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Chapter six - What are the needs of the informal sector?


Introduction
Non trade-skills training interventions
Pathways to self-employment
The variety of pathways and their links to education and training
Packages
Concluding remarks


Introduction

This report is concerned with the education and training needs of the informal sector. However, it is necessary to consider how sufficient education and training are for the satisfaction of the overall needs of the informal sector. In many of the programmes we have considered so far, technical training has been complemented by a number of other inputs. This chapter will seek to consider the extent to which education and training need to be complemented by other interventions if they are to be effective components in preparation for self-employment.

These issues will be tackled by a two-fold approach. Firstly, we shall consider some of the ways in which other inputs have been used to address the needs of the informal sector. However, as this is a report about Education and Training for the Informal Sector we will not dwell on these inputs to a degree that would reflect their importance relative to education and training.

Secondly, we shall attempt to make sense of the often conflicting views that emerge from a reading of the case studies and policy papers that make up the relevant literature. The aim of this section will be to develop an idea of what pathways to self-employment already appear to exist, and what possible package or packages of interventions in the informal sector can be proposed. At the end of the section we shall need to revisit the policy climate that would be needed to underwrite changes towards the informal sector

Non trade-skills training interventions

In this section we examine some of the dimensions of support to the informal, micro-enterprise sector that are not principally concerned with education and training, and are not usually offered through regular educational and vocational training institutes. They consist of a series of financial and non-financial interventions and initiatives in the enabling environment that were referred to in chapter one. Most of them do have an important element of training inevitably involved but that is the accompaniment of the main purpose, whether that be credit, technology, marketing or whatever.

Credit

There is a considerable body of opinion that states that credit, not training is the principal need of the informal sector (Berger and Buvinic 1990; ApT 1993a). Even in programmes with a primary focus on training (e.g. KYTEC) there has been a shift towards the perception that training should be supported by credit. Equally, there are a number of programmes stressing credit but acknowledging a role for training as well. In some cases credit is dependent on attendance of training courses or presentation of an adequate business plan (e.g. SEDCO in Zimbabwe).

Nonetheless, there have been a number of programmes which have been based on the assumption that a primary focus on credit is the most efficient way of assisting the informal sector. Increasingly, what have been termed minimalist credit schemes have developed. These have focused on the essential requirement of sustainability, and have therefore been contrasted with earlier schemes that offered credit at much less than market rates, or had higher administrative costs, or poor strategies for repayment. Minimalist approaches tend to offer commercial rates of interest, reduce administration to a minimum, and use cross-guarantees to ensure high repayment. The cited low cost and high sustainability of such programmes are key as these permit such programmes to reach very large numbers of clients (Berger and Buvinic 1990; ApT 1993a). Minimalist credit is also very attractive as it has a good record of reaching the poorest, and women in particular, e.g. the Grameen Bank in Bangladesh (ApT 1993a) and its parallels that have been introduced for example in Kenya (K-REP 1993b).

However, the claims made for minimalist credit are not without their critics. Some of these point out that the degree of self-sufficiency which they achieve has not been sufficient to convince many banks that such schemes make commercial sense (e.g. Jackelen and Rhyne 1991). Indeed, this is among the conclusions of an evaluation by the World Bank of its long years of experience in this field (Webster 1990). Moreover, for those who fail in their enterprises and are unable to repay their loan, credit turns into debt. This affects the programme as well as the individual as it reduces the amount of credit available for future borrowers (don Pischke 1992).

There are other potential disadvantages in such programmes, even when they have been judged to be successful. Assessing success is too often done in simplistic economic terms, and consideration of the sociological impact is too often absent. For example, crude repayment rates do not tell anything about indebtedness of poorer members of group-based schemes to wealthier members (ApT 1993a).

Minimalist credit also tends to be used for trading rather than productive activities. In the case of PRIDE in Kenya, an evaluation of programmes found that only 13% of borrowers were engaged in productive activities (PRIDE 1990). Whilst artisans frequently cite credit as a principal constraint, it is by no means the only one. Evidence from the ILO's assistance programme to the informal sector in Francophone West Africa (e.g. Maldonado 1989) suggests that artisans in credit schemes reach a point when what they want next is training or some other intervention. This is also the conclusion of the Kenya Rural Enterprise Programme (K-REP) (Oketch 1993) and the Gemini Project's studies in Southern Africa (Mead 1994). Indeed, there is evidence that default is often the result of credit leading to business expansion beyond the managerial competency of the borrower (Harper 1984). Such conclusions suggest that credit is of relatively greater significance for subsistence- rather than enterprise- level informal sector actors.

There appears to be a growing awareness that minimalist credit is only a partial answer to the needs of the informal sector (Hailey 1991). Increasingly, programmes which initially provided credit alone are now providing a package of supports. Some credit providers are entering into alliances with other agencies which are better able to provide other services.

There has also been a tendency in recent years to stress the need for credit programmes become more institutionalised. This has often led to an increased focus on the incorporation of commercial banks and other financial institutions into the management of such programmes. Clearly there is a need to raise the awareness of banks and other financial institutions regarding the potential of the informal sector. This awareness can be seen in the ILO project with the College of Banking and Finance in Kenya (Tolentino and Theocharides 1992); in the training programmes of FACET BV, from the Netherlands; and in the credit guarantee funds of FUNDES from Switzerland (Oehring 1990).

One other dimension of these credit developments should be underlined. One reason that the minimalist schemes have been taken up enthusiastically in rural and urban areas is that the interest rates for informal credit have been much higher than the commercial bank rates that 'formal' informal sector credit schemes have come to adopt. Very little is actually known of the impact upon local, informal credit arrangements of this new money for credit that has come in from donors via the Banks, and NGOs for onward lending to the informal sector, but it is just possible that it has threatened the livelihood of the informal credit sources. This may well be a good thing where informal credit has been highly exploitative and associated with rural indebtedness. If on the other hand, as has been so often the case, the mood in the donors suddenly switches from their current but possibly short term fascination with credit to some other priority, then the traditional credit networks will need to be reactivated.

Business Skills

There are a number of programmes which are primarily designed to enhance the business skills of informal sector actors. These have tended to focus on the "emergent entrepreneur" rather than the subsistence levels of the informal sector. However, there is nothing in such approaches which precludes them from addressing all parts of the informal sector, as we shall see subsequently.

One influential programme which focuses primarily, but not exclusively, on emergent entrepreneurs has been developed in Colombia. Desarrollo de Pequeñas y Micro-Empresas [Development of small and micro-enterprises] (DESAP) is a programme carried out by the Foundation Carvajal in Cali (Harper 1989a). DESAP confines itself to work with existing small entrepreneurs and self-employed in Cali, although other agencies have adapted the model for other urban centres in Colombia and elsewhere (Ramirez 1993a). This programme is based on the belief that entrepreneurship is central to economic and social development (Lohmar-Kuhnle 1992). Applicants wishing to undertake DESAP courses must have good levels of self-employment experience and technical skills.

DESAP offers a seven week course of evening classes which deal in turn with a series of key managerial concepts, always relating them to informal sector realities. Each week is a self-contained unit but builds on the previous weeks. Clients are free to spread their participation out over whatever period of time is convenient for them. Many do not participate in all courses, but still can be considered to have benefitted (Harper 1989a).

Each participant also receives a total of 16 hours of individual business advice from a specialist tutor. There is further business management advice from economics students who have received basic training from DESAP in entrepreneurship advice. DESAP also assists trainees in obtaining credit. After this has been acquired, there follows a two year period in which DESAP continues to provide follow up services. This includes assistance in the establishment of procurement and marketing cooperatives (Harper 1989a; Lohmar-Kuhnle 1992).

In order to ensure that only the serious will attend, course fees are kept relatively high, but are payable in instalments, allowing trainees to decide how much training they need.

The programme has received very favourable evaluation (Harper 1989a) and has been adapted for use in a large number of other projects. Significantly, over 50% of participants are female and they are reported to perform better than the men (Lohmar-Kuhnle 1992).

The success of the programme appears to be based on a number of key principles. Firstly, that there is a market of self-employed people willing and able to pay for such training . Secondly, that specialist business advisors must have theoretical knowledge, but that this must be backed up by a thorough knowledge of the specific conditions of the local informal sector. Thirdly, that for a target group with a limited formal educational background, classroom learning must be interactive and grounded in the experiences of the participants.

The Euro-Action Acord Small-Scale Enterprise Programme in Port Sudan is an example that suggests that a similar approach to that of DESAP can be extended to more marginal sections of the informal sector (Harper 1989b). Even though the target population is poor (many are refugees), the programme is based on the assumptions that they have potential to develop successful businesses and the ability to contribute towards the cost of services provided to them (Lohmar-Kuhnle 1992).

The programme started primarily to provide credit but quickly developed into an integrated package (Harper 1989b). It has trained a number of local business consultants who are responsible for business support services. Local craftsmen have been found who will provide technical training for a fee. Such a programme is both cost effective and appropriate.

Both these programmes were primarily intended to provide entrepreneurial skills to informal sector actors. However, in both cases good research and flexibility allowed them to react to the wide range of needs that exist in reality.

A feature of both programmes also has to be the quality of the business advice being offered. Another mechanism for providing this key element available been developed by the Kenya Management Assistance Programme (K-MAP) which gets large businesses to make their mid level and top level managers available to the owners of small scale business for advice and counselling, on a voluntary basis. Again there is a strong tendency for this to be aimed at the emergent entrepreneur rather than the subsistence self-employed (Pratt 1993).

Entrepreneurship Development

The above programmes are pragmatic and practical. They select target groups with which they can work and they seek to provide them with services which reflect the realities of both the agency and its clientele. We have also examined programmes based in the vocational training system which attempt to promote similar, practical business skills. However, there is another, very different approach to developing small businesses. This focuses explicitly on the "emergent entrepreneur", seeking to develop entrepreneurial awareness and/or attributes (Hailey 1994).

There are two principal approaches that can be identified here. Firstly, the promotion of business awareness and the creation of an enterprise culture. Secondly, the creation of entrepreneurs and fostering of entrepreneurial attitudes (Hailey 1994).

Promotion of Business Awareness and the Creation of an Enterprise Culture

In this approach awareness training is used to overcome the ignorance or suspicion of enterprise of groups or individuals. At the programme level, the focus is on awareness raising and the overcoming of cultural inhibitions. Such programmes might seek out positive role models and seek to make entrepreneurship culturally appropriate (Gibb 1988).6 There is, additionally, a national level that is also of great importance. It is at this level that the ideological battle to create an enterprise culture is waged. This is well illustrated by the efforts of the Conservative government in Britain during the 1980s (Gibb 1988). Such an approach has also been attempted by the National Board for Small Scale Industries in Ghana. Evaluation of its efficiency has been negative, however (Boeh-Ocansey 1993).

6 It has been argued that what counts as entrepreneurship varies across cultures (King et al 1992), thus making this process more problematic.

We have stated above that such approaches focus explicitly on entrepreneurship. However, the focus on developing positive attitudes towards small business lends itself to a wider application across the informal sector. Indeed, it could be argued that some form of orientation of this kind is a necessary component of any worthwhile programme which seeks to encourage informal sector activities. While there is plenty of evidence about how, for example, the United States encourages this enterprise culture (Nelson 1993), much less is known about how the existing cultures of enterprise that are evident within (and which differentiate) parts of the informal sector can be supported by more formal insights into business awareness (Marris and Somerset 1971; Macharia, 1988; King 1993).

Creation Of Entrepreneurs And Fostering Of Entrepreneurial Attitudes

This approach comes out of the Achievement Motivation Training (AMT) model. It is based on the belief that an individual's entrepreneurial attitudes can be identified and developed. Its theoretical underpinning comes from the work of McClelland which argues that entrepreneurial behaviour is associated with measurable character traits such as "need to achieve", risk taking, and initiative (Hailey 1994).

AMT helps identify and develop these key entrepreneurial traits within the potential entrepreneur. This is achieved through the creation of personal awareness; generation of self-confidence; establishment of personal goals; and development of strategies to achieve them. Group sessions, questionnaires, and self-assessment exercises are all common methodologies used (Hailey 1994).

AMT has been adopted in a number of countries. In India, it forms a major part of the New Enterprise Creation approach of the Enterprise Development Institute of India (EDI-I) (Awashti, Murali and Bhat 1990). EDI-I bases its selection of trainees solely on the assumptions inherent in the AMT model.

The entrepreneur identification and selection mechanism which precedes the training is based on the following key assumptions:

a) That all persons cannot be entrepreneurs as all entrepreneurs have certain traits;

b) Such traits are identifiable (and measurable) through some psychological, behavioural tests and social indices;

c) people possessing these traits at a certain minimum level can be developed to acquire necessary dimensions of entrepreneurship. (Awashti, Murali and Bhat 1990: 44)

Such an approach has aroused great criticism. The academic research behind it has been questioned as over simplistically behaviourist. The approach is also seen as culturally-specific. It is argued that it is a costly approach yet can demonstrate little in the way of results. Moreover, it is criticised for being excessively selective (Hailey 1991 and 1994). In practical terms there have also been problems in the implementation of this approach in India due to a lack of coordination of provision. Furthermore, unlike the promotion of business awareness approach, this model is very much narrowly focused on those with very evident entrepreneurial potential. 7

7 There is, however, one special case where such methods have been Used for populations broader than the usual target groups: South Africa. There, a number of approaches building on McClelland's work and that of others, have been disseminated to large numbers of industrial workers. This appears to based on a premise that Africans naturally have low "need to achieve". levels and thus are poorly attuned to the realities of free enterprise. In this particular context, therefore, AMT style approaches have been criticised for their racial and ideological Underpinnings (Kraak 1991).

Even where, as in the case of EDI-I, the AMT approach is accepted, it is rarely used as the sole input. In the EDI-I model, for example, AMT constitutes about 25% of the total training package (Awashti, Murali and Bhat 1990).

Another example of an entrepreneurship development programme comes from Ghana. EMPRETEC is an international programme of the United Nations Transnational Corporations and Management Division (UNCTMD). In Ghana prospective entrepreneurs are selected according to their "personal entrepreneurial competencies" (Boeh-Ocansey 1993: 39). An intensive ten day training period follows during which these competencies are developed further. Post-training advisory services and on-site visits are provided. EMPRETEC-Ghana also assists in the accessing of credit (Boeh-Ocansey 1993).

Other approaches accept that motivation is important, but see it in less deterministic ways. Gibb (1988) argues that many successful entrepreneurs would not score highly in the AMT tests. What is important is commitment to the idea of running a small business. This, he argues, can and should be developed in any good small business development programme.

As yet a strong body of evidence indicating the success of either the awareness raising approach or the development of entrepreneurs has not emerged, although mildly positive evaluations of the latter are emerging from the Indian experience (Gupta 1990; Harper 1992). As with enterprise education in schools, the awareness approach is likely to remain difficult to quantify and may run into serious problems of cultural specificity.

In the case of the entrepreneur development strategy, its selection mechanisms should guarantee that the majority of its graduates are successful. Nonetheless, it must be remembered that attempts to develop entrepreneurial attitudes and skills through such programmes are an example of what we described in our first chapter as "planning for what was traditionally unplanned". The majority of existing successful entrepreneurs were not created through such courses. Indeed, it is possible that the very cultural contexts in which such programmes have been judged to be successful might be those which foster entrepreneurship regardless of any such external intervention.

It may be, therefore, that such programmes are largely not generalisable. However, there is a more problematic interpretation. It is possible that there is a limited number of successful micro-entrepreneurs that can be supported by the small local markets of many developing countries. Therefore, the success of the more formally trained entrepreneurship graduates may be at the expense of practically formed entrepreneurs. Tentatively, perhaps it can be expected that these graduates will come from relatively wealthy backgrounds. This might be reflected in the number of university or college graduate focused programmes. Therefore, they could be expected typically to have greater access to start up capital than many traditional entrepreneurs. This negative equity impact is one that may require further consideration prior to major donor support for such programmes.

Social and General Education

We have already encountered a number of programmes and projects which have a very broad vision of the skills required by those seeking training. The AMT model above springs from the important insight of McClelland that the trainees' awareness and attitudes are in need of development in the same way as their competencies. This realisation is also central to the efforts of many of the programmes which seek to target more disadvantaged groups than those to which AMT and entrepreneurship development are directed.

A concern for the holistic development of the individual is reflected in NGO programmes targetted at the most disadvantaged, for example in the CIDE and Salesian approaches examined previously. This concern stems from the belief that one aspect of the disadvantage experienced by this population is an inadequate degree of socialisation. This was particularly evident, we noticed in the previous chapter, in the attitudes of many women towards business development.

However, in these examples, the principal focus remains on technical training. In the case of CIDE, approximately 25% of the training period is devoted to personal and social development (Messina 1993). In the case of Salesian institutions, this element is reflected more in the hidden curriculum and in the stress on extra-curriculum activities (Lohmar-Kuhnle 1992).

There are, however, programmes where the balance is much further in favour of a personal and social development approach. Numerous examples of this approach come from India (Thomas 1993) where the Gandhian influence has undoubtedly been significant. However, we shall focus here on one of the most celebrated examples from the Caribbean: Servol from Trinidad.

Servol was originally set up as a vocational training organisation in response to the massive youth unemployment problem on that island (Pantin 1984; Montrichard 1987). However, it quickly became apparent to the organisers that the target population had far greater needs than simple manual skills.

Servol has responded with a four stage programme. Firstly, there is a 12 week orientation course which aims to develop individual awareness of the values of self and community. During this period trainees receive health education and counselling, and are encouraged to develop their sporting and creative abilities (Montrichard 1987).

This period is followed by the Adolescent Parent Programme, which again lasts 12 weeks. This course arises out of an awareness that many of the youth are likely to become parents at an early age but frequently lack a proper awareness of what is required to become a good parent. This course takes half of each day with the other half being devoted to basic manual skills development. In recognition of the need for flexibility, training takes place in two 6 week courses in related trades. The focus is on basic use of the tools and simple maintenance techniques (Montrichard 1987).

The next 6 to 8 months see a further development of technical skills as trainees choose to specialise in one of the skill areas they were introduced to above. The focus here is on training-with-production. This is seen as having educational, attitudinal and financial benefits (Montrichard 1987).

Finally, when trainees have reached the stage where they can work with minimum supervision they are attached to formal or informal sector employers for an apprenticeship period. All income is paid to Servol which then disburses 2/3 of it every two weeks on trainee attendance at the centre with their employer evaluations. Their progress is also monitored by a Servol training officer who visits the place of work periodically. At the end of this period the trainees return to the centre to sit national trade tests. On sitting these tests the trainees receive the balance of their wages. This can be in the form of cash, a bank account established for them, or as tools (Montrichard 1987).

Servol has proved to be highly successful in finding (self) employment for large numbers of youth from the most disadvantaged sections of Trinadadian society. More importantly, it has fostered self-belief where there was little before. The clearest measure of Servol's success is the level of demand for its courses which far outstrips supply (Montrichard 1987; Frost 1991). A highly significant confirmation was the World Bank's insistence that attitudinal training be included in a large-scale programme for unemployed youth which it is funding in Trinidad (Mahabir 1993).

The success of Servol led the Trinidad and Tobago Ministry of Education to enter into an agreement with the NGO in 1988 (Mahabir 1993). Servol was to take over all public preschools and was to extend the Servol training model as widely as possible. Servol was to be responsible for equipping the centres, which would be community built. Servol would also train teachers, with the responsibility for their salaries slowly devolving to the Ministry (Mahabir 1993). As well as 154 pre-schools, there were 41 Adolescent Development Life Centres by the beginning of 1993 (Mahabir 1993).

This alliance appears to be working, unlike many other attempts to develop collaboration between the state and large NGOs. The reasons for this success are not immediately clear, although some suppositions can be advanced. Servol is strong enough to avoid co-option by the state (which in a small island state may not be that powerful). Crucially, it has an ideology which makes it successful and which is respected by the state. The Ministry itself is not overly threatened as the types of provision delegated to Servol are neither mainstream nor prestigious in its eyes.

Training for disadvantaged groups is often criticised for being of low efficiency. It is argued that such populations are unemployable and that training should be given to others more likely to benefit from it. However, the example of Servol suggests that in the case of one such group, alienated youth, much can be done. The Servol experience (and those of CIDE and the Salesians) indicates that the first need of this particular target group is self-belief (Corvalan 1994). Only when this has been facilitated can worthwhile training for productive (self-) employment begin.

Follow-Up and Extension

In 1987 in a piece of research commissioned by the ODA, Grierson examined 33 vocational training based self-employment programmes. This research sought to identify the key design characteristics that contribute to the success of such programmes. This research found two factors to be particularly important: enterprise-based training and post-training follow-up (Grierson 1989a).

There are a number of programmes which stress such follow-up, e.g. SDSR/TRUGA in Africa Asia and DESAP in Latin America. Successful follow-up requires careful selection of the business consultants. As well as possessing sufficient theoretical knowledge to be able to analyse the strengths and weaknesses of their clients' enterprises, they must also have an intimate knowledge of the informal sector in the location where their clients are operating. DESAP uses economics graduates with links to the informal sector and provides them with training (Lohmar-Kuhnle 1992). KYTEC on the other hand has used technical instructors from the youth polytechnics (Kivunzyo 1993). It does not appear that there is one "correct" model for such follow-up, and some methods are clearly not cost effective (Grierson 1993). In a number of countries, for instance, a version of follow-up was the extension model by which trained instructors sought to keep in touch with their clients who had come into the rural industrial development centres for some specific assistance. In Kenya and Tanzania such support and follow-up proved to be very expensive and of uncertain value (King 1977). Clearly, to be successful, follow-up provision must reflect very exactly the needs and characteristics of the client and be tailored to the market.

Technology

One limitation of the informal sector that has been frequently identified (e.g. in the traditional apprenticeship literature) is its dependence on outmoded technologies. Many Northern NGOs (e.g. ApT, TFSR and ITDG) have focused on this issue (Jeans, Hyman and O'Donnell 1991). In our examination of support to the Uganda Small Scale Industry Association (USSIA), we saw that technology transfer was a central part of ApT strategy. In this case the diffusion of appropriate technology was through an existing association of informal sector actors. Other approaches have also been tried. In India, as elsewhere, the cost of improved technologies is very great. However, important business families have set up foundations which have "adopted" NGOs in order to facilitate technology transfer (D'Souza and Thomas 1993).

In Kenya, a local NGO, ApproTEC, was established in 1991 and has been funded by the ODA. Its activities include economic feasibility studies; engineering design and development; training of equipment manufacturers; product promotion and dissemination of information; training for entrepreneurs; and consultancy services for other organisations (Oketch 1993). ApproTEC appears to be successful but its scope is limited to technologies it can develop and sell to a clientele of entrepreneurs. Also, in Kenya, Malawi, Zimbabwe and Zambia, VSO and ITDG have been promoting wooden handtools for carpentry, thus underlining the point that what may seem 'outmoded' may well be renewed for specific purposes, in the absence of foreign exchange to get the modern imported versions (Leek et al. 1993). The same point could be made about the absence of low cost, second-hand machine tools in the informal sector, and the legal restrictions on their import (Abuodha and King 1991).

Another variation on the ApproTEC approach which has attracted major international funding and attention is found in Ghana under the Ghana Regional Appropriate Technology Industrial Service (GRATIS). It has been funded by a variety of donors including CIDA, GTZ, ITDG and VSO (Powell 1991; Boeh-Ocansey 1993). It operates through a network of Intermediate Technology Transfer Units (ITTUs). At the beginning of 1993, six ITTUs had been established at regional level, whilst work had begun on units for the other four regions (Powell 1991, Boeh-Ocansey 1993).

An ITTU consists of a group of production workshops where new products and processes of local relevance are demonstrated. Local artisans are then encouraged and assisted to engage in these activities. These artisans are encouraged to establish local associations which will eventually elect management boards for the ITTUs (Boeh-Ocansey 1993). It is expected that the ITTUs will be autonomous and self-financing in the long-run (Powell 1991).

ITTUs also provide technical and managerial advice in a number of craft areas. They liase with educational and research institutions and offer extension services to income generation projects. Selected masters from the traditional apprenticeship system are offered short-term internships as are formal sector trainees. For traditional apprentices, there is the opportunity to be attached to an ITTU for a renewable one year period (Boeh-Ocansey 1993).

Impressive levels of cost recovery are being claimed for these institutions (Powell 1991). The best, at Tema, boasts a 73,7% cost recovery rate (Boeh-Ocansey 1993). It also appears that the majority of the trainees are coming from the informal sector. However, there seem to be significant constraints on post-training performance, especially as a result of inadequate sources of capital (Boeh-Ocansey 1993). Moreover, the ITTUs seem to suffer from a similar problem to production units under Training-with-Production approaches. Instead of supporting informal sector production, there have been complaints that these units are competing with existing artisanal production on highly advantaged terms. GRATIS may be in danger of being another good development idea that has gone wrong.

A further example from Ghana, but this time with a focus on rural income generation, is provided by TechnoServe. In collaboration with various government departments, and with World Bank funding, TechnoServe has developed an Intermediate Technology Small Scale Palm Oil Mills Programme. It is also involved in grain and fisheries processing programmes. TechnoServe realises that new technologies must be accepted by the host communities and so places considerable emphasis on attitudinal preparation for new technology (Boeh-Ocansey 1993).

Two concluding comments might be made on the role of technology within the informal sector. First, there is a great deal more literature available on technologies for the informal sector than there is on technologies in the informal sector. Much more attention should probably be given to the technological dynamic that exists within the specific informal sector context and less to the promotion of stand-alone technologies that are 'appropriate'. Research on the former would indicate significant changes over time, as well as major constraints on technological development (King 1994c). Second, like several of the other key themes in this chapter, the issue of technology and of its promotion goes to the heart of the divide between our subsistence self-employed and the more entrepreneurial levels. As the examples above make clear, there are trade-offs and hard choices to be made; support for more advanced, power machinery for the emergent entrepreneur may have a direct impact on the income and work of those using hand tools in more subsistence modes. This kind of trade-off within a single country can be just as sharp as when the liberalisation of the import of second hand clothes (made through high textile technologies abroad) has a direct impact on the tailors and dressmakers of many developing countries.

Workshops

Expense and legal constraints frequently combine to ensure that informal sector actors lack access to adequate workshop facilities. In Latin America there has been an attempt to overcome this problem through the creation of public workshops. In Costa Rica, INA, the national training agency, established a series of public workshops in the early 1980s (Haan 1989). The centres provide simple tools and equipment which artisans can use for a small fee. The provision of both basic and upgrading training is also a part of the centres' remit. This appears to be a particularly innovative way of providing workshops as well as promoting training and technological diffusion.

The fact that informal sector workers frequently are operating in unsatisfactory workshops, or out in the 'hot sun', does not mean, however, that necessarily they can be helped by the state. Kenya Industrial Estates has sought to address the lack of suitable informal sector workshop spaces and is currently extending its construction of jua-kali sheds to a number of Kenyan cities (Oketch 1993).

However, behind the discussion of workshops there is a much larger issue which accounts for the politicisation of the discussion about them, and that is the question of informal sector access to land and to legal title. Very few governments or local authorities have the capacity to take the very difficult decisions about the location and entitlement of artisans to settle legally in the areas where they can achieve greatest income from their activities (Assuncao 1993).

Marketing

One of the principal constraints facing informal sector actors is their limited access to markets and the limited purchasing power in the markets they can access. We will consider subsequently the legal obstacles faced by informal sector actors in accessing markets and the need to address this issue. A number of strategies have been proposed to overcome other constraints and to maximise market access. Trade fairs designed for informal sector producers and traders would be one way in which their access to wider markets could be promoted (Tolentino and Theocharides 1992). Franchising and the potential of sub-contracting (between large. small and micro-enterprise) are also worth further research and development (Wright 1990; Streeten 1991).

Informal sector organisations, associations and federations can play a central role. These can take the form of small informal groups which engage in practical activities such as joint marketing or the hiring of transport. Strong national associations are important too. One reason why the informal sector tends to be disadvantaged by national planning is that it lacks the effective lobbying mechanisms that the formal sector often possesses.

Associations such as USSIA in Uganda have been assisted in developing their lobbying capability. The potential of such activity should not be underestimated. In Zimbabwe, for example, lobbying by the informal sector has resulted in a government undertaking to reserve a proportion of government contracts for the sector. The development of the institutional capacity of both local or municipal and eventually national organisations of entrepreneurs within the informal sector is an area which often gets less attention from external donors. This is understandable for in countries which are seeking to democratise and develop multi-party systems, the small traders and producers are a potentially very influential body. There is evidence in a number of situations that the government has not looked with favour on the emergence of a national federation of small traders or of informal sector producers.

Macro-Economic Environment

The informal sector has been obstructed by the state in a variety of ways. In many cases, preferential treatment has been given to the formal sector. In the case of Kenya, for example, this has taken the form of import subsidies for medium- and large-scale industries which have allowed them to acquire cheap inputs from outside the country (Chew 1990). Without these subsidies such inputs might well have been sourced from the informal sector which is frequently a major sub-contractor for the formal sector (Abuodha and King 1991).

More generally, however, although national governments appear to have taken more seriously some of the education and training implications of preparation for self-employment, the same is not yet true of many of the major policy shifts that are required in economic, labour market, exchange rate and tax policies. It has been suggested by Assuncao (1993) that this can in part be explained by a resistance to what seems an attack by outside bodies on the notion of the state as the engine for growth and transformation:

As a result, members of the public administration and promotion institutions often see the efforts of international organisations towards the informal sector and urban poor in general as lacking seriousness and just a panacea for weakening the official structures (p. 63).

Legal Framework

The state has also disadvantaged the informal sector through a variety of legislative devices (Harper 1984). In colonial Africa access to land in prime commercial areas was heavily biased against Africans. Too often such legislation has remained in force when it refers to street traders, informal sector industrial estates and markets. This continues to be the case in Southern Africa in particular, where historically it was a complement to apartheid policies. Indeed, this appears to be a major factor in the weakness of the urban informal sector in Southern Africa. 8 In Namibia, which was effectively a colony of South Africa, even whites still are prevented legally from small-scale businesses which might erode demand for South African products.

8 This argument is found in, for example, Swainson (1991), who argues that legal constraints also tend to push informal sector actors towards trading rather than productive activities.

Informal sector actors are also faced with a range of other legal obstacles. Health and safety regulations tend to be devised and interpreted in such a narrow fashion that the informal sector cannot but infringe them. This tends to create a situation where corruption and random harassment by the police and municipal authorities become an occupational hazard of informal sector activity (Hailey 1991).

De Soto (1989) has illustrated this situation admirably. He shows that the bureaucratic system results in excessive periods of delay before informal sector workers can receive the relevant licenses, etc. that, in theory, permit them to trade without harassment.

De Soto is correct to identify such constraints as serious obstacles to the informal sector and there appears to be considerable agreement that such barriers should be reduced.

However, Annis and Franks ( 1989) have argued that there is a danger in an unsophisticated reading of these findings which has found some favour in radical libertarian circles. This reading argues that such legal constraints are the only constraints faced by the informal sector. Untrammelled market forces, in this view, guarantee a dynamic informal sector. This view is clearly too simplistic, however. Reduced legal constraints are important but provide only a partial response to the needs of the informal sector. In any case, de Soto's argument that such regulations have arisen out of the power structures of the Southern state and, in particular, its alliance with big business (de Soto 1989) suggests that reform will be difficult to effect (Hailey 1991).

Pathways to self-employment

We have spent a considerable period of time in the previous chapters examining a number of education and training programmes and projects which have sought to prepare workers for the informal sector. In this chapter we have also considered other relevant forms of intervention. In this section we shall consider a number of potential pathways to self-employment that emerge from these case studies and from the theoretical and policy literature. It is important to reiterate that these are in no way intended to be descriptions of best practice. Rather, they represent common existing routes which derive from empirical work or from the theoretical and policy literature.

In our discussion of the possible forms education for the informal sector does presently (and might) take, we examined the arguments of the various versions of the Vocational School Fallacy. Beginning with Foster in the 1960s and continuing up to the present day in World Bank thinking, there has been a powerful critique of attempts to provide vocational preparation in the school location, if it was expected that that would have an effect on occupation or unemployment. In the World Bank version, this has increasingly been allied to scepticism also regarding the efficacy of post-school training in VTIs (World Bank 1991a).

The pathway to self-employment envisaged by this constituency (including the World Bank) appears to be the following:

MODEL A

At school level, the World Bank has tended to argue that what is needed most is a concentration of effort on getting the basics right (World Bank 1988). Here what is meant is Language, Mathematics and Science, rather than practical subjects of various kinds.

It is further argued, in this model, that post-school training should ideally be done on-the-job. This will help to maximise the fit between the supply and demand of trained labour. However, it is accepted that there will be some cases, particularly in the least developed countries, where some state-sponsored training will be necessary due to the weakness of the industrial sector (World Bank 1991a; Middleton et al. 1993). There is also a stronger place urged for private (proprietary) training. Nonetheless, the World Bank's recent interest in the traditional apprenticeship system of West Africa and the jua-kali system of Kenya suggests an awareness of the possibilities of on-the-job training taking place in the informal sector itself, as well in the formal sector enterprises.

This 'World Bank model' is less explicit about what happens after training. It appears to be assumed that many graduates of both formal and informal sector enterprise based training will become self-employed. However, it is not clear as to whether they will do so immediately after training.

This issue is considered in greater detail by Grierson (1993). His starting point is post-school and his argument may be portrayed as follows:

MODEL B

Grierson argues that enterprise based training is the key to successful preparation for self-employment (Grierson 1989a and 1993). He was solely concerned with informal sector based training and his arguments are more relevant in this context rather than in that of formal sector-based training. Enterprise based training, he argues, provides the package of technical (and other) skills that the worker will require in the world of work. Therefore, implicitly, formal sector training will tend to provide a somewhat different and possibly less appropriate package for self-employment. Clearly, it is also implicitly assumed that VTIs are unlikely to be the best provider of a skills package that is relevant to the world-of-work.

In addition to possessing the skills necessary to produce in the informal sector, Grierson argues that the prospective self-employed also need tools which will allow them to break down the barriers to entry that do exist in the informal sector. Such barriers, Grierson argues are both social and economic (Grierson 1993). As we saw earlier in this report, Grierson argues that social barriers are broken down by the acquisition of social networks by the trainee. Such a process is most likely to occur in the traditional apprenticeship location.

Economic barriers largely refer to the difficulty in raising sufficient capital to establish oneself in viable self-employment. In this model, the answer is not a credit scheme. The potential self-employed worker can raise capital without such interventions, it is argued. Such capital accumulation is likely to take place during a period of wage employment (Grierson 1993). This employment may be in the formal sector or could be as a journeyman in an informal sector workshop. After a period of five or so years the individual will have accumulated sufficient capital, contacts and experience to enter into self-employment. 9 This view is reflected in evidence (e.g. Mead and Kunjeku 1993) that the most successful self-employed artisans are typically those with significant wage employment experience.

9 The length of time taken to accumulate capital, experience and networks is of course dependent upon the trade engaged in. Furthermore, the transition will tend not to be a discrete event. Rather, it is likely that the individual will slowly reduce his/her formal sector commitments in favour of an increasing involvement in the informal sector.

The above pathway appears to be (at least implicitly) a route to entrepreneurial self-employment. Our first model, on the other hand, does not appear to reflect any distinction between different parts of the informal sector.

It is not our intention to overstress a clear-cut division of the informal sector into two discrete sub-sectors. Nonetheless, such a distinction does appear to have greater analytical power than a unitary model. Equally, whilst over-simplistic, it is much more useful as a tool than would be a complex model which attempted to reflect the reality of informal sector heterogeneity with greater accuracy.

In using a binary model of the informal sector we are equally not attempting to argue that some societal groupings are inherently suited to participation in one of these sub-sectors due to certain characteristics they possess. We are not convinced of the validity of crude behaviourist arguments that entrepreneurial characteristics are innate and measurable. Moreover, the evidence from many of the programmes we have examined indicates that the most disadvantaged can be facilitated to achieve more than mere subsistence self-employment. Equally, we are not suggesting that there is no possibility of graduation from subsistence to enterprise self-employment.

However, it appears that there are different pathways which typically lead to subsistence and enterprise self-employment. These are shown below. Model C is that which pertains to subsistence self-employment; Model D to enterprise self-employment.

MODEL C - SUBSISTENCE SELF-EMPLOYMENT

This model points to the stark reality of most people inhabiting the informal sector worldwide. For this population, a complete basic education for all remains rhetoric rather than reality, since they frequently have to leave school before the end of the full cycle. Equally, they lack access to post school training. Traditionally there has been a great shortage of training which focuses on the skills needs of the subsistence self-employment sub-sector. This is true even within the informal sector itself. In West Africa, for example, such activities do not form part of the principal focus of the traditional apprenticeship system. An awareness of this lack of education and training opportunities is why the World Bank (as we saw in Model A) argued in its study of West African apprenticeship that the leading policy recommendation was:

Increased access to basic education. This is critical in assisting wider entry to the microenterprise economy, particularly to the 'more attractive' activities and therefore to a more equitable widening of access to micro-enterprise opportunities (World Bank 1991a: 99).

The focus here is on the 'more attractive', upper tier of the informal sector. Opportunities are even more limited and needs greater when we consider the subsistence end of the informal sector. In outlining this Model C, we are pointing to an existing pathway along which very large numbers of young people travel. They get minimal basic education (and sometimes not even that) and they get eventually into forms of self-employment that require almost no training on the job.

We are aware, of course, that there categories of subsistence self-employed who may have had more schooling and may have acquired considerable dexterity, e.g. in handsome weaving or other skills; but the lack of a market for their products or the competition with many other skilled people have made them survive at a subsistence level.

When we turn to enterprise self-employment, however, there may be a number of paths as shown in the diagram below:

MODEL D - ENTERPRISE SELF-EMPLOYMENT

This diagram illustrates three possible branches on the pathway to enterprise self-employment. It should be viewed more as a description of what experience the entrepreneurial self-employed are likely to have had rather than a prescription of probable career paths from school to self-employment. It assumes that a good basic education is the foundation of most individuals' success in achieving access to enterprise self-employment, although it does not make assumptions about the form and content of the basic cycle. Increasingly, even in the first branch (e.g. traditional apprenticeship), the average education level of entrants appears to be rising (Boeh-Ocansey 1993; Fluitman 1994). As was noted earlier, this does not necessarily reflect an overall increase in educational standards, but could be due to the increased attractiveness of such training to those beyond its traditional constituency.

Of course we are not arguing that all the graduates of a complete general education are likely to follow any of these paths. Inevitably, many of the most able will still follow academic paths leading to secondary and even tertiary education.

As positive attitudes to enterprise continue to develop, however, and as the formal sector in some countries becomes increasingly insecure and unremunerative, so the traditional pathways to formal sector employment are likely to be co-opted for preparation for self employment. Thus, we see that VTIs and formal sector on-the-job training are increasingly becoming pathways to enterprise self-employment.

After training in one of the three branches, we follow Model B in seeing a period of wage employment as an important and often necessary precursor to sustainable enterprise self-employment. It is possible that both training and wage employment will take place in the same firm. Equally, there will often be no clear demarcation between when a young person is considered to be a trainee and when s/he is generally acknowledged to be an employee. In different contexts and for different individuals the time scale involved in the transition from school to self-employment will be very different.

The variety of pathways and their links to education and training

The above models represent a series of views about how individuals currently progress towards self-employment through education and training. One of the important points they seek to illustrate is that education and training are utilised in very different degrees in the paths towards subsistence and enterprise self-employment

These models are of course highly simplified and do not take account of any of the other interventions we considered earlier in this chapter. This is an issue we shall return to subsequently. For the moment we must also address the fact that the models do not tell us enough regarding some of the key debates in the realms of education and training. Hence we briefly now connect our earlier chapters with this discussion about pathways.

Education

It appears axiomatic that a good general education is the foundation on which future training and work experience must build. This is equally true in either the formal sector or the informal sector. Furthermore, our third and fourth models above are differentiated in the first instance by the amount of such education acquired at school level. An improvement in the education provided in Model C will not in itself eradicate bare subsistence level existence for large numbers of informal sector actors. However, it could assist in the transition towards more prosperous self-employment. Therefore, it can be argued that the provision of good quality general education should be a major element in any integrated programme of support for the informal sector.

The exact content of such education is more controversial, however. The World Bank may well be correct in its rejection of vocationalisation in favour of an enhanced emphasis on basic academic skills, at least at the primary level. 10 The arguments of Foster (and the World Bank) may also apply to the very recent attempts to introduce enterprise education within the basic cycle, although it is still too soon to be able to judge such programmes accurately. However, it is at the secondary level that the longstanding traditions and cultures of vocational education are so diverse that it would be inappropriate to force them into a model.

10 There are, nonetheless, examples of successful schools which combine high quality academic and technical education (McGrath 1993). The success of such schooling may be, in part, dependent Upon the relative income and prestige accorded to the trades that they offer preparation for, and these trades' entry requirements.

But what we can say is that in many countries the 'Complete General Education' that we discuss in Model D would increasingly contain more or less substantial elements of orientation to at least one vocational skill, as well as a tendency to stress enterprise and vocation in many of the regular academic subjects.

What might be a useful way of conceptualising this debate is to visualise the education system as a continuum running between academic and vocational:

This view places general education at the centre of the continuum, rather than in an extreme position. However, we are not attempting to prescribe the form that general education should take. That is dependent on specific cultural, economic and institutional contexts. In understanding the meaning of Education in several of our models, we are however pointing to a tendency 'to teach the academic in a more vocational way', but still as part of general education (Sawamura 1994).

Post-School Training

Our four model pathways have left little room for training that is not enterprise based. This appears to be in keeping with the evidence, as well as with some of the current trends in donor and national government thinking. However, we certainly do not wish to suggest that there is no role for such training in preparing for self-employment.

In considering training we must distinguish between different types of providers, operating in different locations and addressing different target groups. There are several such types, but we shall consider the two most significant non-enterprise based forms: VTIs and NGO-training centres.

VTIs

VTIs do appear to have a role in the preparation of some individuals for enterprise self-employment. This is currently being stressed as a direction in which VTIs should increasingly move (ILO 1993). There are certainly success stories here (e.g. MEDI). However, we should not be over-optimistic about the VTI's ability to be a key actor in self-employment preparation. The successful reorientation of the VTI to become responsive to the needs of this new target population may well be beyond the capability of many VTIs and their staff.

NGO-Training Centres

As we have seen, many NGOs provide training which successfully mimics enterprise based training. Such training does not appear problematic in our current context and will not be discussed here. Another strand of NGO training seeks to augment the VTI's provision which is frequently insufficient to satisfy the high levels of demand for training. Such NGO training is open to many of the criticisms of VTI based training. In particular, it is likely to exacerbate the mismatch between the supply and demand of technical skills. However, it can be argued that NGO-organised training is likely on the whole to reflect informal sector realities better than VTI-organised training, principally because it is closer to the recipients of training and more committed to ensure placement at the end of training.

A third focus of NGOs, and one which seems particularly worth considering, is their concern for disadvantaged groups. Models C and D suggest that such disadvantaged groups find their access to enterprise self-employment blocked by their previous failures to access education and training. They are likely to find themselves in low-skill employment contexts where they have little opportunity to acquire explicit training. This can occur either in subsistence self-employment or as casual labour in the formal sector. It is for some of these populations that NGOs are particularly well suited to providing the remedial education and training needed in this situation.

Such NGO training is not just efficacious for facilitating disadvantaged group access to enterprise self-employment, however. It can also enhance individual's income generation capacity at more modest levels. Furthermore, it also helps to provide a second chance to obtain the basic education which too often remains a need rather than a right of the marginalised.

It is possible to show diagramatically the impact of this form of NGO training on the situation we encountered earlier in model C:

MODEL E - NGO TRAINING

As stated above, we are not dealing with all NGOs here. Furthermore, it is the case that different NGOs providing this kind of training do so for different reasons and target groups. Some, for example in the technology and business fields, are more oriented towards the right hand fork of our model. Such NGOs may be characterised as primarily enterprise-oriented. However, there are also a number of NGOs, more commonly in the religious or popular education traditions, which tend towards the left hand fork of our diagram. These NGOs tend to stress their social orientation.

On-the-Job Training in Formal and Informal Firms

Our model pathways also tend to gloss over important issues in the sphere of enterprise-based training. As regards such training in the formal sector, we have already argued that reforms cannot be expected to be targetted at benefitting the informal sector. Nonetheless, it is probable that improved formal sector training will have significant positive effects on the informal sector due to the large degree of movement of people and ideas across porous sectoral boundaries. Though we cannot generalise, some of the trends in in-firm training now emphasise flexible specialisation rather than the very narrow task divisions of earlier decades. This wider skill base can only be of advantage to those who eventually move over to the informal sector.

Enterprise-based training in the informal sector is equally diverse in its manifestations. Even in West Africa, the much discussed traditional apprenticeship model shows variation across trades and regions. Enterprise-based training in the informal sector has been producing large numbers of trained personnel without external intervention and will continue to do so. Nevertheless, there are areas, for example technology, where there is room for improvement. We have examined a number of external attempts at enhancing such training. As elsewhere in this report, no single model of best practice emerges. Rather, what the best of these attempts have in common is an ability to tailor the initiative to the needs and strengths of the existing training system. Cultural sensitivity and an awareness of the technological dynamic within the informal sector is a greater priority here than technical fixes.

Packages

Earlier in this chapter we considered some of the range of other interventions that could assist the education and training dimensions of preparation for the informal sector. We shall now attempt to integrate these with the model pathways we have examined above.

Education and training have certainly a central role to play in preparation for self-employment. and it is entirely appropriate that they should have provided a great deal of the focus for this study, since it is their role in particular that we have been investigating. However, the above pathways have also incorporated in the models the importance of work experience within enterprises. And they clearly also need to signal that the education-and-training pathways are situated within a particular legal and macro-economic framework which very often constrains or supports them.

This is what Model F seeks to indicate on the one hand. And on the other it points up the range of support services which, individually, or as an integrated package, have been considered as relevant bridges and ladders towards a more productive enterprise self-employment.

MODEL F - A PACKAGE OF SUPPORTS FOR ENTERPRISE SELF-EMPLOYMENT

It is at the point of actually engaging in self-employment that other interventions may be best provided. The list of support services in the above model is neither prescriptive nor proscriptive. Nor is there any presumption regarding the organisation of such provision. What we should perhaps underline is that although we have offered a neat package of services, in connection with self-employment, it must certainly be the case that only a very small proportion of the millions of micro-entrepreneurs have received even one of these. Many of these services are much more widely known and discussed in the development literature than they are in the developing countries themselves.

These services are available very selectively in what we must continue to term 'economies of extreme scarcity'. Consequently, unlike basic education and some form of on-the-job-training which are now relatively widespread, we must acknowledge that there is no possibility of discussing the application of even a minimal package of such interventions to the informal sector world-wide. We must also note that in many of the poorest countries, these support services are virtually entirely dependent on donor funding, whether from NGOs, bilateral or multilateral agencies. To that extent, there is uncertainty and unsustainability associated with such provision.

In presenting these various models, we are commenting on some of the most common existing patterns, and we are seeking to give some sense of the necessary specificity of country exemplifications of them. But in rejecting universal generalisations about preparation for the informal sector, however, we are concerned that the opposite danger is also avoided. We are not arguing in favour of an extreme relativist stance in which everything becomes culturally specific. Our Model F points to the necessity of seeking to combine something of what is known about actual pathways towards self-employment with what is currently known about the significance of particular support services.

Thus far it has not been common to put together the literature on education and training pathways with current wisdom on credit, business skill, technology and security of tenure, as we have sought to do in this study. Understandably, therefore, there is still insufficient research that seeks to draw conclusions about the inter-relationships of these two sets of factors, and the ways in which there may be valuable bridges and ladders between education and training experience on the one hand and the provision of support services on the other.

Concluding remarks

We would wish, however, to avoid ending this report in the time-honoured way of suggesting that more research is needed, and return rather to the fundamental reason that education and training for the informal sector has re-emerged on the agendas of many states and of the NGOs and agencies that operate in the developing world. This is basically that for many countries the absence of sufficient well-paid work in government and modern industry and commerce is confronted by a weakening capacity of the state to do very much about that. In this situation, national governments have come to acknowledge what has always been obvious - that the bulk of the working population of developing countries have not depended on government to assist them to survive and develop. They have utilised their own resources, their family labour and informal credit to find new ways to become more productive.

The recent government emphasis on the potential of education and of training to assist this massive exercise in economic self-reliance can be read as a genuine concern to link education and training to the ordinary economy, or it may be seen, more cynically, as transferring some of the responsibility for job-creation and attitude formation to the schools and training centres. We have said enough in this account to illustrate the limitations of any simple vision of schools forming their pupils into young entrepreneurs through mere curricular changes. Indeed, one of the strongest messages to emerge from the study is the time dimension for learning about enterprise. This is true both for early school-leavers as well as for those who continue with education and even enter wage-employment before they turn to their own work. What this really translates into is a different title for this study: Education and training and something else for self-employment. A lot of what we have tried to do is reflect on that something else that experience in many countries points to.

The other message has to be one that stresses the specificity of context, culture and environment. Running throughout this book is a strong sense that countries do have their own cultures of knowledge and skill, and they have many different versions and mixes of these in their schools and training systems. Some of these traditions of work and of enterprise find very uneven expression in the population, from community to community, from men to women, and from rural to urban location. Into these economies of scarcity and differentiation, the gospel of enterprise and self-employment can only be received and adopted in a highly uneven fashion. The vision of a dynamic form of private enterprise for all is clearly a mirage, but in many different situations, a great deal has been learnt about how local traditions and experience of enterprise can be assisted to be more productive.

A last message relates to our broad distinction between subsistence and entrepreneurial self-employment. Even if it has shortcomings, it is valuable for providing a way of interrogating a new project or an intervention in the informal sector. Who are the recipients of this credit programme or this technology initiative? What kind of self-employment. outcome is expected? It may be that in framing this particular research study, Education and training for self-employment, ODA was looking for information on the role of education and training in respect of two of its main aims: poverty alleviation and economic growth. In that event, we hope that our study will go some way to elaborating upon two statements (one concerned with enterprise, the other with subsistence) in the ODA' s most recent Education policy paper (ODA, 1994):

There is evidence that education promotes entrepreneurship at least as powerfully as cultural factors. (1.2.3)

A direct impact on poverty reduction can be achieved through enabling the poor to undertake income-generating activities. To be effective this requires not just training (linked with the availability of initial resources) but the development of literacy skills and others aspects of basic education. (1.4.1.)


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