youth issues, and provides advice and support for the generation of youth employment opportunity and solution of youth unemployment. The YEN takes entrepreneurship as one of the four solutions to employment problem. (The four solutions in short refer to four Es, namely: Employability, Equal Opportunities, Entrepreneurship and Employment Creation.) The YEN Office China is a partnership initiative between the YEN and the All-China Youth Federation (ACYF). The ACYF hosts the office and receives support from its Chinese partners, the YEN Secretariat and partners from the UN and other international organizations. With an aim to promote youth employment and the international exchange and cooperation on youth employment issues, the office will conduct studies, provide policy advice, support project implementation by YEN partners and organize seminars and training. The YEN Office China was officially opened in May 2005. 1.3 Job creation ILO project experiences in China In line with the governments official recognition of private enterprises in the national economy, business start-up training programmes have gained high attention among government agencies and civic organizations as a way to promote small enterprises and absorb ever-increasing workforce. The ILO introduced Start Your Business (SYB) training programme as part of the Project on Strategic Approaches towards Employment Promotion (PEP) in 2001. The project, in partnering with the Ministry of Labour and Social Security (MOLSS), experimented the SYB training in three pilot cities, namely, Baotou, Zhangjiakou and Jilin to facilitate laid-off workers to gain income opportunities through self-employment. The project has been succeeded by the Start and Improve Your Business (SIYB) project since 2004 to expand the activities to 14 cities, while expanding the target groups to include internal migrant workers. It also diversifies the training products like Improve Your Business (IYB), Generate Your Business Ideas (GYB) and Expand Your Business (EYB) to cope with the increasing demand for business skills development by entrepreneurs. These programmes have been implemented through the partner institutes like vocational training centers, social organizations and some higher education institutes. 1.4 Youth Business China (YBC) Youth Business China (YBC) is a youth entrepreneurship education project launched by the ACYF, the Ministry of Labour and Social Security, the State Administration for Industry and Commerce and the All-China Federation of Industry and Commerce. Taking

the successful model of the Youth Business International (YBI), the YBC mobilizes resources from the business community to help young people in starting their businesses by providing advice, access to capital resources, technical and network support. In the attempt to help the government to solve the youth employment problem, the ACYF has established three thousand training centers for youth employment and youth business. However, incentive policies and resources are still under-supplied. Young people are facing barriers in the course of business start-up in terms of culture, policies, knowledge and skills, capital, experiences and networks. Since 2003, the ACYF has been adopting the youth entrepreneurship model from the YBI, which is characterized as: Allocation of business mentors on one-to-one basis. Successful business people will voluntarily act as business mentors for intended young people for three years and help them to entering the local business network. Youth Business Fund will be established to provide eligible young people with interest-free loans without any collateral or guarantee, but they are asked to repay in installments. The main promoter and contributor of the YBC is the business community. Many business people with a sense of social responsibility actively participate in the promotion and management of the project as volunteers by providing capital, technical and network support or encouraging their employees to be the mentors.

The YBC targets the young people between 18 and 35, who are willing to start their own businesses but presently unemployed or seeking for jobs. By April 2005, the YBC raised 7 million yuan as the fund for the project activities. 500 mentors have been registered. So far, 21 young entrepreneurs have been supported to establish their own businesses, which employ 200 people with decent income.

2. PROCESS OF THE KAB PROJECT FORMULATION 2.1 Goal and objectives An important aspect of economic growth in any country is the initiatives taken by key individuals who promote changes and initiate development activities. These persons are called entrepreneurs because they have the ability to identify needs within their environment, gather appropriate resources and implement action to satisfy these needs. If young people are aware of the issues as well as the challenges of becoming an entrepreneur and/or working as in small enterprises, they will be better prepared not only with regard to choosing entrepreneurship as a career option, but also to working productively and succeeding in SMEs. But the question is when and how young people know their potential as entrepreneurs? The Know About Business (KAB) Programme for university students in China attempts to answer this question by providing students with the systematic understanding of business entities and the prospects for establishing the ones by themselves.

The overall objective of entrepreneurship training is to contribute towards the creation of an enterprise culture in a country or society. It is not necessarily to have young people begin their careers as entrepreneurs or self-employed people immediately. Rather, it is to give them awareness and some practice of the opportunities, challenges, procedures, characteristics and other sources of information concerning self-employment and starting a small business, to assist trainees who might need them in the future. Action plan for promoting education for the 21st century issued by the Ministry of Education in 1998 and endorsed by the State Council in 1999 recommended entrepreneurship education for the teachers and students of higher education, as part of its strategy to turn universities into incubators for hi-technology industries. It said such industries would create new employment opportunities. One sobering factor in SME development is the generally high failure rate of businesses. The rate of failure for new businesses is 50% for developed countries and that of developing countries is even higher. In spite of this, self-employment continues to rank high as a career choice everywhere. In many instances, these failures could have been avoided by proper education and training before the business was initiated. 2.2 What is KAB? The ILO developed the Know About Business (KAB), which consists a set of training materials and a new teaching approach for entrepreneurship education. The KAB materials draw on ILOs successful experience in the field of Entrepreneurship Education. KAB is the necessary preparation for young people for the ILOs Start Your Business (SYB) package for setting up a business and, Improve Your Business (IYB) for existing businesses. The generic KAB package comprises nine training modules as follows: 1) 2) 3) 4) 5) 6) 7) 8) 9) What is enterprise? Why entrepreneurship? Who are entrepreneurs? How do I become an entrepreneur? How do I find a good business idea? How do I organize an enterprise? How do I operate an enterprise? What are the next steps to become an entrepreneur? How to elaborate ones own business plan

Also include the Business Games on: (1) Introducing the business cycle (2) Understanding demand and supply (3) Reaching your customer and improving your business

The KAB training materials include the Facilitator Guide and the Learner Workbook with worksheets and a glossary covering all modules. Each module represents a key area of entrepreneurship and is divided into several topics. The titles of the modules are in the form of questions, the answers to which learners should know upon completion of the modules. Teachers/trainers should feel free to adapt the KAB training materials to suit their local conditions. In particular, case studies and examples drawn from local community should be used wherever possible. The involvement of local successful entrepreneurs as guest speakers should also be encouraged, as well as visits to enterprises in the community. 2.3 Long-term perspectives The current project is designed as a pilot phase to test and adapt the Know About Business training programme for a broad introduction in the Chinese National Education. The KAB training should be developed within the framework of the higher education system accredited by the Chinese Ministry of Education. By doing so, it would be easier for universities to introduce the KAB as a regular subject in their school curriculum after the projects piloting phase. For the pilot phase KAB should be offered as a selective course so that students will participate voluntarily in the training with good motivation. As part of the school curriculum, the training fee should not be collected separately.

3. PRESENT SITUATION 3.1 Project launching As a way of ILOs technical support to the YEN activities in China through the All-China Youth Federation (ACYF), the Pilot Phase of the KAB project was launched in October 2005, involving six universities to test the KAB for university students. 3.2 Local adaptation of the training materials The KAB international programme has the generic training materials for the use of vocational schools at the secondary education level. To prepare it for the use of the project in China, the following aspects were considered essential for the use of university students who are not specialized in management: 1) 2) 3) 4) Language translation from English to Chinese Adjusting them to the learning needs of the Chinese students Adapting them to the economic and social conditions in China Reduce the time required for the course within the framework of school curricula (from 140 hours in original to 70 hours)

The ACYF established a team of Chinese experts consists of four university teachers and a SYB master trainer to review the original KAB materials. The first adaptation process was taken place for two months by the team members, which was followed by a review

meeting to confirm the contents of the training materials. The adapted training materials are now considered as the test version to be used in the first pilot course. 3.3 Training of Facilitators (TOF) In January 2006, TOF was conducted for twelve teachers who were expected to organize KAB course in the six pilot schools. Having the Coordinator of the KAB International Programme as the TOF trainer, it was conducted in Beijing for five days. The TOF focused more on the teaching methods of the KAB as requested by participants. The advantage of organizing the KAB in universities is the availability of teachers who are specialized in the subjects discussed in the KAB. (This is not always the case in vocational schools.) The KAB uses more interactive and participatory methods like presentations, small group work, case studies, brainstorming, business games, etc, which are new to university teachers to apply in them in classes. 3.4 Pilot testing and monitoring The pilot KAB course is organized in six pilot schools during the Spring semester of 2006 (February-July 2006). The number of students admitted to the KAB course varies between 20 and 240 in each of the piloting universities. The pilot universities are: Beijing University of Aeronautics and Astronautics Heilongjiang University China Youth University of Political Sciences Beijing Youth University of Political Sciences Tsinghua University Tianjin Polytechnic University

The team of national experts undertakes the monitoring visits to the KAB courses in the middle of May 2006. The initial findings include: The training materials need further adaptation to reflect the economic reality in China and the learning needs of the students in particular the operational aspects of enterprises; Higher expectations of students in Science to start their own businesses; Participatory teaching methods like presentation, guest speakers and business games are well accepted by the students; Involvement of resource persons like successful local entrepreneurs and experts in specific subjects (accounting, for example) complement the role of facilitators in activating the class activities; The basis for knowledge sharing by KAB facilitators (teachers) should be established. The collection of the additional training materials and presentations produced by the KAB facilitators and guest speakers will be helpful; Facilitators need opportunities for technical exchange by visiting each other and learn from good practices in other schools;

Consideration should be given to provide facilitators with continuous learning opportunities to strengthen their teaching skills and update technical information.

3.5 Planned project activities In the pilot phase of the project, it is planned to organize the evaluation meeting after the completion of the pilot courses in the six universities. Based on the results of the meeting, the KAB training materials will be revised and finalized for publication. The second TOF will be organized, expecting 50 universities will join the KAB programme in the second round. The recognition of the KAB by the Ministry of Education as a standard training programme for university students is a key issue for institutionalizing the programme in the education system in China. The ACYF and the ILO will approach the Ministry of Education through the participating schools and intend to obtain the official recognition in the next few years. Since the introduction of the KAB to China, the national experts and teachers, who are involved in the national adaptation of the training materials and the TOF, gradually form the core technical group that can support the KAB programme in the future. The project plans to send some of these people to the international KAB training to be organized in the Philippines in September 2006. They are expected to be the KAB Master Facilitators to run the TOF in the near future.

4. REPLICABILITY 4.1 Self-financed training course as part of the school curriculum The key strategy of the KAB project in China is to enshrine the training course in the general education curricula of the universities. By doing so, it will enables the KAB be easily replicated in many schools without external financial contributions at the operational level. 4.2 Availability of potential facilitators Having teachers in management and economics is clearly the advantage for universities in establishing the KAB course. What is required to the universities is to provide the potential KAB facilitators with opportunity to participate in the TOF to learn the specific teaching methods and update the technical contents from time to time through the internal communication with the peer facilitators and the ACYF. 4.3 TOF and Master Facilitators The project is designed to develop the national capacity to train the KAB trainers in the country so that the project could support the expansion of the KAB in China without

depending on the international support. Key national experts in the adaptation of the training materials should play an important role as the members of the national KAB team, which could provide training of facilitators (TOF) regularly in the long run until Entrepreneurship Education becomes part curriculum of the teacher training institutions. 4.4 Extending KAB to Secondary Education The project plans to adapt the KAB programme to the secondary vocational schools. Taking the advantage of having university teachers being trained as KAB facilitators, the project will select the universities that could work as the Provincial hub in promoting entrepreneurship education and expand the KAB programme to secondary vocational schools in the Provinces. 4.5 Private sector funding An innovative resource mobilization strategy should be developed to support the KAB in the expansion phase. The participating schools will raise necessary funds from the local enterprises to establish the KAB training course in their names. The justification behind this strategy lies with the assumption that the KAB training course would create a favorable human resource base in the local economy to supply well-motivated graduates, who would play key roles in the local business development.

5. CONCLUSIONS AND CHALLENGES 5.1 Conclusions 1) As the KAB project has just launched, it is too early to evaluate the results and impact. 2) University students have high demand in learning entrepreneurship and business start-up. The KAB may well serve the first opportunity for students to know how businesses operate and consider entrepreneurship as an option for employment in the future. 3) The KAB project has high potential to be self-sustainable. It is effective to develop the KAB programme within the existing educational system that can ensure the continuation and further development of the programme with the limited technical and financial support from outside. 5.2 Challenges 1) Despite the fact that Cooperatives is a typical mode of business operation, the limited opportunities are given to young people to know about Cooperatives and their function in the local and national economy. 2) Where to find the link between the youth employment issues and the cooperatives movement in China? (further developing the programme linkage between the ACFSMC and the YEN in China)

For further information on the KAB programme in China, please contact: Mr. Satoshi Sasaki ILO Beijing Office 1-10 Tayuan Diplomatic Office Building, Beijing, 100600, China Tel: 86-10-6532-5091 E-mail: sasaki@ilo.org International Department, All-China Youth Federation 10 Qianmen Dongdajie, Beijing 100051, China Tel: 86-10-8521-2064 E-mail: acyf@263.net