THE ROLE OF MICRO AND SMALL ENTERPRISES IN REDUCING

YOUTH UNEMPLOYMENT: THE CASE OF MESERAK TVET

COLLEGE GRADUATES IN
ADDIS ABABA CITY ADMINISTRATION

A Thesis Submitted to
The School of Graduate Studies of Addis Ababa University in partial Fulfillment
of the Requirements for the Degree of Master of Arts in Management of
Vocational Education

BY: TESFAYE TEGEGNE

JUNE 2014
ADDIS ABABA, ETHIOPIA

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 Addis Ababa University
School of Graduate Studies
This is to certify that the thesis prepared by Tesfaye Tegegne titled: THE ROLE OF MICRO AND
SMALL ENTERPRISE IN REDUCING YOUTH UNEMPLOYMENT OF TECHNICAL
AND VOCATIONAL EDUCATION GRADUATES IN ADDIS ABABA CITY
ADSMINISTRATION and submitted in partial fulfillment of the requirement for the Degree of
Master of Arts (Management of Vocational Education) with the regulation of the University and
meets the accepted standards with respect to originality and quality.

Signed by the Examining Committee

Examiner_________________________ Signature_____________Date_________________

Examiner_________________________ Signatue_____________Date_________________

Advisor__________________________ Signiture_____________Date_________________

_______________________________________________________
Chair of Department or Graduate Program Coordinator

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 Abstract
The purpose of this study was to assess the role of MSE in reducing youth unemployment, the case of
Meserak TVET college graduates of the last three years (2010-2012) in A. A City Administration.
The major sources of data for the study were 214 graduates, 80 trainers, 1 Dean, 2 entrepreneurial
course instructors, and MSE development head office. The approach used in this research was a
mixed approach which makes the use of both quantitative and qualitative description. To this end,
questionnaire and interview data collection tools were employed. Stratified and Systematic random
sampling techniques were used to select respondents of questionnaires. Thus, the collected data
were tabulated, presented and analyzed by using frequency and percentage distributions. The results
of the study generally revealed that out of the sampled 214 graduates, 73 (34.1%) were unemployed,
88 (41.1%) were employed, while the remaining 53 (24.8%) were self-employed. As the study
revealed, factors causing youth’ unemployment were: Negative social and cultural attitude towards
self-employment, lack of access to start up finance, lack of business assistance and support,
mismatch between jobs available and larger number of new graduates, low economic capacity of the
country to absorb the graduates, lack of guidance and counseling service, unfavorable conditions
from MSE facilitators, weak tie among TVET, Micro Finance Institutions and MSE development
head office were indicated as the major problems. On the other hand, it was identified that the major
constraints that prevented the graduates from creating their own business were: lack of financial
and material resources, lack of work site, unfavorable condition from MSE facilitators, and negative
attitude towards wage employment. Based on the major findings, it could be concluded that the
employment rate of Meserak TVET college graduates is more than the unemployed. Furthermore,
based on the major findings and conclusions, the following recommendations were made: providing
financial support schemes for graduates to encourage self-employment by strengthening the
relationship between TVET institution, MSE sector, and Micro Finance Institution; recognizing
MSE development as the top strategy in reducing youth unemployment; improving career guidance
as a necessary mechanism for helping students to select a marketable field of stud; creating easily
accessible credit, and loan services; and tracing of graduates.

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 Acknowledgments
First of all, I would like to express my deepest gratitude to Ato Girma Zewdie (Associate Professor),
my thesis advisor, whose contribution to my study was highly substantial. I am honored and
privileged to have had him as my thesis advisor.

In addition, I wish to express my heartfelt gratitude to Meserak TVET College Dean, Administration
Officers and Instructors for hosting and providing me with all the necessary support and data for the
research study.

Furthermore, I am really grateful to thank Temesgen Tadele and all my friends who initiated and
supported in furthering my knowledge and education.

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 Table of Contents
Contents Page
ABSTRACT i
ACKNOWLEDGEMENTS ii
TABLE OF CONTENTS iii
LIST OF APPENDICES vi
LIST OF TABLES vii
ACRONYMS viii
CHAPTER ONE: Introduction 1
1.1 Background of the Study .......................................................................................1
1.2 Statement of the Problem .......................................................................................3
1.3 Objectives of the Study ..........................................................................................5
1.3.1 General Objectives ........................................................................................5
1.3.2 Specific Objectives .......................................................................................5
1.4 Delimitation of the Study ......................................................................................5
1.5 Limitations of the study .........................................................................................6
1.6 Significance of the Study ......................................................................................6
1.7 Organization of the Study .....................................................................................7
1.8 Operational Definitions of Key Terms ...................................................................7
CHAPTER TWO: Review of Related Literature ...........................................................8
2.1 Conceptual Framework………………………………………………………………….8
2.1.1 Micro and Small Enterprises (MSEs): What They Are? ....................................... 8
2.1.2 The Role of Micro and Small Enterprises in Poverty Reduction ..........................10
2.1.3 Micro and Small Enterprises (MSEs) and Major Constraints for the Expansion of
MSE in Ethiopia ..................................................................................................13
2.2 The Development of TVET as a means of creating Job Opportunity ............................17
2.2.1 TVET for Self-Employment .......................................................................19
2.2.2 Linkage of TVET to the World of Work and Labor Market Needs .............20
2.2.3 Vocational Education and Training-Meeting the Needs of Labor Market ....23
2.2.4 Employment Service within a Labor Marketing System .............................23

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CHAPTER THREE: Research Design and Methodology..............................................26
3.1 Research Design ..................................................................................................26
3.2 Population and Sample Size ..................................................................................27
3.3 Sampling Techniques/Procedures .........................................................................27
3.4 Source of Data ......................................................................................................28
3.5 Tools of Data Collection .......................................................................................29
3.5.1 Questionnaire ................................................................................................29
3.5.2 Interview .......................................................................................................29
3.6 Pilot Test ...............................................................................................................30
3.7 Method of Data Organization and Analysis ..........................................................30
CHAPTER FOUR: Data Presentation, Analysis and Interpretation ............................31
4.1 Characteristics of the Respondents ............................................................................31
4.2 Graduates Employment Status and Major Employment Organizations ........................35
4.3 Tracer Study in the TVET Institutions ........................................................................36
4.4 Entrepreneurial Environment /Condition .....................................................................39
4.5 Entrepreneurship Course for the Trainees ..................................................................40
4.6 Organizing Graduates in MSEs and the Major Challenges .........................................42
4.7 Loan Provision Services and the major constraints ....................................................44
4.8 Measures taken to be taken to improve Youth Unemployment (Graduates) ............... 46
CHAPTER FIVE: Summary, Conclusions and Recommendations ..............................49
5.1 Summary ....................................................................................................................49
5.1.1 Background Characteristics of the Respondents ................................................49
5.1.2 Tracer Study and Labor Market Demand Study in the TVET College ...............50
5.1.3 Entrepreneurship Courses for Trainees .............................................................50
5.1.4 Organizing Graduates in MSE and Some Major Constraints associated with it..50
5.1.5 Availability of Financial Institutions ..................................................................51
5.1.6 Partnership among TVET, Micro Finance Institutions, MSE and Employing
Organizations .................................................................................................. 51
5.1.7 Problems and Factors Causing Youth unemployment of Meserak TVET Colleges.51
5.2 Conclusions ................................................................................................................52
5.3 Recommendations ........................................................................................................53
References .........................................................................................................................56
Appendices
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List of Appendices
Appendix-A: Questionnaire to be filled by Meserak TVET College graduates who have created their
own business.
Appendix-B: Questionnaire to be filled by Meserak TVET College graduates who have not created
their own business.
Appendix-C: Questionnaire to be filled by Meserak TVET College Trainers (Teachers).
Appendix-D: Interview Guide Questions for Dean of the College.
Appendix-E: Interview Guide Questions for Micro and Small Scale Trade Development Office.
Appendix-F: Interview Guide Questions for Entrepreneurial Course Instructors.

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 List of Tables
Table No. Pages
Table 1: Sample Size and Target Population…………………………………………………27
Table 2: Characteristics of the Respondents………………………………………………….32
Table 3: Employment Status of Meserak TVET College Graduates………………………….35
Table 4: Tracer Study and Its Purpose in the Institution ……………………………………..37
Table 5: Entrepreneurial Environment/Condition…………………………………………….39
Table 6: Entrepreneurship Training in the Institutions……………………………………….40
Table 7: Organizing Graduates in MSEs and Major Challenges……………………………...42
Table 8: Access of Loan Provision Services and the Major Constraints ……………………..44
Table 9: Measures to be taken to improve Graduates/Youth unemployment…………………46

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 Acronyms
TVET Technical and Vocational Education and Training
ILO International Labor Organizations
ETP Education and Training Policy of Ethiopia
MOE Ministry of Education
PASDEP Plan for Accelerated and Sustainable Development to End Poverty
MSE Micro and Small Enterprise
UNHCR United Nations Higher Commission for Human Rights
LDCs Least Developing Countries
SED Small Enterprise Development
NGOs Non-Government Organizations
HLCLEP High Level Commission on Legal Empowerment of the Poor
CSA Central Statistical Agency
MTI Ministry of Trade and Industry
UNIDO United Nations Industrial Development Organizations
PRSs Poverty Reduction Strategies
OJT On-the-Job Training
LMIS Labor Market Information System
IFPRI International Food Policy Research Institute

viii3
 CHAPTER ONE
1. Introduction
1.1. Background of the Study
Education is acknowledged as a means for transforming and empowering communities. The youth
gain skills, knowledge and attitudes that enable them become productive members of the society
(Economic Recovery Strategy Programme, 2003).According to Kocsev. (2010), on the whole,
“education plays a very important and central role in the country’s transformation strategy”. This
view shows that education is basic tool for change and development of a country or a nation.
Whenever a development strategy is designed on a National level, the role of education should be
considered as a key factor to achieve the intended change.

Globally, youth represents 25 percent of the world’s working age population. They constitute the
future promise and development of every nation. They represent its political leaders, tradesmen,
academics, doctors, innovators and artists. Moreover, youth represent a country or region’s future
growth, health and prosperity. In order to fully activate this source of human capital, policy-makers
must understand the diverse nature of youth as a heterogeneous population with wide ranging skills,
challenges, and belief system (World Bank, 2007).

This global issue of youth labor force is the sum of employed and unemployed youth worldwide.
This force grew from 602 to 633 million between 1995 and 2005 and is projected to grow to 657
million by 2015. However, because the youth population grew at a quicker pace than youth
employment, the share of youth who are employed decreased overall from 51.6 to 47.3 percent
between 1995 and 2005. In fact, unemployed youth make up almost half of the world’s total
unemployed. Despite the fact that youth are only 25 percent of the total working age population.
Compared to adults, the youth of today are about three times as likely to be unemployed (ILO,
2006).

Unemployment is the most important measure of the labor market difficulties of young people. The
effects of prolonged unemployment early in person’s working life are well documented: it may
permanently impair his or her productive potential and therefore employment opportunities can lead

1
to serious social adjustment difficulties. In the context of Sub-Saharan Africa, whether a young
person has a job can often determine which side of the poverty line household lies. Youth
unemployment is included as an indicator for monitoring Millennium Development Goal to
“develop and implement strategies for decent and productive work for youth”.

It is in this conviction that Vocational Education and Training have become one of the major pillars
adopted by the Ethiopian authorities to try and improve the youth employment situation. In view of
this, UNESCO (1979: 9) stated that political leaders, economic planners and educators in many
countries appear to consider the development of Technical and Vocational Education as the keystone
of an educational system that can be adapted to the needs of individual in a society in which he or
she lives.

Technical and Vocational Education is fundamental to the world of work. For most people, work is
the desired outcome of their education and it is through their work that people achieve self-
fulfillment. Lasonen and Burge (1991) explained that one of the major issues relating to the world of
work where TVET has played a major role in providing solutions is the question of what changes
should be made to school curricula at all levels so that young people are more work-oriented and
have the basic skills needed for productive work. According to UNESCO (2010:1), the chief
function and purpose of vocational training are to prepare each individual for profitable socially
useful employment. Because of this, much effort is given to expand TVET in different sectors of
society. As a result, many opportunities are opening for the students and trainees of TVET. In light
of this, UNESCO’s (2010:1) report viewed the role of TVET as follows:

TVET is concerned with; the acquisition of knowledge and skills for the world of work to increase
opportunities for productive work, sustainable livelihoods, personal empowerment and socio-
economic development for both women and men, in both urban and rural communities. A quality of
TVET program plays an essential role in promoting a country’s economic growth and contributing
poverty reduction as well as insuring the social and economic inclusion of marginalized community.
UNESCO views TVET as the master key to poverty alleviation and social cohesion and as central to
the promotion of sustainable development.

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With regard to the Ethiopian TVET program, as part of the 1994 Education and Training Policy of
Ethiopia (ETP), it is intended to play crucial role in producing human capital contributing to the
economic development. The Ethiopian TVET qualification framework (MOE, 2010: 11) also
explained that the reformed TVET system is to be wage and self-employment-oriented, demand
driven and outcome-based, and thus appropriate to the development needs of the Ethiopian
economy.

In this regard, TVET graduates career options, having acquired the necessary skills at institutions,
are either wage employment or self-employment ventures, in which both are important that the
former is to feed industry with the required skilled manpower and the later to create employment
opportunities through starting micro and small business. In view of this, the Plan for Accelerated and
Sustainable Development to end Poverty (PASDEP) assumed that TVET program to offer “…
relevant and demand-driven training that corresponds to the needs of economic and social sectors for
employment and self-employment” (MOE, 2008:8). Self-employment, therefore, is considered as an
alternative occupational choice to TVET graduates. This option is obviously achieved through
starting Micro and Small Enterprise (MSE) ventures which is considered to be the basis for
economic development and betterment of livelihood of citizens. And research findings revealed that
there is a growing realization about the promotion and development of MSEs as they are important
vehicles to address the challenges of unemployment, economic growth and equity in the country.

Although a number of researchers carried out and are still going onto look for the solutions of job
opportunities in Ethiopia, the problems relating to access to decent employment of TVET graduates’
is the one which is not fully addressed. Considering the above problems and contributing factors,
this study was designed to assess the role of MSE in reducing youth unemployment of TVET
graduates in Addis Ababa city administration. It is at this point that the need of job-oriented training,
well integration among MSE development, TVET institutions and Micro finances and coordinated
effort of various bodies comes to its highest relevant.

1.2. Statement of the Problem

 Aiming to alleviate the problem of youth unemployment in Ethiopia, Technical and
Vocational Education and Training (TVET) system can serve as indispensable instrument as
3
 they produce graduates with the competence required to ensure smooth entry into the labor
force and when there is narrow gap between the availability and demand for different skills
in different sector of the economy (ILO, 1997).
 With the above assumption, TVET institutions have been expanded significantly than ever.
Despite this, there are still problems which need to be addressed. Among these problems,
high unemployment rate of TVET graduates is considered to be the significant issue which
requires massive emphasis. The major problems causing unemployment of TVET graduates
are social and cultural attitude towards self-employment, inadequacy of entrepreneurship
education in the institution, lack of access to start up finance, poor administrative and
regulatory frame work, lack of business assistance, work site, placement service and material
resources, inadequacy of guidance and counseling service (Bedada, 2010).
 In order to reduce the unemployment of TVET graduates, Micro and Small Enterprises play
a great role. However, as there is a gap which needs to be addressed by MSEs, a significant
number of TVET graduates are found to be unemployed. In addition to this, many MSEs face
critical constraints (lack of access to finance, premise, infrastructure, entrepreneurial
training, confidence to run business and lack of information on business opportunities),
TVET graduates are not creating their own venture; rather they look for wage employment.
Therefore, the roles of MSEs in reducing youth unemployment of TVET graduates have to
be revealed.
 The partnership among TVET, micro finance institutions, MSE development head office and
employing organizations is not closely linked. As a result, the institution do not fully
determine the fields of studies that the institution should provide so that the trainees can get
better opportunity in the labor market and become successful to get job in government or
private organizations. Thus, there is a demand to create a strong linkage among different
concerned bodies to mitigate the problem of unemployment.
 Entrepreneurship courses have been given to TVET trainees but not adequate enough to help
the graduates in creating their own business. Lack of appropriate entrepreneurial skills,
graduates’ background information regarding entrepreneurship education and inadequate
time given for the course are considered to be the major causes. Hence, Entrepreneurial
training, needs to be revised and be given adequate time.
 This study further investigates the following basic research questions:-
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 1. To what extent does MSE development reduces youth unemployment of Meserak TVET
College graduates?
2. What are the major constraints preventing Meserak TVET College graduates from
engaging under MSE?
3. To what extent do MSE development office, TVET institutions and Micro finances work
together?
4. What are the major causes of youth unemployment of Meserak TVET graduates?

1.3. Objectives of the Study

1.3.1. General Objective
The general objective of this study was to assess the Role of Micro and Small Enterprises in
Reducing Youth Unemployment of Technical and Vocational Education and Training College
graduates found in Yeka Sub city in Addis Ababa City Administration.

1.3.2. The Specific Objectives of the Study include:

1 .To reveals the role of MSE in reducing youth unemployment of TVET College graduates.
2. To identify the major constraints preventing TVET graduates from starting their own business
3. To examine the contributions made by different responsible bodies in promoting MSE
development in relation to key strategic TVET program.
4. To assess the major causes of youth unemployment of Meserak TVET College graduates.

1.4. Delimitation of the Study

This study was delimited to Meserak TVET College found in Addis Ababa City Administration. As
the research was aimed at assessing the role of MSE in reducing youth unemployment of TVET
graduates, the target population of the study will be on the last three years (2010-2012) graduates of
the regular (day) TVET program. Since it is an aspect of tracer study, the study focused on assessing
the role of MSE in reducing youth unemployment of TVET graduates’. Other aspects of the
graduates' status such as job satisfaction of TVET graduates and wider geographical areas that
include all TVET graduates will not found in this study. Rather, to make the study manageable and
workable size, it will be conducted focusing on carefully selected topics.

5
Concerning the sample size, from the total population of regular and extension program graduates, it
will be assumed to be 10% of the total population included due to limitation of resources. As far as
geographical area is concerned, although the graduates of TVET Colleges are expected to be
dispersed all over the Regions, the geographical coverage of the study was confined to Addis Ababa
City Administration. Thus, the number of the graduates who work outside the city administration
was insignificant because of the resource limitation. When approaching the graduates using
telephone address, it would not be geographically limited.

1.5. Limitations of the Study

The serious challenge the researcher faced was obtaining the address of the selected respondents
according to the telephone address that they left after graduation. Some of them change their address
or did not respond. Thus, an attempt was made to get some of them through snow ball method, i.e.,
searching them through asking friends who knew where they could be found. Snow ball sampling is
often used to find and recruit “hidden populations”, that is, groups not easily accessible to
researchers through other sampling strategies. All these made the collection of the data very
difficult, tiresome and time consuming. However, the researcher believes that the study has been
done to an acceptable level.

1.6. Significance of the Study

Attempting to conduct tracer studies and assessing the role of MSE in reducing youth
unemployment of TVET graduates will have the following significance:
1. It may assist the training institutions to create close relationship with MSE development
office, Micro finance and other concerned bodies.
2. It may also allow teachers and training institutions to know their contribution to the career of
the graduates, quality training provision they have been offering, the methods of teaching-
learning they have been employing, and the provision of KAB in general;
3. It may help government and private agencies which are working on MSE development may
use the outcome of the study to improve the provision of resources so that motivate them for
innovative business ideas and entrepreneurial growth and as a result, increase productivity
that largely contribute to the economy.

6
 4. It would also assist governmental and non-governmental organizations working in the area of
job opportunity, especially those who are working as MSE facilitators, to provide essential
supports for graduates of TVET, to start their own business or hired for wage.
5. Lastly, it might be used as a source of information for other researchers that are interested in
the area.

1.7. Organization of the Study

This study has five chapters. The first chapter; deals with introduction, statement of the problem,
significance of the study, delimitation of the study, Limitation of the study and definition of
operational terms in the study. The second chapter addresses the review of related literature to the
topic of the study. The third chapter deals with the research design and methodology, sources of
data, population and sampling technique, and tools of data collection. Chapter four deals with data
presentation, analysis and interpretation. Chapter five addresses Summary, Conclusions and
Recommendations of the study and references are included.

1.8. Operational Definitions of key Terms

The following terms are defined in the sense they are used in the study:-
 Technical and Vocational Education and Training: - refers to an education and training to
“acquire the practical skills, know-how and understanding necessary for employment in a
particular occupation, trade or group of occupations or trades.
 Graduates: - are those who successfully completed the training offered by TVET and
awarded certificate or diploma of the college.
 Micro and Small Enterprise: - are those business enterprises, in the formal and informal
sector, with paid up capital not exceeding Birr 20,000 and excluding consultancy firms and
other establishments.
 Youth:-“Youth” is best understood as a period of transition from the dependence of
childhood to adulthood’s independence and awareness of our interdependence as members of
a community.

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 CHAPTER TWO
2. Review of Related Literature
People, especially in the developing parts of the world, establish and run MSEs mainly to earn
income and consequently bear up poverty, which can be explained in both income and non-income
based aspects. Although people’s ultimate goal in undertaking any livelihood activity is to escape
poverty by enhancing their status of wellbeing, there are also circumstances on which they become
more destitute. This reality clearly exposes the dynamic, multifaceted and complex nature of
poverty. On the other hand, similarly, livelihoods, which are composed of assets (including both
material and social resources), capabilities and activities required for a means of living(in this case
being engaged in MSEs activities) and their outcomes are dynamic too ;and are constrained or
supported by policy, institutional, structural, environmental and owner related (personal) factors. In
the following sections of this chapter, therefore, an attempt will be made to discuss what Micro and
Small Enterprises are, and the nexus between them (reviewing the poverty reduction role of MSEs)
by critically examining empirical evidences of many developing countries including Ethiopia.
Lastly, a detailed discussion of the analytical framework will follow.

2.1. Conceptual Framework

2.1.1. Micro and Small Enterprises (MSEs): What They Are
An enterprise is defined as small scale if it satisfies any two of the following three criteria, that is, it
has a capital investment of Birr 13,000 – 357, 500, employing 5 - 20 people and with a turnover of
up to Birr 715,000 (using 1992 official exchange rate).The same authors narrated that some of the
key characteristics of small enterprises are mobilizing funds which otherwise would have been idle;
being a seed-bed for indigenous entrepreneurship; their labor intensiveness; employing more labor
per unit of capital than large enterprises; promoting indigenous technological know-how; using
mainly local resources, thus have less foreign exchange requirements; catering for the needs of the
poor and; adapting easily to customer requirements (flexible specialization). On the other hand, the
above stated research indicated that SMEs in Ghana and Malawi can be broadly categorized into
urban and rural enterprises, where the former can be further divided into `organized’ and
`unorganized’ enterprises. The organized ones tend to have paid employees with a registered office
whereas the unorganized category is mainly made up of artisans who work in open spaces,

8
temporary wooden structures, or at home and employ little or in some cases no salaried workers.
They rely mostly on family members or apprentices. Rural enterprises are largely made up of family
groups, individual artisans, women engaged in food production from local crops.

In Kenya, by referring the 1999 MSE National Baseline Survey, Ronge et al (2002) defined
MSEs as those non-primary enterprises (excluding agricultural production, animal husbandry,
fishing, hunting, gathering and forestry), whether in the formal or informal sector which employ 1-
50 people. More specifically, according to them, micro-enterprises are those that employ 10 or fewer
workers and small-scale enterprises are those that employ 11-50 workers. The same study argued
that the above definitions are based on one of the three criteria mainly used in literature to define
MSEs-number of employees. The second criterion relies solely on the degree of legal formality and
is mainly used to distinguish between the formal and informal sectors. According to this criterion,
MSEs are those enterprises that are not registered and do not comply with the legal obligations
concerning safety, taxes and labor laws. The last criterion defines MSEs by their limited amounts of
capital and skills per worker. The above-indicated writers emphasized highlighted that the degree of
informality and size of employment have perhaps been the two most readily accepted criteria on
which classification of MSEs is based; and lastly they claimed that the term MSE incorporates firms
in both the formal and informal sectors.

In the case of Ethiopia, there is lack of uniform definition at the national level to have a common
understanding of the MSE sector. While the definition by Ministry of Trade and Industry (MTI) uses
capital investment, the Central Statistical Agency (CSA) uses employment and favors capital
intensive technologies as a yardstick. The definition used by MTI, which uses capital investment as
a yardstick, has been developed for formulating micro and small enterprise development strategy in
1997. According to the MTI, Micro enterprises are those businesses enterprises, in the formal and
informal sector, with a paid up capital not exceeding Birr 20,000 and excluding high tech
consultancy firms and other high tech establishments. Small enterprises are those business
enterprises with a paid up capital of above Birr 20,000 and not exceeding Birr 500,000 and
excluding high tech consultancy firms and other high tech establishments. On the other hand, CSA
categorizes enterprises into different scales of operation on the size of employment and the nature of
equipment. To CSA, establishments employing less than ten persons and using motor operated
9
equipment are considered as small scale manufacturing enterprises. Enterprises in the micro
enterprise category are subdivided into informal sector operations and cottage industries: Cottage
and handicraft industries are those establishments performing their activities by hand and using non-
power driven machines whereas the informal sector is defined as household type establishments or
activities, which are non-registered companies and cooperatives operating with less than 10 persons.
All enterprises employing ten or more workers are grossly considered as medium and large
enterprises (CSA: 1999b and 2000 cited in Tegegne and Meheret: 2010; MTI: 1997).

Operators working on MSEs in Addis Ababa, like everywhere in Ethiopia, are engaged in different
activities. The document prepared by the AACMSEDA entitled ‘Inception Report on Micro and
Small Enterprise Development in Addis Ababa’ (2011) reveals that, due to their high employment
creation capability, existence of ample market, short period of return on investment, local raw
material utilization, and higher role in poverty reduction, six sectors are selected for intervention.
These are Garment and Textile, Metal and Wood Work, Dry Food Preparation, Construction,
Municipal Services, and Urban Agriculture. Almost a year before, Cobblestone Work is added to the
list. From these, those cooperative associations working in the metal and wood work sector and their
operators are targets of this research.

2.1.2. The Role of Micro and Small Enterprises in Poverty Reduction

By now it is clear and agreeable that poverty, both in urban or rural areas, is all about lack of basic
needs, low or inadequate level of income and consumption, poor command over resources, and high
level of social exclusion, inequality and vulnerability. In other words, by generating larger volumes
of employment as well as higher levels of income, the SMEs will not only have contributed towards
poverty reduction, but they will also have enhanced the welfare and standard of living of the many
in the society (Mukras,2003).

As shown above, central to the problem of poverty is the availability of work. Work, secured either
as owner or employee in MSEs, allows people to produce for themselves (i.e. food) and earn the
money needed to buy goods and services. It is also from work that wealth is created which, through
taxation, allows governments to fund pro-poor services such as health care, clean water and
education (Vandenberg, 2006).
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Moreover, http://www.ec.europa.eu/enterprise,enterprisepolicy,smedefinition/smeuserguide cited in
Tegegne and Meheret, 2010:18), current international thinking is also in tune with a view that
acknowledges SMEs as a tool to fight poverty in the long run. The United Nations Industrial
Development Organization’s (UNIDO) approach to this is worth mentioning here:

Poverty reduction is simply not going to happen by government fiat but only through private
sector dynamism”. The evidence directly linking SMEs and poverty reduction is considerably
less robust than that linking them to economic vitality, even in the most developed economies.
There are suggestions of greater employment opportunities for poor, low skilled workers,
increased skills development, and broader social impacts. The movement to support MSE
development internationally reflects a return to promoting poverty reduction by investing in
private sector-driven strategies by all of the major multilateral agencies. Poverty Reduction
Strategies (PRSs) currently being formulated in many developing countries places a more
pronounced emphasis on the contribution that the private sector will have to make – compared
to the over-reliance on the social agenda that characterized earlier PRSs.3.

In conformity with the above view advanced by UNIDO and as an organization concerned to the
condition of labor, the ILO’s approach to poverty reduction through small enterprise development is
based on the promotion of the four elements of decent work, namely, productive, remunerative
employment; rights at work; social dialogue; and social security. This strategy focuses on the needs
of poor people who are part of the micro and small enterprise economy, as owner/operators and
workers, as their dependents, as the unemployed who may benefit from job creation, and as
customers. While further consolidating the above-shown approach, Vandenberg(2006) suggested
that the ILO’s existing strategy for poverty reduction through small enterprises must emphasize the
fact that Small enterprises make a positive contribution to poverty reduction when they provide
employment, adequate levels of job quality, and low-cost goods and services used by the poor;
entrepreneurship, combined with productivity increase, is a key ingredient for poverty reduction
through small enterprise development; and vibrant enterprises, competitive markets and a fair
globalization can make a significant impact on poverty reduction.(Retrieved from
http://www.un.org/ecosoc/docs/stats/UNIDO.pdf on April 15, 2001:19.)

11
Nevertheless, there are two polarized thoughts, according to Agyapong (2010), in relation to the role
and contribution of MSE to economic growth and poverty reduction: the Anti-MSEs and Pro-MSEs.
At the very onset, the Anti-MSEs are skeptical about the efficacy of MSEs in promoting growth and
reducing poverty. They argue that MSEs may not exploit economies of scale; their productivity is
minimal as they rarely undertake the fixed costs associated with research and development. In line
with these shortcomings and pessimism, Admassie and Matambalya (2002), for instance, concluded
that high level of technical inefficiency, which reduce their potential output levels significantly,
characterize the Tanzanian SMEs. The Anti-MSEs strongly oppose such an argument that small
businesses are more labor intensive and are better at creating jobs than large firms. Furthermore,
they hold a view that the net job creation of MSEs is not necessarily significant and frequently lower
than for larger enterprises as the majority level of job creation is accounted by large enterprises.
Those employed in larger enterprises, unlike those engaged and absorbed in MSEs, are offered
better jobs in terms of wages, benefits, working conditions, opportunities for skill enhancement, and
job security.(Biggs,2002; Hallberg,2001 cited in Agyapong 2010, Brown et al. and Rosenywig cited
in Tegegne and Meheret (2010)). To sum up, proponents of this thought strongly question the role
played by MSEs to minimize the incidence of high level poverty in most developing economies
through employment creation, income generation and multiplier effects on other sectors of the
economy.

On the other extreme, the Pro-MSEs, whose stand and arguments are also shared by national
governments of the global south, donor countries and development agencies, are of a view that
MSEs facilitate economic growth and help to reduce the high poverty level widely experienced by
the majority of the countries of the developing world. The Pro-MSEs have argued that MSEs Speed
up competition and enhance entrepreneurship and thus have economy wide benefits in efficiency,
innovation and productivity growth. Thus direct government support of MSEs can help countries
reap social benefits. Second, MSMEs are generally more productive than large firms but are
impeded in their development by failures of financial markets and other institutions for capital and
other non-financial assistances. Thus, pending financial and institutional improvements, direct
government support of MSEs can boost economic growth and development. Finally, the growth of
MSEs boosts employment more than the growth of large firms because MSEs are more labor
intensive. So subsidizing MSEs may help reduce poverty.
12
Equally, the same writer concluded that provision of micro finance, through the resultant micro
enterprises, allows significant improvements in quality of life for the micro entrepreneurs of least
developed countries around the world by stabilizing the cash flow of their economic activity and
bringing security to the enterprise. To him, this allows them to better manage spending, which often
generates savings; and this provides better standards of living to their family, and dependents in
terms of housing, nutrition, health and education. Similarly, by reviewing numerous case studies and
empirical work on the changing role of MSEs in the development process and the access of MSEs to
formal and informal finance including microfinance, Green et al (2006) attested that a dynamic and
growing sector of MSEs can contribute to the realization of a wide range of development objectives
such as the attainment of income distribution and poverty reduction, employment generation,
mobilization of savings and production of goods and services that satisfy the basic needs of the poor.
They further argued that, by citing the World Bank (2001b), that improving the access of the poor to
financial services enables these agents to build up productive assets and enhance their productivity
and potential for sustainable livelihoods.

2.1.3. Micro and Small Enterprises (MSEs) and Major Constraints for the
Expansion of MSE in Ethiopia
According to Tendayi, Scelo, and Raymond (2009), Micro and Small Enterprise (MSEs)
development has in recent years gained attention in development discourse as a priority area crucial
for stimulating growth both in the developed and the developing world. In Ethiopia, the micro and
small enterprises sector in general remained neglected for a long period until a shift was made to a
market led economic system. As enshrined in the PASDEP and the TVET strategy document, SMEs
have been defined as one of the key economic engines for eradicating chronic poverty. Central to the
promotion of SMEs, has been the development and the expansion of vocational education and
training centers throughout Ethiopia. In spite of this, we argue that SME development and poverty
alleviation requires approaches that go beyond the mere expansion and development of vocational
education and training institutions.

Moreover, the current Ethiopian government recognized the contribution of informal sectors. It has
recognized end paid due attention to the promotion and development of MSE, for they are important
vehicles to address the challenges of unemployment, economic growth and equity in the country. To
13
this effect, it has formulated a National MSE Development and Promotion Strategy in 1997, which
enlightens a systematic approach to alleviate the problems and promote the growth of MSE’s. The
overall objective e of the strategy is:

To create an enabling environment for MSEs, with specific objectives to facilitate economic
growth; bring equitable development; create long-term jobs; strengthen the cooperation
between MSEs; provide the basis for medium and large-scale enterprises; promote export;
balance preferential treatment between MSEs and bigger enterprises.

Small firms have always played every important role in employment and production, both in
developed and developing countries. According to Elenice and Caillods (1987), small firms appear
to have the advantages of:
 Being very labor-intensive in that they employ a large proportion of the labor force and
could play an even more important part in employment, particularly in developing countries;
 Using little equipment and few sophisticated machines ,while elaborating and adapting
technologies and management methods appropriate to their needs;
 Producing goods for the less-favored sections of the population but also producing parts or
intermediary goods for large firms;
 Offering employment opportunities to school leavers;
 Making it possible for them to learn total rather than piecemeal job components ; and
 Constituting reserve of skilled and semi-skilled workers

In face of the worsening economic crisis and employment problems, which affect above all the
modern sector and large firms, small firms are more and more being looked up on as a source of job
creation, providing some solutions to the problems of unemployment. Training institutions the world
over are being asked to pay more attention to the requirements of small business because of the fact
that MSEs are an essential part of our future economic prosperity by reducing unrest and social
tension and fighting poverty.

As far as the challenges for the Expansion of MSEs in Ethiopia is concerned, most MSEs face
critical constraints both at the operation and start up level. Some of these constraints include lack of
14
access to finance, lack of access to premise, lack of infrastructure, lack of training in entrepreneurial
and management skills, lack of information on business opportunities, social and cultural facts, in
particular deficient entrepreneurial culture and excessive corruption. According to (HLCLEP, 2006),
the following constraints have been observed in MSEs:
 Lack of clear and pragmatic national policy to enhance the development of MSEs- Despite
the strategies such as the above mentioned and other rules and regulations that are in vigor
in theory, most interventionist policies regarding MSEs are in appropriate and impractical.
For instance, most government policies have a tendency to over regulate and limit the
growth of private sector enterprises and they are over bureaucratized and unfriendly to
support small businesses.
 Lack of access to capital and credit-lack of adequate investment capital, lack of sufficient
loan, and inefficient financial market in terms of facilitating financial resources to
entrepreneurs are the major obstacles in doing business, particularly in the informal sector.
Most micro and small enterprises are highly risky ventures involving excessive
administrative costs and lack of the experience in dealing with financial institutions and do
not have a track record of credit worthiness with banks. Since credit, most MSEs are unable
to secure collateral requirements. As a result of absence in financing, the creation of new
enterprises and the growth and survival of existing ones will be impeded. Access to finance
is a major bottleneck for the rapid growth and development of MSEs mainly due to targeted
mechanism put in place to address the financial needs of small scale enterprises. Most micro
and small enterprises do not have access to micro finance institutions and most banks are
reluctant to avail credit facility to small enterprises unless they have acceptable collateral.
The standard of loan appraisal, the long delay the banks takes to sanction loans, unfavorable
disposition towards small loans and the limited collateral requirement, which is over 100%
of the loan amount, are the major obstacles that small scale enterprises are facing at present.
 Lack of premise and land-for MSEs, lack of premise is unquestionably a serious problem.
Most informal operators do not get access to suitable locations where they can get easy
access to markets. The issue of acquisition and transaction cost has become very prohibitive
to the emergence of new enterprises and to the growth and survival of existing ones. The
issue of land provision and the land lease system has greatly constrained the chance of
micro, small and medium enterprises who aspire to startup businesses.
15
 Lack of entrepreneurial, managerial and other skill - there is general lack of knowledge
entrepreneurial and managerial capacity and marketing experience. Lack of skilled labor,
which in turn leads to problems in production due to the unfamiliarity of workers with rapid
changing technology, lack of coordination of production process, and inability to
troubleshoot failures on machinery and/or equipment’s is a critical problem that MSEs are
facing since they cannot afford to employ specialists in fields of planning, finance and
administration, quality control, and those with technical knowledge. Moreover, MSE’s lack
resources required for research and development and there are inadequate technical and
entrepreneurial skills.
 Socio-cultural constraints- the following socio-cultural problems are considered affecting
the development of MSEs in Ethiopia:
 Lack of enterprise culture in the country, which required a drastic change;
 Considered lack of positive attitude in the country;
 Excessive corruption, which actually constrain private enterprise.
 Lack of formal or informal linkages or business cooperation amongst enterprises- the other
factor that hinders growth and expansion of MSEs is the effectiveness with which they
interact with large or similar firms. In other words, formal and informal linkages or business
cooperation though networking are not common.

Altogether, the discussion carried out clearly indicates that the current growth and expansion
of MSEs have been facing a number challenges that in turn made our TVET graduates’
looking into wage employment. Besides, lack of friendly environment from MSE facilitators
and inadequate involvement of the government to organize the graduates in MSE will have
its own impact on the graduates’ employment status. Graduates’ unemployment problems is
not only confined to MSE facilitators but also it includes inadequate guidance and
counseling service, public poor perception towards TVET program, lack of conducting tracer
and labor market study, weak linkage between TVET institution and employing
organizations, inadequate support services provided by TVET institutions etc. are the major
factors influencing the employment status of TVET graduates.

16
 2.2. The Development of TVET as a Means of Job Opportunity
Vocational education is as old as mankind hence its origin began when man started to live together
and produce for his basic needs. Early man practiced a vocation when he wanted in the forest,
caught fish in the streams or dig in the ground for roots. The primitive people probably used the
digging stick, stone, axes and fire while since he was performing tasks essential to living. Hence
vocation is what a person does to gain a living for survival; it required the early man that he teaches
his son and daughters to perform the tasks necessary to provide food, clothing and shelter.
Hence, the transmission of the family heritage was no longer a satisfactory educational program of
workers in the new generated occupation and the time of on-the-job training (OJT) comes to
existence. OJT has the advantage of strongly motivating the trainee to learn since it is not in the
artificial situation of a classroom. Its success depends almost entirely up on the immediate
supervisor (Flippo, 1984: 200).

According to Evans (as cited in Girma, 2006: 2), OJT has always been haphazard hence the new
worker observes practices, learns by trial and error and occasionally receives direct instruction. If
those experienced worker threatened by the potential completion, there is no guarantee the new
worker will learn only a portion of what is practiced in a particular place of employment at a certain
time. Due to these shortcomings and technological change, the era of apprenticeship appears.

Vocational apprenticeship is a system of training which has traditionally been prevalent or is at

present in course of being introduced in a number of countries. One of the most striking features of
traditional apprenticeship is precisely its role as a transitional stage between the period of education
and training and the period of active life. The apprentice belongs to two worlds at the same time: it
receives training and provides productive labor; he is employed in an enterprise has goes to
educational establishment: he receives pay but it is appreciably less than the wages drawn by his
unskilled fellow-worker of the same age (Gretler, 1972: 13-14).

Against the opportunity does TVET have in all walks of human life, for many years, Technical and
Vocational Education in many African countries has been considered as a career path for the less
academically endowed. This perception has been fuelled by the low academic requirements for
admission into TVET programmes and the limited prospects for further education and professional
17
development. Worse, the impression is sometimes created by governments that the primary
objective of the vocational education track is to keep dropouts and “lockouts” from the basic and
secondary school system of the streets, rather than project this type of training as an effective
strategy to train skilled workers for the employment market. The term “lockouts” refers to students
who are unable to move up the educational ladder, not because of poor grades but because of lack of
places at the higher level. (http://WWW.arrforum.org).

According to (MOE, 2008), in Ethiopia, as many African countries, TVET suffers from relatively
poor public image. TVET usually associated with low status job, low salary and lack of personnel
development opportunities, partly due to low quality of previous TVET programmes that did not
allow TVET graduates to successfully compete in the labor market. TVET is generally perceived as
a place of last resort for these students who failed to get into higher education. This misconception
needs to be rectified otherwise, it will be resulted in influencing the graduates’ attitude towards
TVET program that in turn influence the employment status of the graduates.

Therefore, TVET authorities together with their stakeholders, in particular business organizations,
will invest in public awareness campaigns to make the involved stakeholders and general public
aware that the TVET system is now on its way to facilitate high quality TVET programmes and
occupational qualifications based on the needs of the labor market; open to all target groups in both
urban and rural areas; and with clear opportunities for personal career advancement.

Accordingly, the government of Ethiopia has initiated a tailored National Technical and Vocational
Training programme whereby students from grade eight and ten receive adequate technical and
vocational training in various fields. The programme is expected to enable them trainees develop a
working skill, knowledge, and attitude which would enable them to secure employment in the labor
market or create their own jobs. The training will be organized in such a way that the technical skill
obtained through the program would fit the needs of the country’s development strategy through
widening the opportunities for people to find a job which fits with their talents and preferences. It
helps them to get decent work and a fair income. It helps people out of the poverty trap. It provides
them with skills to make progress in their life. (http://WWW.arrforum.org).

18
In order to provide options for the increasing the number of school leavers, the government
embarked up on a massive expansion of formal TVET some years ago. Between 1996/7 and 2004/5,
the number of TVET institutions providing formal non-agriculture TVET increased from 17 to 199,
and enrollment from 3,000 to 106,305. Of these, 31% were trained in non-government TVET
institutions. Around 60% of formal TVET is provided in the form of regular program and 40% in
evening classes. However, despite the enormous expansion, formal TVET only caters for less than
3% of the relevant age group .Enrolment figures in formal TVET programmes show a fair gender
balance with 51% female students. However, girls are over proportionately represented in commerce
and typical female occupations such as textiles and hospitality, and underrepresented in traditional
technical occupations. In 2004/05, another 42,000 trainees were enrolled in agriculture TVET
programmes and some 10,000 in teacher training institutes and colleges (MOE, 2008).

Indeed, it is unknown how many Ethiopians in total have access to relevant TVET (including
formal, non-formal and informal TVET). It is assumed, however, that demand by far exceeds the
current supply and that the majority of the population is not reached by TVET offers at the moment.
In fact, TVET accessible to school dropouts, unemployed, workers in industry and MSE sector,
prospective entrepreneurs, people living in rural areas and women are in very short supply (MOE,
2008: 11). This clearly implies that there is a big demand for TVET training as only less than three
percent of the relevant age group is currently getting some form of formal TVET training. This
makes it necessary to establish, facilitate, and equip more and more TVET centers. In this regard,
NGOs and the private sectors need to play more role as the government has budget limitations.

2.2.1. TVET for Self-Employment

Self-employment represents an important route into the labor market, especially in peri-urban and
rural areas. However, self-employment requires more than being technically competent in a certain
occupational field. In order to become successful, entrepreneurs need self-confidence, creativity, a
realistic assessment of the market, basic business management skills and openness to risks. Starting
a business, furthermore, requires access to finance, access to necessary permits and licensing, and
access to land or structures to operate from.

19
Against this background, basic entrepreneurial and business management training will be
incorporated into all relevant TVET programmes. The TVET authorities will provide assistance to
TVET providers to develop appropriate training packages, drawing on the magnitude of
international experience in this field.

TVET providers are also encouraged to consider the work environment in the local micro and small
business sector when designing their training programmes. This includes, for example, the
introduction and use of appropriate technologies and the organization of internships or cooperative
training programmes with micro and small enterprises. The TVET executive bodies will also
undertake initiatives to strengthen and raise quality in traditional apprenticeship training, as this
mode of TVET delivery is particularly effective in preparing youth for self-employment. TVET
institutions shall serve as centers of technology capability, accumulation and transfer. They shall
closely cooperate with the private sector in under taking problem-solving research programmes
(MOE, 2008).

2.2.2. Linkage of TVET to the World of Work (Labor Market Needs)

The World Bank, undated, had argued at the time that the cost of technical and vocational education
was too high compared with the returns to the economy, that the quality of training was poor and
that there was considerable mismatch between training and the needs of industry. National TVET
systems therefore need to develop the knowledge and skills that will help the workforce become
more flexible and responsive to the needs of local labor markets, while competing in the global
economy. Some countries have introduced TVET reforms that endeavor to integrate work-place-
based learning and training into the vocational education curriculum. To address this, research and
development is widely accepted as a powerful and effective method of helping to bridge the gap
between education and the world of work, as well as between TVET institutions and society (A joint
message from UNESCO and ILO, 2002).

Since the ultimate objective of TVET is employability and employment promotion, it is necessary to
link training to the needs of the labor market. TVET must be relevant and demand driven, rather
than supply-driven and a stand-alone activity. In order to do this, data is required on the actual
employability of TVET graduates, available job opportunities, and the evolving skill demands on the
20
labor front. Determining the demand for skills is best achieved through country-specific Labor
Market Information System (LMIS) and other survey instruments. The function of a labor market
information system or labor market “observatory” is to collect process and make employment
projections from information provided by employment ministries and agencies, demography
surveys, labor market related reports produced by economic think-tanks, feedback from employers
and tracer studies that track the employment destination of TVET graduates.

Among the mechanisms mentioned, the one which is thought to be the most important for this study
is conducting tracer study. According to the website (http://WWW.regional-tvet-conference-
vietnam), tracery study is defined as an instrument for training quality assurance and improvement
of TVET institutes. It provides feedback on how successful graduates of TVET are employed and
how they evaluate relevance and usefulness of they attended TVET training course for the
employment in retrospect. Do graduates get job after graduation? How is the quality of training? Is
the certain training programme adjusted to the needs of labor market? etc. are important questions
for graduates, vocational training institute, enterprises as well as decision makers on the system level
of Technical and Vocational Education (TVET).To trace the graduates from TVET institutes by
interviewing once or several times after graduation is important instrument for planning and
adjustment of TVET courses and programmes. Moreover, tracery study supports state management
agency in TVET in steering TVET system according to the demand of the labor market. As further
explained in the website, the importance of tracer study is:
 Measuring impact
 Obtaining qualitative information
 Using results for steering and improvement (results based management)
 Understanding the factors influencing the transition from school to work

Similarly, according to MOLSA(2012), graduate Tracer Studies are an excellent tool to identify the
satisfaction of the graduates with the curriculum and quality of the education they have received, to
understand the current employment status of graduates and how and if the acquired skills prepare
them for the labor market needs. Such studies are used to measure the impact of curricula, guide the
revision of curricula and to assess the quality of the education received. In light of this, in
(UNESCO, 2010) the acquisition of technical and vocational skills must lead to gainful wage or
21
non-wage employment. For this to happen, it is important that training is geared towards the world
of work. One way of doing this is to create a mechanism for predicting or following the dynamics of
the labor market. Tracer studies which track the destination of graduates in the job market can also
provide useful feedback for the revision of training curriculum so as to enhance the employability of
trainees.

TVET institutions have to be well informed about the local market demand to solve the problem of
the mismatch between training and labor market. In view of this (UNEVOC, 2009) reported that the
role of TVET is to develop human resources to match the labor requirements at national and
international levels. This has been a challenging task since the labor needs is keep changing.
Changes in demography, business environments and technology affect the quantitative and
qualitative needs of labor. The rapid changes in labor demand require the TVET to respond fast.
Therefore, planning and implementation of TVET sector requires analysis and forecasting of labor
requirements. Labor intermediation services like labor market information system reduce the job
search costs for both workers and employers by improving the information flow between the labor
demand and supply sides concerning available jobs and skills need.

On other hand, employers and their organization is the one among all others which is supposed to
take part and to have roles in adjusting the graduates for the demands and quality requirement of the
labor market. They are the employing organizations and trade unions which should be involved in
guidance and counseling activities in collaboration with schools, colleges, training institutions and
labor market authority. These groups supposed to offer possibilities for study visits at companies,
work practice periods for trainees and made information arrangements through contact person or
group (Vendsen, 2002: 22).

Thus, enabling graduates competent labor force and skilled personnel is not the only possibility of
the training institutions and the counselor. It necessities the involvement of all responsible bodies:
who are the direct or indirect beneficiaries of the outcomes.

Altogether, in order to create positive relationship between TVET and labor market, it is quite
advisable to make the training job-oriented that advocates self-employment as well. By and large, as
22
stated by Wanna (1992: 61); Robert (1975: 123) for TVET to be highly related to the labor market
and addressing both individual and societal demands, it has to be appropriate to the situation,
relevant to the system, efficient to the trainee realizing his or her interest and be a system that re-
examining its program in the light of the new relationship between man, his work and his education
and training.

2.2.3. Vocational Education and Training-Meeting the Needs of Labor Market

The primary purpose of any Vocational Education and Training system is to develop sufficient
people with the right skills to meet the labor market needs. All vocational education and training
systems face the challenge of matching the skills, knowledge and attitudes of the students of the
system to the needs of employment-the labor market (Bob, 2001).

As a result of economic and industrial changes from the 1970s on wards, it became clear that
modifications made to the curriculum were not sufficient to meet new employment requirements.
Changes in the economy were becoming very rapid and some of the advances in technology could
not be covered by traditional subjects and disciplines. In many developed countries, the relationship
between the vocational education and training system and the needs of employment weakened and
employers started to complain about the lack of relevance of the vocational education and training
curriculum. As a result, many governments started to reform their vocational education and training
systems to strengthen the link between vocational education and training programmes and the needs
of employment (Bob, 2001).

2.2.4. Employment Service within a Labor Marketing System

The employment services aim at significantly speeding up and improving the quality of education
matching the labor market. This reduces the average period of unemployment and, if the placement
services are of good quality makes employment relationships more stable. According to Bosker
(1996), with the dynamic nature of jobs, there have been a number of significant changes in the
pattern of education and training for young people. The main trends include an increase in the
number of people entering higher education, closer link between education and business, with the
school curriculum being more relevant to the requirements of employers, more work experience for

23
students before they graduate from the training institutions, more emphasis on people attaining
occupational qualifications; and special focus on higher level skills.

On order to cope with such trends, according to HMSO (1994, 45), partnership between the
employers and the education system must be established. In this respect, there must be a number of
government initiatives to make education more relevant to the needs of working life. The
preparation for work provides those seeking to enter the labor market with skills of world class
standards, which will help them to secure employment (fig. 1).

Occupational Guidance Based on information

(OG) gathered
Placement
Based on data from… service
Labor Market Information
service (LMIs)

Figure 1: Employment service and labor marketing System (Source: ILO (1998:42)

In this context, it may be beneficial to link the provision of vocational counseling and training
advice directly with the employment services in order to increase the employment impact of both
services. This seems to show that vocational guidance and counseling service is one of the major
factors that can influence TVET graduates’ employment status.

Vocational guidance and counseling as part of the guidance and counseling provided for first
jobbers, school students, school- leavers and also drop-outs should receive support aimed at
identifying their skills and suitable occupations and in preparing applications. Better information can
help them to avoid making the wrong decisions, which are personally frustrating and economically
expensive. The benefit of vocational guidance for young people is apparent from the greater success
achieved in selecting a career which matches their potential and better matching with the needs of
the economy. Assuring the employability of trainees begins with effective guidance and counseling
of potential trainees in the choice of training programmes in relation to their aptitude and academic

24
background. Vocational guidance is therefore also intended to help prevent or reduce youth
unemployment and skills shortages (Stuth and Kuhn, 2005).

From this point of view that, increased attention will be given to vocational guidance and counseling
to enable future trainees, in particular youth, to choose the right career and make full use of the
initial and life-long learning opportunities provided by the TVET system. Vocational guidance has
to start at pre-TVET level. Accordingly, TVET institutions will also assign and train vocational
guidance staff. They will cooperate with schools for early orientation of school leavers and with
NGOs, community organizations and other relevant organizations to offer guidance to other local
target groups. The vocational guidance staff at TVET institutions will be instrumental in facilitating
apprenticeships and preparing youth for apprenticeship training. They will also be focal points in
organizing self-employment support for TVET graduates (MOE, 2008).

25
 CHAPTER THREE
3. Research Design and Methodology
This chapter consists of the approach of the research design, population and sample size, the
sampling techniques, data sources and tools of data collection, and method of data organization.

3.1. Research Design

The approach used in this research was a mixed research approach which makes the use of both
quantitative and qualitative descriptive methods. Quantitative method was used to apply
frequency and percentage of respondents' data collected through questionnaire. Quantitative
analysis involves data ranging from simple counts such as: frequency of occurrence to more
complex data (Saunders, Lewis and Thornhill, 1997:287). Thus, according to the authors,
whenever quantitative method is applied, analysis and interpretation makes use of the data. To
this end, the data collected was coded into SPSS software and the frequency and percentage of
the data were generated for analysis and interpretation.

The research was conducted on a TVET training college as a case since the target populations
were large and the address of the sample respondents was dispersed in all sectors of all over the
regions and the research was also a survey type of tracer study. According to (Saunders, Lewis
and Thorn hill, 1997:76), survey research allows the collection of a large amount of data from a
sizeable population in a highly economical way which most often used, but limited to
questionnaire in data collection. That is why questionnaire is used as a major data collection tool
and were employed in this research.

Qualitative method was also employed to describe and analyze the information obtained through
interview from the Dean of the college, entrepreneurial course instructors, employing
organizations (industries), Micro and Small Scale Enterprise office head and MSE centers. When
used along with quantitative methods, qualitative research can help to interpret and better
understand the complex reality of a given situation and the implications of quantitative data. Due
to these facts, therefore, a mixed approach of research methods was employed in this study.

26
 3.2. Population and Sample Size
The target population of the study was a graduate of the last three years (2010-2012) of Meserak
TVET College. To this end, five departments, namely Construction, Automotive, Metal
Manufacturing, Electricity/Electronics, Textile and Garment was selected using random
sampling techniques. The sample was planned to be 10% of the total population and also
believed to be representative for the researcher’s convenience based on resources limitation.

S/ Departments Graduation years Sampl

N 2010 2011 2012 Total e
drawn
M F T M F T M F T M F
using
10%
1 Construction 104 44 148 109 81 190 146 123 269 359 248 61
2 Metal 80 52 132 84 53 137 104 65 169 268 170 44
manufacturing
3 Automotive 82 51 133 115 59 174 54 41 95 252 151 41
4 Electricity/electro 81 50 131 63 55 118 83 71 154 227 176 41
nics
5 Textile and 40 38 78 50 65 115 28 46 74 118 152 27
Garment
Total 387 235 622 421 313 734 415 346 761 1228 905 214
10% sample size 2133= 214

Table 1: Sample Size from target population (Source: 2006 E.C data was taken from Planning
and Information Management Office of Meserak TVET College)

3.3. Sampling Techniques/Procedures

The study was delimited to Yeka Sub-City in Addis Ababa. The college was selected for a
specific purpose that presence of well documented address of the last three years graduates and
also the educational level it awards in various disciplines (from Level- 1 to Level- 4) etc. was
taken into considerations.

Regarding graduates, the sample was drawn from the consolidated list of graduates for the year
2010-2012(department specific). Thus, some of the probability (stratified and systematic)
techniques were employed. Graduates were stratified according to their respective departments

27
and from the total population, that is, from Construction, Automotive, Metal manufacturing,
Electricity/Electronics and Textile and Garment department, 10% of the total population were
included in the sample by considering the last three years (2010-2012) graduates of Meserak
TVET College found in Yeka Sub city.

Stratified sampling was applied for heterogeneous groups in order to obtain representative
sample from each group of a given population (Kothari, 2004:62). Thus, in this research, it was
used considering the departments and graduation years as strata. To this end, department,
graduation batches and occupational fields were used as strata to draw proportional samples from
each stratum. To draw every nth item at a fixed interval on a list so that the randomness could be
involved using a randomly considered starting number to pick up the unit with which to start
(Kothari, 2004: 62).

The total number of trainers in the institution is 204. Accordingly, out of the total populations, 80
instructors were included in the sample using Stratified Random Sampling Method because of
the heterogeneous nature of the respondents and in order to obtain representative samples from
each group of a given population.

Micro and small scale enterprise development head office, MSE center and entrepreneurial
course instructors were used as subjects for interview using purposive sampling techniques. On
the other hand, Dean of the College was used for interview using Purposive sampling technique.
At last MSE facilitators were selected as subjects for questionnaire using random sampling
techniques.

The Enterprises’ (MSEs’) sample were selected on a purposive basis for the reason that the larger
the firm, the more it absorbs the graduates. In view of the basic aim of representativeness of
enterprises (MSEs), it was necessary to give a higher weight age to public enterprises (MSEs)
establishments based on their size. As a result, 2 MSEs were selected and included in the sample.

3.4. Sources of Data

The major sources of data in this study were categorized into primary and secondary data
sources. The primary data sources were the Dean of the College, trainers, trainees, employing

28
organizations (industries), Micro and small scale enterprise development head office, Micro and
small scale enterprise center, and entrepreneurial course instructors. The secondary sources of
data were obtained from documents and record offices of the college.

3.5. Tools of Data Collection

In this study, both questionnaires (closed-ended and open-ended) were employed to collect
pertinent data from Graduates of the last three years (2010-2012) and trainers of the college.
Besides, interview was employed to collect data from employing organizations (industries), Dean
of the college, Micro and small enterprise development office head, MSE center, Enterprises
(MSEs) and entrepreneurial course instructors.

3.5.1. Questionnaire
A structured questionnaire was considered as a major data collection tool and it was administered
to the sample subjects (graduates, trainers and MSE facilitators). It was structured because it was
prepared to rate sets of given variables using a five point Likert-type rating scale and other labels
of rating scale, which were closed-ended type. It also invited free response at the end of a given
set of variables just to add if missed points were felt by the respondents.

Three sets of questionnaires consisting of three parts were set; Items on background information
of respondents, multiple choice alternatives and the role of MSE in reducing youth
unemployment of TVET graduates, and critical problems facing MSE depending on the literature
(in chapter two) and basic research questions designed at the beginning (chapter one) were
included. In addition to these sets of questionnaire, interview guide questions were constructed
for Dean of the college, Entrepreneurial course instructors, Micro and Small Scale enterprise
development head office and MSE centers.

3.5.2. Interview
Interviews are optimal for collecting data in-depth on individuals’ personal histories,
perspectives, and experiences, particularly when sensitive topics are being explored.
Accordingly, a semi-structured type of predetermined questions were prepared and conducted
with Dean of the college, Entrepreneurial course instructors, Micro and Small-Scale development

29
office and MSE centers to get pertinent and in-depth information from respondents with different
work experiences.
3.6. Pilot Test
Before the distribution of the questionnaire to the sample population of the study, a pilot test was
conducted on graduates of Shiro Meda Technical and Vocational Education and Training
institution. To this end, the instruments were given to professionals to judge the content validity
and message of the items in the questionnaire before it was distributed to the actual
respondents/sampled college. Then, three redundant questions were improved by this pilot test.
This helped the researcher to get feedback as to whether it was constructed properly, especially
in detecting some redundant, ambiguous and unclear items of the questionnaire.

3.7. Method of Data Organization and Analysis

The data collected through questionnaire were carefully encoded and interpreted and the result
generated was tabulated. Thus, frequencies and percentages of the counted responses of the
variables were used for descriptive analysis of the data. Interview responses were also described
and combined with the questionnaire response descriptions. Hence, qualitative and quantitative
analysis and interpretation of the implication of the data were made. To this end, strongly agree
(SA) + Agree (A) on one hand and Disagree (D) + strongly disagree (SD) on the other were
added together; as well as Very effective (VE) + Effective (E) on the one hand and Very in-
effective (VIE) + In-effective (IE) on the one hand (E) were also added together in their
respective pair for the sake of convenience.

30
 CHAPTER FOUR
4. Data Presentation, Analysis and Interpretation
In this chapter, the presentation and analysis of data collected from sample respondents are
presented and interpreted. Most of the data collected were analyzed by using tables followed by
discussions. For the sake of convenience, related questions were treated together. Interview
responses obtained from Dean of Meserak TVET College, MSE development head office and
entrepreneurial course instructors were incorporated to substantiate the data obtained using
questionnaire.

Based on the data collected by two methods (questionnaire and interview), the respondents’
characteristics, the presentation and interpretation of the data are presented as follows.

4.1. Characteristics of Respondents

Table 2 presents the characteristics of respondents by their sex, age, educational level and year of
service. Field of study and graduation years are confined to Meserak TVET College graduates
only.

31
 Table 2: Characteristics of Respondents by Sex, Age, Qualification and Year of Service.
S/N Dean (n=1) MSE Entrepreneurial Graduates Trainers (n=80) Total
Variables Alternatives development course instructors (n=214)
head office (n=2)
(n=2)
No % No % No % No % No % No %
1. Sex M 1 100 2 100 2 100 136 63.6 54 67.5 195 65.2%
F - - - - - - 78 36.4 26 32.5 104 34.8%
Total 1 100 2 100 2 100 214 100 80 100 299 100
2. Age Below 24 - - - - - - 156 72.9 16 20 172 57.5%
25-30 - - 1 50 1 50 40 18.7 29 36.3 71 23.7%
31-36 - - 1 50 - - 13 6.1 21 26.3 35 11.7%
37-42 - - - - 1 50 5 2.3 5 6.3 11 3.7%
43 and above 1 100 - - - - - - 11 13.8 12 4.01
Total 1 100 2 100 2 100 214 100 80 100 299 100
3. Qualification Certificate - - - - - - - - - - - -
Diploma - - 1 50 - - - - 52 65 53 62.4%
BA/BSC - - 1 50 2 100 - - 28 35 31 36.5%
MA/MSC 1 100 - - - - - - - - 1 1.2%
PhD - - - - - - - - - - - -
Total 1 100 2 100 2 100 - - 80 100 85 100
4. Year of Service Below 5 - - 1 50 2 100 - - 45 56.3 48 56.5%
5-9 years 1 100 1 50 - - - - 21 26.2 23 27.1%
10 and above - - - - - - - - 14 17.5 14 17.5%
Total 1 100 2 100 2 100 - - 80 100 85 100

32
 - - 35 18.3 - - 43 18.3%
5. Graduation 2010 - - - -
Year 2011 - - - - - - 76 34.9 - - 82 34.9%
2012 - - - - - - 103 46.8 - - 110 46.8%
Total - - - - - - 214 100 - - 235 100
6. Field of Study Construction - - - - - - 106 49.7 - - 106 49.5%
Metal Man. - - - - - - 55 25.7 - - 55 25.7%
Electronics - - - - - - 24 11.2 - - 24 11.2%
Automotive - - - - - - 19 8.9 - - 19 8.9%
Textile &Gar. - - - - - - 10 4.7 - - 10 4.7%
Total - - - - - - 214 100 - - 214 100
7. Current Level 1 - - - - - - 17 7.9 - - 17 7.9%
Educational Level 2 - - - - - - 32 14.9 - - 32 14.9%
Level Level 3 - - - - - - 70 32.7 - - 70 32.7%
Level 4 - - - - - - 95 44.4 - - 95 44.4%
Total - - - - - - 214 100 - - 214 100

33
According to the data in Table 2, out of a total 299 respondents, majority of the respondents
195(65.2%) are males while 104(34.8%) of the respondents are females. As far as the interviewees’
sex is concerned, however, all of them are males. Regarding Meserak TVET College graduates, out
of a total 214 respondents, 136 (63.6%) of them are males while 78(36.4%) of them are females. This
indicates that the numbers of male graduates was greater than the females in the institution and were
successful in employment. As the age distribution is concerned, observing from total, 172(57.5%) of
the respondents were in their young age (below 24 years old) while 71 (23.7%) of them were between
25 and 30 years of age. Regarding Meserak TVET graduates’ age in specific, majority of the
respondents 156(72.9%) of them were in their young (below 24 years old) while 40(18.7%) of the
graduate respondents were between 25 and 30 years of age.

The third question was posed to all the respondent excluding the graduates was concerning the
educational qualification. Accordingly, observing in general, it was found that 53(62.4%) of them
were diploma holders while 31(36.5%) them were first degree holders. None of the respondents were
master’s degree or PhD holders. As far as Meserak TVET trainer’s qualification profile is concerned,
out of a total 80 instructors, 52 (65%) of them were diploma holders while 28 (35%) of them were
first degree holders. Thus, it is considered to be below the standard set by education and training
policy. As the service year is concerned (excluding the graduates), it was found that 48(56.5%) of the
respondents indicated that they have below 5 (five) years of work experience while 23(27.1%) of the
respondents indicated that they have 5 to 9 years of work experience. The remaining 14(17.5%) of
the respondents indicated that they have 10 and above years of work experience.

The other aspect of respondents’ background characteristics was regarding the graduation year and
occupation (department).The representation in terms of department ranges from 106(49.5%) in
construction, 55(25.7%) in Metal manufacturing, 24(11.2%) in Electronics, 19(8.9%) in Automotive
and 10(4.7%) in Textile and Garment. Accordingly, 43 (18.3%) of the respondents were graduates of
(2010); 82 (34.9%) of the respondents were graduates of 2011 and the remaining 110 (46.8%) of the
respondents were graduates of 2012. This indicates that enrollment was significantly increased in the
institution from year to year in each department. Thus, to make the sample drawn proportional, it was
focused on the sampling techniques designed in chapter three of this study. To this end, Dean of
Meserak TVET College, MSE Development office head and entrepreneurial course instructors were

34
used for interview. Thus, the samples represent the different groups and their views are appropriate to
the study.

4.2. Graduates’ Employment Status and Major Employing Organizations

Table 3: Employment Status of Meserak TVET College Graduates and Major Employing Organizations
Graduates’ response
S/N Variables Alternatives No %
1. What is your current job Employed for wage 88 41.1
status? Unemployed 73 34.1
Self-employed 53 24.8
 Privately run my own business - -

 Have joint venture in MSE - -

 Belong to my family business - -

Other - -
Total 214 100
2. If your answer is ‘employed Less than 6 months 19 21.6
for wage’, how long did it take 6-12 months 43 48.9
you to get the job after 1-2 years 18 20.5
graduation? 3 and above years 8 9.1
Total 88 100
3. If your answer is Less than 6 months 32 43.8
‘unemployed’, how long have 6-12 months 39 53.4
you been unemployed since 1-2 years 14 19.2
completion of your training? 3 and above years 2 2.7
Total 73 100
4. If you are ‘wage employed’, Private 28 31.8
what is the type of NGO 6 6.8
organization you are currently Government 50 56.8
working for? Other 4 4.5
Total 88 100

35
Table 3 examines the employment status of Meserak TVET College Graduates. Out of a total 214
respondents, it was found that 88(41.1%) of the respondents were wage employed while 73
(34.1%) of them were unemployed. The remaining 53 (24.8%) of the respondents were found to be
self-employed. This indicates that the graduates are competent in the labor market as long as 161
(75.2%) of the respondents have got employment.

As to the second item of Table 4, of these who were working among study sample, 19(21.6%) of
the respondents found job within six months after graduation, 43(48.9%) of the respondents found
job within 12 months, 18 (20.5%) of the respondents found job within 1-2 years and 8 (9.5%) of
the respondents found job within 3 and above years. Similarly, out of a total 114 unemployed
graduates (item 3), 32(43.8%) of the respondents were unemployed for less than 6 months,
39(53.4%) of the respondents were unemployed for 12 months, 14(19.2%) of the respondents were
unemployed for 1-2 years. The remaining 2(2.7%) of the respondents were unemployed for 3 and
above years. From the graduates’ perspective, the delay in getting job was mainly due to lack of
money to search vacancy, limitation in personal relations, lack of work experience, scarcity of jobs
and lack of demand in their specialty are the major reasons.

Concerning item 4, the data indicated that out of the currently employed, 28 (31.8%) of the
respondents were hired by private sectors while 50(56.8%) of the respondents were hired by
government organizations. On the other hand, 4(4.5%) of respondents indicated that they were
hired out of the given alternatives. Limited number of respondents, that is, 6(6.8%) indicated that
they were hired in NGOS. This indicates that majority of the graduates have got employment in
government organizations than private organizations.

4.3. Tracer Study in the TVET Institutions

The following questions and responses indicated in the table below were defined to get
information on tracer study and the purpose of the study result in the institutions.

36
Table 4: Tracer Study and its Purpose in the Institutions

Respondents Group
S/ Items Graduates Trainers Total
N No % No % No %
1. Does Meserak TVET College
carryout tracer study?
Yes 76 35.5 37 42.5 113 38.4
No 122 57.01 15 17.5 137 46.6
I don’t know 16 7.5 28 40 44 14.9
Total 214 100 80 100 294 100
2. If ‘yes’, for what purpose does it
conduct tracer study?
To readjust fields of training 27 35.5 9 24.3 36 34.69
To identify satisfaction of the 11 14.5 8 21.6 19 14.29
graduates with curriculum and
quality of training they have received
To understand the current 17 22.4 16 43.2 33 25.51
employment status of the graduates
To obtain qualitative information and 15 19.7 4 10.8 19 19.39
measure impact
To enhance result based management 6 7.9 - - 6 6.12
Total 76 100 37 100 98 100

As can be seen in Table 4, the first question raised to the respondents was as to whether
Meserak TVET College conducts tracer study. Out of a total 294 respondents, 113 (38.4%) of
the respondents said ‘Yes’ while 137 (46.6%) of the respondents said ‘No’. To support this,
the researcher has tried to investigate if any documents exist in the college concerning the
graduates follow up study conducted in the institution. Accordingly, the researcher couldn’t
find anything documented regarding tracer study.

37
Perhaps, those respondents who said ‘yes’ might have no access to information about the
tracer study document conducted by the institution. Interview result conducted with Dean of
the College supported this response. He stated it as:

… We have been asked many times regarding graduates tracer study, by different government
bodies, but the institution was unable to give back the response for any of them. The problem
was resulted from lack of tracing graduates as to whether the graduates have got employment
after completion of training. To make the study easier, the three parts (MSE, Micro Finance and
TVET institutions are expected to work together in order to trace the graduates. In addition to
this, time and resources together with well documented graduates’ address has to be
considered. This all can make the study easier to trace the graduates. In the future, it will be a
must and our responsibility to give back response for the questions how many of the graduates
have found decent employment? Do the employers satisfied or dissatisfied with the graduates’
performance? How many of them were not successful in the labor market? etc., has to be
assessed and the results have to be utilized (interview response, (March 1, 2014).

In the previous chapter of this study, according to MOLSA(2012), Graduate Tracer Studies
were excellent tools to identify the satisfaction of the graduates with the curriculum and
quality of the education they have received, to understand the current employment status of
graduates and how and if the acquired skills prepare them for the labor market needs. Such
studies are used to measure the impact of curricula, guide the revision of curricula and to
assess the quality of the education received. Moreover, against the responses obtained
regarding tracer study, one of the duties and responsibilities assigned to TVET institutions is
conducting tracer study and utilizing the result of the study to carry out market- oriented
training program and also to update the knowledge of trainees about the labor market demand.
Perhaps, those respondents who confirmed the presence of tracer study in the institution might
have no access to information about the tracer study document conducted by the institution.

38
 4.4. Entrepreneurial Environment
Young people face difficulties, obstacles and barriers to start a business in many fields.
Table 5: Entrepreneurial Environment/Condition

Respondents Group
S/ Items Graduates Trainers Total
N No % No % No %
A Barriers to start business(self-employment)
1 Social and cultural attitude towards self- 54 25.2 12 15 66 22.4
employment
2 Entrepreneurship education 18 8.4 8 10 26 8.8
3 Access to start-up capital 97 45.3 40 50 137 46.6
4 Administrative and regulatory frame work 17 7.9 6 7.5 23 7.8
5 Business assistance and support 28 13.1 14 17.5 42 14.3
Total 214 100 80 100 294 100

As it is depicted in the Table 5 above, the respondents were asked to rate obstacles,
difficulties and barriers that young people faced. Accordingly, the respondents ranked and
summarized as follows:-
1. Lack of access to finance was identified by 137(46.6%) of the respondents
2. Social and cultural attitude towards self-employment was identified by 66(22.4%)
of the respondents
3. Lack of business assistance and support was identified by 42(14.3%) of the
respondents
4. Entrepreneurship education was identified by 26(8.8%) of the respondents
5. Administrative and regulatory frame work was identified by 23(7.8%) of the
respondent

39
4.5 Entrepreneurship Course for the Trainees
Table 6: Entrepreneurship Training in the Institutions
Respondents Group
S/ Items Graduates Trainers Total
N No % No % No %
1. Does Meserak TVET College provide
entrepreneurship course for the trainees?
Yes 214 100 80 100 294 100
No - - - - - -
Total 214 100 80 100 294 100
2. If ‘yes’, how adequate was the
entrepreneurship training given for the
trainees to help them to start their own
business?
Very high 27 12.6 4 5 31 10.5
High 48 22.4 12 15 60 20.4
Medium 71 33.2 39 48.8 110 37.4
Low 66 30.8 20 25 86 29.3
Very low 2 0.9 5 6.2 7 2.4
Total 214 100 80 100 294 100

The questions and responses in Table 6 above were aimed to know the provision of
entrepreneurship course for the graduates. Out of a total 294 respondents, all the respondents,
294 (100%) said ‘Yes’. Concerning the adequacy of entrepreneurship training offered, 110
(37.4%) of the respondents rated as ‘medium’ and 86 (29.3) below ‘medium’. Interview
results conducted with entrepreneurial course instructors supported this response. They
explained it as in a similar manner as follows:

40
 …as a course, the time given for entrepreneurship course was not enough as long as we have
only a class once a week and many class students join in a room and teaching learning takes
place. This in turn hinders the trainees not being equipped with necessary entrepreneurial
skill to create their own venture. In fact, despite no good background of the trainees regarding
entrepreneurship at elementary or high school level, we have tried to encourage the trainees
to seek the course and work together in a class on vital topics; for instance, preparing
business plan and its basic concepts are given theoretically followed by necessary discussions.
After all this, the trainees are often taken to the work area in the form of visiting where many
enterprises are found. Following, the trainees are expected to prepare business plan
accordingly and internalize it. However, the major difficulty that the graduates are often
facing, after completion of training, is lack of start-up capital and openness to risk (interview
response, March 6, 2014).

This interview responses clearly indicates that the entrepreneurship course that the graduates
have received is not satisfactory due to the fact that the time given for the course was
inadequate so as to equip the graduates’ necessary entrepreneurial skill. The problem was
resulted from inadequate time and paying no due emphasis for the course. In chapter two of
this study, however, the initiative to launch and promote entrepreneurship education in TVET
institutions is promising as more young people than ever before now envisage self-
employment through business creation (UNESCO, 2010).

41
 4.6 Organizing Graduates for Self-Employment and the Role of MSE in
Reducing Youth Unemployment

Table 7: Organizing Graduates in MSEs and the Major Challenges they Faced

S/ Respondents’ Group
N Items Graduates Trainers Total
No % No % No %
1 Are there favorable conditions for graduates
to be organized under MSE?
Yes 73 34.1 44 55 117 39.8
No 141 65.9 31 38.8 172 58.5
I don’t know - - 5 6.2 5 1.7
Total 214 100 80 100 294 100
2. If ‘No’, in your own experience, what are
the major constraints that prevent the
graduates from starting their own business?
Lack of confidence in the graduates 7 4.9 - - 7 4.1
Unfavorable condition from MSE 31 21.9 9 29.03 40 23.3
facilitators
Lack of experience to operate business 10 7.1 6 19.4 16 9.3
Weak tie among TVET, Micro finance 12 8.5 5 16.1 17 9.9
institutions and MSE development head
office
Lack of material resources 42 29.8 3 9.7 45 26.2
Lack of work site 24 17.02 3 9.7 27 15.7
Attitude towards wage employment 15 10.6 5 16.7 20 11.6
3 How do you evaluate the role of MSE in
reducing youth unemployment?
Very high 45 21.02 22 27.5 67 22.8
High 68 31.8 40 50 108 36.9
Medium 76 35.5 13 16.25 89 30.3
Low 25 11.7 3 3.8 28 9.5
Very low - 2 2.5 2 0.7

Table 7 above consists of questions and responses on some of the drawbacks preventing the graduates
from creating their own venture. Regarding as to whether favorable conditions for graduates to run
self-employing business, majority of the respondents 172 (58.5%) said ‘No’ while 117(39.8%) of the

42
respondents confirmed the presence of favorable conditions to start their own business. Limited
number of respondents, that is, 5 (1.7%) of the respondents said ‘don’t know’. This indicates that
there is no favorable condition that can create pleasant atmosphere for the youth (graduates) in the
world of work.

When they were asked to indicate the major constraints preventing the graduates from creating their
own business, based on the respondents’ response, the following are the major problems preventing
the graduates from starting their own business. Based on the degree of the problems, the following
are listed and summarized as follows:
 lack of material resources identified by 45(26.2%) of the respondents;
 unfavorable condition from MSE facilitators identified by 40(23.3%) of the
respondents;
 lack of work site identified by 27(15.7%) of the respondents;
 attitude towards wage employment identified by 20(11.6%) of the respondents;
 weak tie among TVET, Micro finance institutions and MSE development head office
was identified by 17(9.9%) of the respondents;
 lack of experience to operate business identified by 16(9.3%) of the respondents; and
 lack of confidence in the graduates identified by 7 (4.1%)of the respondents

In the previous chapter of this study, according to (HLCLEP, 2006), most MSEs face critical
constraints both at the operation and start up level. Some of these constraints include lack of access
to finance, lack of access to premise, lack of infrastructure, lack of training in entrepreneurial and
management skills, lack of information on business opportunities, social and cultural facts, in
particular deficient entrepreneurial culture and excessive corruption.

The discussion carried out here indicates that lack of financial resource (lack of start-up capital) is
ranked first and become the major problem that the graduates faced after completion of training,
especially to create their own venture. Interview result conducted with one of the experts acting as
MSE facilitator in Micro and Small Scale Trade Development Office head supported this response
as follows:

43
 …Organizing graduates in MSEs have got top priority so as to solve the problem of
unemployment in general. Aiming to attain what has been set by the government, TVET
institutions are supporting trainees on their side when the trainees are in the institution.
Together with the system, it was decided that the graduates are expected to save money in their
own which accounts 20% to get loan. However, the graduates were unable to contribute the
20% saving required to get loan from the existing micro-finance institutions. For me, that was
the major obstacle to organize the graduates under MSEs and easy loan provision service
(interview response, March 8, 2014).
The last question posed to the respondents is regarding the role of MSE in reducing youth un
employment. Accordingly, out of a total 294, majority of the respondents 175(59.7%) of the
respondents gave their response ‘high’, 89(30.3%) of the respondents said ‘Medium’ while
30(10.2%) of the respondents gave their response ‘Low’. This implies that the role of MSE in
reducing youth unemployment is recognized as high.
4.7 Loan Provision Services and the Major Constraints
Table 8: Access of Loan Provision Services and the Major Constraints
S/ Variables Alternatives Graduates’ response
N No %
1. Are there favorable Yes 58 27.10
conditions to get loan? No 156 72.9
Total 214 100
2. If your answer is ‘No’, what Parents do not want to sign 22 14.10
are the major problems you collateral agreement
encountered to get loan? Fear of money loss by the graduates 18 11.5
Charging high rate of interest 27 17.3
Financial institutions demand 38 24.4
collateral which is beyond your
capacity
MSE facilitators refuse service for 51 32.7
individuals who are not organized
in micro and small scale enterprise
Total 189 100

44
Table 8 above is organized to identify whether there are favorable conditions for the graduates to
get loan and what major challenges the graduates face to get loan are raised to the graduates.
Accordingly, out of a total 214 respondents, 58(27.10%) of the respondents said ‘Yes’ while
majority of the respondents 156 (72.9%) said ‘No’. This seems to show that there was no
conducive and easy loan provision service for the graduates so as to help the graduates to create
their own venture.

As to item 2 of Table 8 is concerned, out of a total 156 respondents, 51 (32.7%) of the

respondents identified the problem as the first and critical in relation to MSEs service, 38 (24.4%)
of the respondents identified the problem as the second in relation to financial institutions, 27
(17.3%) of the respondents identified the problem in relation to charge of loan interest, 22
(14.10%) of the respondents identified the problem in relation to their parents. The remaining 18
(11.5%) of the respondents identified the problem in relation to fear of money loss by the
graduates as well as the parents. In line with this, it can be concluded that the refusal of M SE
facilitators’ service is the major problem for getting loan.

45
 4.8Measures to be taken to Improve Youth Employment (Graduates)
Table 9: Measures to be Taken to Improve Youth Employment of Meserak TVET Graduates
S Respondents group
/ Methods Graduates Trainers Total (n=294)
N (n=214) (n=80)
No % No % No %
1. Limiting the number of trainees to only employable fields
VE+E 162 75.7 58 72.5 220 74.8
ME 43 20.1 15 18.8 58 19.7
NE 9 4.2 7 8.7 16 5.4
2. Improving the linkage between TVET institution and
employers regards employment opportunities of graduates,
skill needs, fields of training and method of instruction.
VE +E 172 80.4 48 60 220 74.8
ME 28 13.1 21 26.3 49 16.6
NE 14 6.5 11 13.8 25 8.5
3. Availability of placement service, conducting tracer study,
and planning system for allocation of jobs.
VE +E 167 71.06 30 75 197 71.64
ME 58 24.68 10 25 68 24.72
NE 10 4.26 - - 10 3.64
4. Increasing access to finance
VE +E 143 66.8 48 60 191 64.9
ME 47 21.9 27 33.8 74 25.2
NE 24 11.3 5 6.2 29 9.9
5. Promoting business assistance and support
VE +E 155 72.4 41 51.3 196 66.6
ME 51 23.8 25 31.3 65 22.2
NE 8 3.8 14 17.4 9 3.2
6. Creation of easily accessible credit and loan services for
individual and group of graduates free of interest
VE +E 154 71.9 49 61.3 203 69
ME 43 20.2 29 36.3 72 24.5
NE 17 7.9 2 2.4 19 6.5
7. Promoting entrepreneurship education in TVET so as to
produce competent graduates in self-employing business
VE +E 138 64.5 56 70 194 65.9
ME 52 24.3 22 27.5 74 24.2
NE 24 11.2 2 2.5 26 8.8
8. Improving the partnership among TVET, micro finance and
MSE development head office
VE +E 161 75.2 44 55 205 69.7
ME 33 15.4 30 37.5 63 21.4
NE 20 9.4 6 7.5 26 8.8
VE=very effective E=effective ME=moderately effective NE=not effective

As displayed in Table 9, the respondents were asked to evaluate the methods as a means of improving
youth unemployment of TVET graduates. Accordingly, concerning item 1, majority of the
respondents 220 (74.8%) of the respondents indicated that the method as a means of improving youth

46
employment of TVET graduates is through limiting the number of trainees to only employable fields
of training as an ‘effective’ method.

Concerning item 2, majority of the respondents 220(74.8%) indicated that the method is ‘effective’
while 49(16.6%) of the respondents indicated the method is ‘moderately effective’. This clearly
indicates that the method is effective as a means of improving the employment status of TVET
graduates.

Concerning item 3, out of a total of 294 respondents, majority of the respondents 197 (71.64%)
pointed out that the method is ‘effective’ while 68 (24.72%) of the respondents pointed out that the
method is ‘moderately effective’.

The fourth method as a means of improving youth employment of TVET graduates is by creating
access to finance. Accordingly, it was found that majority of the respondents 191 (64.9%) of the
respondents indicated that the method is ‘effective’ while 65(22.2%) of the respondents indicated that
the method is ‘moderately effective’.

The 5th method as a means of improving youth employment of TVET graduates is promoting
business and support. Out of a total of 294 respondents, majority of the respondents 196(66.6%)
indicated that the method is ‘effective’ while 65 (22.2%) of the respondents pointed out that it is
‘moderately effective’.

The 6th question raised to the respondents was regarding creation of easily accessible credit and loan
services for individuals and group of graduates. Accordingly, it was found that majority of the
respondents 203 (69%) said that the method is ‘effective’ while 72 (24.5%) of the respondents
indicated that the method is moderately effective. Item 7 was concerning promoting entrepreneurship
education as a mechanism so as to produce competent graduates in self-employing business. Out of a
total of 294 respondents, majority of the respondents 194(65.9%) indicated that the method is
‘effective’.

47
Based on the data obtained, the respondents’ response are summarized and ranked in their order of
degree of effectiveness in improving youth employment of Meserak TVET graduates in specific and
all other TVET graduates in general are:
 Limiting the number of trainees to only employable fields of training was identified by 220
(74.8%)of the respondents
 Strong linkage between TVET institutions and employers concerning employment
opportunities of graduates, skill needs, content and methods of instruction identified by 220
(74.8%) of the respondents.
 Availability of placement service was identified by 197 (71.64%) of the respondents.
 Creation of easily accessible credit and loan services for individuals and group of graduates
identified by 199 (72.36%) of the respondents
 Promoting business assistance and support was identified by 196(66.6%) of the respondents.
Therefore, the implication of the above summary of the data indicates that limiting the number of
employees to only employable fields and creating strong linkage between TVET institutions and
employers were ranked equal as the two highest measures to be taken to improve youth employment.

48
 CHAPTER FIVE
5. Summary, Conclusions and Recommendations
5.1. Summary of the Major Findings
The purpose of this study was to assess the role of Micro and small enterprise in reducing youth
unemployment as witnessed by Meserak TVET college graduates of the last three years (2010-2012)
in Addis Ababa city administration in Yeka sub city. The study was focused on the current
information regarding the role of MSE in reducing youth unemployment of Meserak TVET college
graduates.

Accordingly, basic questions were addressing the role of MSE in reducing youth unemployment, the
partnership among TVET, MSE development head office and Micro finance institution, major causes
for youth unemployment Meserak TVET College graduates, major constraints preventing the
graduates from starting their own business.

The approach used in this research was a mixed research approach which makes the use of both
qualitative and quantitative description. To this end, questionnaire and interview methods of data
collections were employed. Stratified and systematic random sampling techniques were used to select
respondents for questionnaire from the target population and as a result, 294 respondents were
participated. Interview respondents were also Dean of the college; two MSE development head office
and two entrepreneurial course instructors were selected and used in this study.

5.1.1. Background Characteristics of Respondents

As the sex profile of the respondents indicated the proportion of male is higher among the graduates
of Meserak TVET College. This indicates that the number of male graduates was greater than the
females in the institution and were successful in employment. Regarding the academic profile of
Meserak TVET College trainers, majority of the trainers 52 (65%) were diploma holders, which was
below the standard set by education and training policy.

Out of a total 214 graduates who were subjected to this study, 88 (41.1%) of them were employed for
wage, 73 (34.1%) of them were unemployed. The remaining 53 (24.8%) of them were found to be

49
self-employed. This does not mean that the graduates were fully competent in the labor market. This
attributes to scarcity of jobs in the labor market, lack of placement service, lack of tracing graduates,
inadequate guidance and counseling service, attitude towards wage employment etc.

5.1.2. Tracer and Labor Market Demand Study in the TVET Institution
Tracer studies which track the destination of graduates in the job market can provide useful feedback
for the revision of training programmes so as to enhance the employability of trainees. Accordingly,
out of a total of 294 respondents, 137(46.6%) of them reported that Meserak TVET College does not
practice tracing of graduates to find out if they get employed or not. As a result, the percentage of
graduates either in gainful or self-employment was not defined. The problems for not tracing the
graduates are: resource limitation, lack of necessary interaction between TVET institution, graduates’
part and the employers’ part were found to be the main problems.

5.1.3. Entrepreneurship Courses for Trainees

Entrepreneurship courses have been given for trainees in the institution. However, the course offered
has not been satisfactory to equip graduates with necessary entrepreneurial skills that help them to
create self-employing business. Some of the reasons for the problems were found to be: inadequate
time given and lack of paying due emphasis for the course and trainees’ background information
about entrepreneurship education at elementary or secondary school level are some of the
aforementioned problems reported by the respondents.

5.1.4. Organizing Graduates for Self-Employing Business and Some Major

Constraints Associated with it
The study disclosed that there is no favorable condition for organizing graduates under MSE and to
get loan. Some of the major problems are: lack of easy licensing process, (20%) saving demanded by
micro-finance institutions, weak relationship between the concerned bodies (MSE sector, TVET
institution and Micro finance institutions) and graduates’ attitude towards wage employment are
some of the problems indicated. In contrast, the trainers reported that there are favorable conditions to
organize the graduates under MSEs.

50
It was also reported that the major problems that prevented the graduates from creating their own
venture are: lack of financial resources, lack of material resources, lack of work site, unfavorable
conditions from MSE facilitators, lack of motivation (support), graduates’ attitude towards wage
employment, lack of experience to operate business, lack of sufficient training, and lack of
entrepreneurial ability are the major constraints indicated by the respondents.

5.1.5. Availability of Financial Institutions

In Addis Ababa city administration of Yeka sub city where the subject of the study is located, there
are financial institutions that lend money for the graduates who are organized in Micro and Small
Enterprises. Some of the problems related to those financial institutions in lending money for the
graduates are fear of money loss due to unwise use by graduates/parents, weak relationships that the
institution have with other sectors, unwillingness of graduates’ parent to sign collateral agreement
etc.
5.1.6. Partnership among TVET, Micro Finance Institutions, MSE Development
Head Office and Employing Organizations
Technical and Vocational Education and Training (TVET) operates in a complex environment owing
to the multiplicity of stakeholders, primarily the users and providers of technical education. It
requires a close linkage between the providers and the end users, who are the employers of technical
education. The need for such linkage between these two players are made more imperative because of
the fast technological changes affecting the relevance of programme curricula, facilities and other
components of technical education. This is just one of the many critical concerns that need to be
considered in Technical and Vocational Education. As the study revealed, there is weak tie among
TVET, micro finance institutions, MSE development head office and employing organizations and
found to be not satisfactory.

5.1.7. Problems and Factors Causing Youth Unemployment of Meserak TVET

Graduates
As it was indicated, there are a number of factors causing youth employment of TVET graduates.
Some of the factors found to be the major problem are: lack of access to finance, social and cultural
attitude towards self-employment, lack of business assistance and support, entrepreneurship

51
education, administrative and regulatory frame work, lack of guidance and counseling and
unfavorable condition from MSE facilitator are the major ones.

5.2. Conclusions
Based on the major findings of the study, the following conclusions were drawn:-
 As explained in the Ethiopian TVET strategy, the overall objective of the National TVET
Strategy is to create a competent, motivated, adaptable and innovative workforce in Ethiopia
contributing to poverty reduction and social and economic development through facilitating
demand-driven, high quality technical and vocational education and training, relevant to all
sectors of the economy, at all levels and to all people. Accordingly, Vocational and Technical
Education and Training (TVET) institutes and colleges are specially considered as a major
tool to achieve the desired development through creating job opportunities.
 Out of a total 214 respondents, 141 (65.9%) of them have been employed in government,
private and self-employing business. Of those who were working, a few percentages had
either joined a family business or joint venture. Others had established their own business.
The remaining 73(34.1%) of the graduates are still unemployed. This attributes to scarcity of
jobs in the labor market, lack of placement service and tracing of graduates, inadequate
guidance and counseling service, lack of business and financial support and the attitude
towards wage employment.
 Entrepreneurship courses have been given to the trainees but not satisfactory to help to expose
the graduates creating their own business. The problem was resulted from lack of appropriate
entrepreneurial skills, lack of openness to risk, graduates’ background information regarding
entrepreneurship education at elementary or secondary school level and inadequate time given
for the course are some the problems reported.
 Now a days, most MSEs face critical constraints both at the operation and start up level. Some
of these constraints include lack of access to finance, lack of access to premise, lack of
infrastructure, lack of training in entrepreneurial, lack of confidence to run business and, lack
of information on business opportunities, in particular deficient entrepreneurial skill as well as
entrepreneurial culture. This in turn made our TVET graduates not creating their own venture
rather than looking into wage employment. As the study revealed, on the other hand, the
major problems causing youth unemployment are social and cultural attitude towards self-

52
 employment, inadequacy of entrepreneurship education in the institution, lack of access to
start up finance, poor administrative and regulatory frame work, lack of business assistance
and support, lack of work site, lack of material resources, inadequacy of guidance and
counseling service and lack of placement service.

5.3. Recommendations
Depending on the findings of the study and the conclusions derived, the following suggestions are
forwarded:-
1. The major problems causing youth unemployment are: social and cultural attitude
towards self-employment, access to start-up finance, lack business assistance and
support etc. To curve the problem, it is advisable that the concerned bodies should
come with the best solution paying due attention to the key strategies.
2. The institution does not practice tracer studies. As a result, the percentage of graduates
either in gainful employment or self-employment was not defined. Therefore, it is
advisable to trace the graduates timely and effectively so that they can utilize the results
to meet the needs of the labor market and the required skills by the employers.
Similarly, a survey study of local market demand, and other assessments should be
carried out by the institution being taken as major tools of improving modes of delivery
of TVET programmes in the institution.
3. It is recommendable that the partnership among TVET, micro finance institutions,
MSE development head office and employing organizations is closely linked. This in
turn help the institution to determine the fields of studies that the institution should
provide so that the trainees that can provide better opportunity in the labor market and
as a result, the graduates being successful to get job in government or private
organizations related to their specialization. They can also help graduates to create their
own job either individually or in group.
4. Entrepreneurial training, which is invaluable for trainees, needs to be revised by
incorporating the experience of indigenous exemplary entrepreneurs supplemented with
different field visiting where the actual work is found so that the trainees develop
practical skills and self-employing business. In addition, adequate time should be given
for the course entrepreneurship so that the trainees will have adequate time to learn in

53
 the class as well as visit work site where many enterprises are available. Together with
this point, improving career guidance and counseling service in the institution is a
pivotal issue thereby assuring employability by reducing graduates’ unemployment and
assisting trainees to select marketable field of study.
5. Different concerned bodies (Meserak TVET College, Micro-finance institutions, MSE
sectors etc.) are the responsible bodies to organize and create conducive environment
for the graduates under Micro and Small Scale Enterprises (MSEs). As they were
named as “the three wings”, which is to mean that if one fails to function, others do the
same. Therefore, these are the three institutions to work together to mitigate the
problem of youth unemployment(graduates) in specific and unemployment problem in
general by working towards alleviating poverty in Ethiopia through promoting
economic growth. It is also advisable that administrators work towards assisting the
graduates by providing different project works (aiming to attain seed money) or
believing that the graduates attain the (20%) saving demanded by Micro finance
institutions.
6. Viewing in general, not all TVET graduates can be employed in government or private
organizations. Therefore, in order to reduce the number of graduates’ (youth
unemployment), government and private agencies, which are working on employment
of TVET graduates should assist the graduates to start their own business privately or
in group. One way of doing this is to organize them in small business trade and
assisting them to get start-up capital in the form of loan for materials purchasing from
financial institutions. In general, friendly environment needs to be created for the
graduates by avoiding a major bottleneck among micro financial institutions, MSE
sectors and TVET institutions because they highly recognized in reducing youth
unemployment.
7. The government body responsible for professional development of trainers of TVET,
such as the TVET Agency, has better to look into the quality of Meserak TVET college
trainers and work towards improvement of their competence either through short- term
training or summer in- service training in collaboration with the institution.
8. It is advisable that the graduates are expected to develop confidence while running their
own business. It is also recommendable that the graduates need to develop full

54
 confidence when jobs are available to them. This is viewed from the graduates’ degree
of confidence before they are exposed to the kind of business in the actual work.
9. It is also advisable that government and private agencies, which are working on the
employment of TVET graduates make cooperation to allocate jobs for TVET graduates
so that many TVET graduates become successful in getting job in the labor market.
Government on its side needs to set up venture capital to support TVET graduates by
strengthening MSE strategy and other mechanisms. All the above suggestions are
recommendable for TVET Colleges and other responsible bodies.

55
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59
- 60 -
 APPENDIX - A
Addis Ababa University
School of Graduate Studies
College of Education and Behavioral Studies
Professional and Vocational Education Program Unit
Questionnaire to be filled by Meserak TVET College graduates who have created their own
business.
Dear Respondent,
The purpose of this questionnaire is to collect data on the role of MSE in reducing youth
unemployment. Therefore, your honest and genuine response to the items in this questionnaire helps
to meet the objective of this study. The information you provide will be used for academic purpose
only and it will be kept confidential.
Thank you in advance for your cooperation!
General Instruction
 Don’t write your name;
 Put a tick () mark against your choice for items with alternative;
 For multiple choice items, you can use more than one answer, if you believe two or more
alternatives are important;
 Write your answer briefly for open ended questions.
Part I: Background
1. Sex: A. Male B. Female
2. Age: A. below 24 B. 25-30 C. 31-36 D.37-42
E. 43 and above
3. Field of study in the TVET institution:
A. Construction D. Automotive
B. Metal manufacturing E. Textile and Garment
C. Electronics/electricity
4. Graduation year:
A. 2010 B. 2011 C. 2012
5. Current educational level:
A. Level 1 C. Level 3
B. Level 2 D. Level 4

i
Part II: For the Multiple Choice Items Below, Put a Tick () mark against your Choice for
Items with Alternatives in the correct box.
1. What is the ownership status of your business?
A. Privately run (your own business)
B. Have joint venture (in share or in group)
C. Belong to your family business
If other, specify
2. Prior to starting this business, what was your employment status?
A. Employed for wage
B. Directly started the business after training
C. Working in a family
D. Practice for free service
E. Unemployed
3. Does Meserak TVET College carryout tracer study?
A. Yes B. No C. I don’t know
4. If your answer to question No.3 is ‘yes’, for what purpose did they conduct tracer study?
A. To readjust fields of training
B. To identify the satisfaction of the graduates with the curriculum and quality of training
they have received
C. To understand the factors influencing the transition from school to work
D. To obtain qualitative information and measuring impact
E. To enhance result based management
5. Were you given entrepreneurship course in the institution?
A. Yes B. No
6. If your answer to question No.5 is ‘yes’, how adequate was the entrepreneurship course you
offered to create your own business?
A. Very high D. Low C. Medium
B. High E. Very low
7. Are there favorable conditions to start your own business?
A. Yes B. No

ii
8. If your answer to question No.7 is ‘No’, in your own experience, what are the
constraints that prevented you from creating your own business? (Discouraging
factors). (You may choose more than one answer)
A. Lack of entrepreneurial ability
B. Lack of experience to operate business
C. Lack of material resources
D. Lack of financial resources
E. Lack of working site
F. Lack of support (motivation)
G. Unfavorable conditions from MSE facilitators
H. Lack of confidence due to its risk
I. Attitude towards wage employment
9. Are there favorable conditions to get loan? A. Yes B. No
10. If your answer to question No. 9 is ‘No’, what are the major problems that you
encountered to get loan?
A. Parents do not want to sign collateral agreement
B. Fear of money loss by the graduates
C. Charging high rate of interest
D. Financial institutions demand collateral which is beyond our capacity
E. MSE’s facilitators refuse service for individuals who are not organized in micro
and small scale enterprise
If other, specify
11. How do you evaluate the role of MSE in reducing youth unemployment?
A. Very high B. high C. Moderate D. Low E. Very low
12. How do you rate the involvement of government to organize the graduates in micro
and small scale enterprise to create their own business?
A. Very high D. Low
B. High E. very low
C. Medium

iii
Part III: Please read each statement carefully and put a tick‘’ mark below the number of your
response for each statement.

1. How do you rate the following factors that cause youth unemployment of TVET graduates?
(Use 5= strongly agree, 4= agree, 3=undecided, 2=disagree, 1=strongly disagree).
S/ Factors Degree of influence
N 5 4 3 2 1
1. Barriers to start business(self-employment)
2. Social and cultural attitude towards self-
employment
3. Entrepreneurship education
4. Access to start-up capital finance
5. Administrative and regulatory frame work
6. Business assistance and support

2. What are other problems you faced after graduation? Explain

3. How do you evaluate the following methods as a means of improving youth employment of
TVET graduates? (use 5=very effective, 4=effective,3=moderately effective,2= fairly
effective,1= not effective).
S/N Methods Degree of effectiveness
5 4 3 2 1
1. Limiting the number of trainees to only employable fields.
2. Improving the linkage between TVET institution and employers
regards employment opportunities of graduates, skill needs, fields
of training and method of instruction.
3. Availability of placement service, conducting tracer study, and
planning system for allocation of jobs.
4. Increasing access to finance
5. Promoting business assistance and support
6. Creation of easily accessible credit and loan services for individual
and group of graduates free of interest.
7. Promoting entrepreneurship education in TVET so as to produce
entrepreneur graduates.
8. Improving the partnership among TVET, micro finance and MSE
development head office.

iv
 APPENDIX -B

Addis Ababa University

School of Graduate Studies
College of Education and Behavioral Studies
Professional and Vocational Education Program Unit
Questionnaire to be filled by Meserak TVET College graduates who haven’t created their own
business.
Dear Respondent,
The purpose of this questionnaire is to collect data on the Role of MSE in Reducing Youth
Unemployment of TVET graduates. Therefore, your honest and genuine response to the items in this
questionnaire helps to meet the objective of this study. The information you provide will be used for
academic purpose only and it will be kept confidential.

Thank you in advance for your cooperation!

General Instruction
 Don’t write your name;
 Put a tick () mark against your choice for items with alternative;
 For multiple choice items, you can use more than one answer, if you believe two or more
alternatives are important;
 Write your answer briefly for open ended questions.
Part I: Background
1. Sex: A. Male B. Female
2. Age: A. below 24 B. 25-30 C. 31-36 D.37-42
E. 43 and above

3. Field of study in the TVET institution:

A. Construction D. Automotive
B. Metal manufacturing E. Textile and Garment
C. Electronics/electricity
4. Graduation year: A. 2010 B. 2011 C. 2012
5. Current educational level:
A. Level 1 B. Level 2 C. Level 3 D. Level 4
v
 Part II: For the Multiple Choice Items Below, Put a Tick () mark Against Your Choice for
Items with Alternatives in the correct box.
1. What is your current job status?
A. Employed for wage B. Unemployed
2. If your Answer to question No.1 is ‘B’, fill out questionnaire from (6-13); if your to question No.
1 is ‘A’ fill out questionnaire from (3-13).
3. What is the name of the organization in which you are currently working? ____________
4. What is the type of organization you are working for?
A. Private C. Government/Government Enterprise
B. NGO
If other, specify
5. Does Meserak TVET institution carry out tracer study?
A. Yes B. No C. I don’t know
6. If your answer to question No. 5 is ‘yes’, for what purpose do they conduct tracer study?
A. To read just fields of training
B. To identify the satisfaction of the graduates with the curriculum and quality of training
they have received
C. To understand the current employment status of graduates and how and if the acquired
skills prepare them for the labor market needs
D. To obtain qualitative information and measuring impact
E. To enhance result based management
7. Were you given entrepreneurship course in the institution?
A. Yes B. No
8. If your answer to question No. 7 is ‘yes’, how adequate was the entrepreneurship course you
offered to create your own business?
A. Very high D. Low
B. High E. Very low
C. Medium
9. Are there favorable conditions to start your own business?
A. Yes B. No

vi
10. If your answer to question No. 9 is ‘No’, in your own experience, what are the major constraints
that prevent the graduates from starting their own business? (Discouraging factors). (You may
choose more than one answer)
A. Lack of entrepreneurial ability
B. Lack of experience to operate business G. Lack of material resource
C. Lack of financial resource H. Lack of working site
D. Attitude towards wage employment I. Lack of support (motivation)
E. Unfavorable conditions from MSE facilitators
F. Lack of confidence due to its risk
11. Are there favorable conditions to get loan?
A. Yes B. No
12. If your answer to question No.13 is ‘No’, what are the major problems you encountered to get
loan?
A. Parents do not want to sign collateral agreements
B. Fear of money loss by the graduates
C. Charging high rate of interest
D. Financial institutional demand collateral which is beyond our capacity
E. Refuse service for individuals who are not organized in micro and small scale enterprise
13. How do you evaluate the role of MSE in reducing youth unemployment?
A. Very high B. High C. Moderate D. low E. very low
14. How was the involvement of government to organize the graduates in micro and small
scale enterprise to create your own job?
A. Very high D. Low
B. High E. Very low
C. Medium

vii
Part III: Please read each statement carefully and put a tick‘’ mark below the number of your
response for each statement.
1. How do you rate the following factors that cause youth Unemployment of TVET graduates? (Use
5= strongly agree, 4= agree, 3=undecided 2=disagree, 1=strongly disagree).
S/N Factors Degree of influence
5 4 3 2 1
A Barriers to start business(self-employment)
1 Social and cultural attitude towards self-employment
2 Entrepreneurship education
3 Access to start-up capital finance
4 Administrative and regulatory frame work
5 Business assistance and support

2. What are other problems you faced after graduation? Explain

3. How do you evaluate the following methods as a means of improving youth employment of
Meserak TVET graduates? (use 5=very effective, 4=effective,3=moderately effective,2= fairly
effective,1= not effective).
S/ Methods Degree of effectiveness
N 5 4 3 2 1
1. Limiting the number of trainees to only employable fields.
2. Improving the linkage between TVET institution and
employers regards employment opportunities of graduates,
skill needs, fields of training and method of instruction.
3. Availability of placement service, conducting tracer study,
and planning system for allocation of jobs.
4. Increasing access to finance
5. Promoting business assistance and support
6. Creation of easily accessible credit and loan services for
individual and group of graduates free of interest.
7. Promoting entrepreneurship education in TVET so as to
produce entrepreneur graduates.
8. Improving the partnership among TVET, micro finance and MSE
development head office.

viii
 APPENDIX - C

Addis Ababa University

School of Graduate Studies
College of Education and Behavioral Studies
Professional and Vocational Education Program Unit
Questionnaire to be filled by Meserak TVET College trainers (teachers)
Dear Respondent,
The purpose of this questionnaire is to collect data on the Role of MSE in Reducing Youth
Unemployment of TVET graduates. Therefore, your honest and genuine response to the items in this
questionnaire helps to meet the objective of this study. The information you provide will be used for
academic purpose only and it will be kept confidential.
Thank you in advance for your cooperation!
Part I: Background
1) Sex: A. Male B. Female
2. Age: A. below 24 B. 25-30 C. 31-36 D.37-42
E. 43 and above
3. Marital status: A. Married B. Divorced C. Single
D. Widow
4. Educational Qualification:
A. Certificate D. MA/MSC
B. Diploma E.PhD
C. BA/BSC
5. Work Experience:
A. 0-5 years B.6-9 years C. 10 and above years

ix
 Part II: For the Multiple Choice Items Below, Put a Tick () mark Against Your Choice for
Items with Alternatives in the correct box.

1) Does Meserak TVET College carry out tracer study?

A. Yes B. No C. I don’t know
2) If your answer to question No. 1 is ‘yes’, for what purpose they did conduct tracer study?
A. To read just fields of training
B. To identify the satisfaction of the graduates with the curriculum and quality of training they have
received
C. To understand the factors influencing the transition from school to work
D. To obtain qualitative information and measuring impact
E. To enhance result based management
3) Do you think that are there favorable conditions for graduates to start their own business?
A. Yes B. No C. I don’t know
4) If your answer to question No. 3 is ‘No’, in your experience, what are the major constraints that prevent
the graduates from starting their own business? (You may choose more than one answer).
F. Lack of entrepreneurial ability
A. Lack of confidence due to its risk G. Lack of material resources
B. Lack of financial resources H. Lack of working site
C. Lack of support (motivation) I. Attitude towards wage employment
D. Unfavorable conditions from MSE facilitators
E. Lack of experience to operate business
5) In your observation, did the graduates adequately informed about the labor market demand and job
opportunity?
A. Yes B. No C. I don’t know
6) If your answer to question No. 5 is ‘yes’, who were the responsible bodies informing the graduates?
A. Family C. TVET institution
B. Friends D. Employing organization
If other, specify

10
7) In your own observation, the involvement of government to organize the graduates in micro and small
scale enterprise to create their own job is
A. Very high C. Medium E. Very low
B. High D. Low
8) How do you evaluate the partnership between Meserak TVET, micro finance and MSE
development head office?
A. Very high D. D. Low
B. High E. E.Very low
C. Medium
9) If your answer to question No. 8 is ‘low’ or ‘very low’, would you explain the reasons for not
having partnership?

10) How do you evaluate the placement service and proper planning system conducted cordially
(different responsible bodies) in allocating jobs for TVET graduates?
A. Very high D. Low
B. High E. Very low
C. Medium
11) Does Meserak TVET College provide entrepreneurship course for the trainees?
A. Yes B. No
12) If your answer to question No. 11 is ‘yes’, how adequate was the entrepreneurship course
given for the trainees to create your own business?
A. Very high B. High C. Medium
D. Low E. Very low

xi
Part III: Please read each statement carefully and put a tick‘’ mark below the number of your
response for each statement.
1) How do you rate the following factors that cause youth unemployment of TVET graduates?
(Use 5= strongly agree, 4= agree, 3=undecided 2=disagree, 1=strongly disagree).
S/ Factors Degree of influence
N 5 4 3 2 1
1. Barriers to start business(self-employment)
2. Social and cultural attitude towards self-employment
3. Entrepreneurship education
4. Access to start-up capital finance
5. Administrative and regulatory frame work
6. Business assistance and support
2. How do you evaluate the following methods as a means of improving youth employment
of Meserak TVET graduates? (use 5=very effective, 4=effective,3=moderately
effective,2= fairly effective,1= not effective).
S/ Methods Degree of effectiveness
N 5 4 3 2 1
1. Limiting the number of trainees to only employable
fields.
2. Improving the linkage between TVET institution and
employers regards employment opportunities of
graduates, skill needs, fields of training and method
of instruction.
3. Availability of placement service, conducting tracer
study, and planning system for allocation of jobs.
4. Increasing access to finance
5. Promoting business assistance and support
6. Creation of easily accessible credit and loan services
for individual and group of graduates free of interest.
7. Promoting entrepreneurship education in TVET so as
to produce entrepreneur graduates.
8. Improving the partnership among TVET, micro
finance and MSE development head office.

3. What other possible measures should be taken to improve the employment status of
TVET graduates? Explain

xxii
 APPENDIX - D

Addis Ababa University

School of Graduate Studies
College of Education and Behavioral Studies
Professional and Vocational Education Program Unit
A/ Interview Guide Questions for Dean of the College
1. Would you explain briefly about your institution’s quality training provision (especially for
the last three years 2010 to 2012) while you are attempting to equip graduates with basic
employability skill?
2. Does your institution conduct tracer study? If, yes, for what purpose it conduct tracer study?
3. What are the major problems of the employing organizations to hire Meserak TVET
graduates?
4. In your own observation, how were the attitudes of Meserak TVET College graduates toward
wage employment rather than self-employment as an occupation?
5. How important would you consider the relevance of the curriculum to the local market
needs?
6. Do you have a permanent and continuous partnership with the potential employers? If ‘yes’
how often? If ‘No’, what are the main reasons for not having partnership?
7. In your own experience, what are the problems that Meserak TVET graduates encountered
while seeking wage or self-employment after completion of training?
8. Have you heard something as a feedback, for instance, meeting employers’ expectations was
a major challenge of Meserak TVET college graduates?
9. Different research findings have shown that there is unemployment problem of TVET
graduates. What do you suggest as a means to improve the unemployment problem of TVET
graduates and their employment status in general?

xxiii
 APPENDIX - E
B/ Interview Guide Questions for Micro and Small Scale Trade Development Office
1. Do you work together with Meserak TVET institution to organize the graduates in small
scale and micro trade organizations for loan provision service and other vital supports?
2. How many small scale industry cooperative (groups) are so far organized from Meserak
TVET graduates?
3. How of these cooperatives have got loans to purchase tools necessary for their business
and start production?
4. What is the source of loan for the organized groups and to what extent the graduates can
get the loan easily?
5. What are the major constraints that prevent the graduates from starting their own
business? What do you suggest to overcome these problems?
6. What shall be done to overcome the major constraints that MSEs faced at operation or
start- up level?

xxiv
 APPENDIX - F

D/ Interview Guide Questions for Entrepreneurial Course Instructors

1. What is your task regarding entrepreneurial skill development? What are the types of
course you have taught and the methods you have used to enrich entrepreneurial skill
development?
2. How do you evaluate about the profile of graduates regarding their academic
competence and their character in relation to entrepreneurship during their training?
3. In your own experience, for what reasons do the graduates choose self-employment?
And why others are unable to become self-employed?
4. How do you evaluate the importance of incorporating entrepreneurship education into
vocational education? In terms of promoting entrepreneurial mind-set in the graduates?
5. To what extent the trainees have been informed self-employment as an alternative career
option in the labor market?
6. What do you suggest for better improvements of entrepreneurship education to be taken
as a tool for creating employment opportunity of the graduates?

xxv
Declaration

This thesis is my original work and all sources of information used for study have been duly
acknowledged.
Name: _______________________________
Signature: _____________________________
Date: _________________________________

This thesis has been submitted for examination with my approval as a University advisor.
Name: ________________________________
Signature: _____________________________
Date: _________________________________