LINKING WORK, SKILLS AND KNOWLEDGE:
LEARNING FOR SURVIVAL AND GROWTH
10-12 September 2001, Interlaken
Working Group 4:
What skills are needed to ensure survival and growth of enterprises?
The dimensions of poverty, gender and youth
by
Amelita King Dejardin

IFP/SKILLS, ILO, Geneva

Implications for informal micro enterprises

Knowledge, measured in terms of literacy and years of schooling, is universally accepted as one basic element of material well-being that is linked to other dimensions of poverty that are tangible, (e.g. in nutrition, health, access to productive resources and assets), and intangible, such as social networks, power and autonomy. Vulnerability to risks and uncertainties, and social exclusion are reinforced by deprivation in economic, social and political resources.

Women and men, in the same community, geographical area or income group, face similar disadvantages and risks that could lead them into poverty and social exclusion. However, norms about women’s and men’s roles, division of labour and entitlements lead further to gender inequalities and discrimination of women in education, training and the labour market. These processes make women more vulnerable to falling into poverty.

Material and social disadvantages often begin at an early age, in childhood and adolescence, sometimes at birth. Young individuals from poor households are caught in a vicious cycle where deficiencies in basic education, lack of vocational training opportunities, little chance of finding a job, and, if they do, the likelihood that this is precarious with little future or skills advantage, all act together to further deepen their social exclusion.

Employment and production in the "informal economy" have provided young and adult women and men from poor households and communities the sole means of survival. While there are informal micro enterprises that are growth-oriented and profitable, the great majority of informal activities are at subsistence level and are precarious.

Women represent an important proportion of owner-operators and workers of survival-oriented enterprises (term used loosely to refer to productive, income-earning activities or units), using family labour and traditional technology, and relying heavily on local natural resources. Even within sub-sectors where both men and women owner-operators are found, men’s activities tend to be larger in capital and returns. Because of the sheer number of women engaged in informal work, efforts to assist the informal sector have sometimes been regarded as gender responsiveness. However, the links between informal work and gender go beyond numbers. And skills and enterprise development strategies in this area will have to do more than target women.

Gender relations, within the family, household and community, partly determine differences in the way men and women allocate their labour time and limited resources, respond to markets and manage risks; their investment thresholds; how income from productive and paid work is used and who has a say; etc.

For women in male-headed households in many developing countries, successful negotiation with the male head (usually husband) regarding production resources can be paramount for survival. Women’s lack of control over their own production and income is a source of insecurity and affects investment decisions. Being the manager or operator of one’s business does not necessarily imply the power to decide how income would be used. For example, among garment makers in Ahmedabad, women were less likely to control their enterprise income (husbands tended to have the final say), the higher their earnings (Kantor, 2000). In case studies of informal settlements and townships in Durban South Africa, men saw themselves as owners (where they provided the start-up capital) or overall managers of enterprises even while their wives managed on a daily basis, and expected (as did the women) their wives’ earnings to be spent on household needs (C. Cross et al, 2000 draft).

Women’s income is more like to be used for daily sustenance, such that rarely is there a surplus. Thus, women with older children, women heads of households, and women who customarily trade (e.g. Ghana) are more likely to reach an investment threshold than young wives with under-5 year-old children and a huge reproductive burden (Von Massow, 1999). Men might reach investment thresholds faster than women.

Resource-poor women and men typically diversify to spread risk and to meet needs over the year. However, it has also been observed that women pursue even lower-risk subsistence strategies in order to allow men to take greater risks, or to absorb the effects of the decline in men’s secure wages.

Informal networks of support among women and men are known to play important functions in the informal economy and in resource-poor communities. In Africa, for example, these networks, often kinship-based, involve labour exchange and sharing (including child care), bartering and sales on credit (Von Massow, 1999:95-106). Women’s networks of mutual obligation are meant to help them cope with simultaneous demands of their reproductive, productive and community management roles, and enables women’s "survivalist" enterprises to take place. In such contexts, women’s enterprise income and turnover are intertwined with household and community consumption and shortages.

As regards skills, these tend to be passed along gender lines rather than learned in formal institutions. A by-product is gender stereotyping of productive roles, men tending towards activities with higher returns. In West Africa, career paths to own-account work are different for young women and young men (Birks et al, 1994). The former, who are channelled into "less attractive" activities (i.e. irregular income, arduous, less in technical content, not using electric power, ease of entry; e.g. such as soap making, meal provision, food preparation), had much shorter periods of formal schooling, apprenticeship and wage work, but longer periods of family helping as compared to men. "More attractive" activities, such as car and TV repair, metal working, wooden furniture making and hairdressing, were preceded by apprenticeship and wage work. Traditional and informal apprenticeship is predominant in technical trades, i.e. an average 60 percent or more of workers in West Africa (Birks et al, 1994). Enterprises run by women have on average significantly fewer apprentices but more family helpers than establishments run by men. Wage work, also man’s domain, provides much needed start-up capital and work experience.

The Background Paper to this Conference notes that there is "a vast gap between endorsing poverty alleviation in principle and alleviating poverty in practice." In spite of intent and prescriptions over the past decade, the widely held view is that vocational education and training (VET) among poor sectors is largely non-existent, or that it has had no significant contribution to poverty reduction.

For example, an assessment of training policies, institutions and programmes in Eastern Africa concludes that the training sector has made little progress since 1987 with regards to addressing the informal sector, although some changes and innovations are on-going (Haan, 2000 draft). Given huge constraints, training institutions are able to reach only a tiny portion of the target population. There is little information on training needs of informal sector operators; training results in terms of good and employable skills appear low; very little is known about the fate of trainees and the usefulness of skills imparted. In spite of wide recognition of the need to reduce gender-based disadvantages in skills and skills training, vocational education and training policies and programmes largely continue to bypass low-income women or to train them in domestic, traditional and low-remunerative skills.

The unequal participation of poor women in programmes of formal vocational education and training institutions in Africa, Asia and Latin America, and the factors that have led to this are well documented (Goodale, 1989; ILO, 2000). Formal education and training promote and perpetuate stereotypes and occupational/skills segregation. VET programmes discriminate, indirectly or directly, against young and adult women for the following reasons: standard courses geared for the formal waged jobs or for "male" occupations; high entry requirements; methodology based on literacy and numeracy; training delivered in centres and at hours inconvenient for girls and women with household responsibilities; training facilities and classroom environment unfriendly to young women. Self-employment programmes for women of poor households tend to limit their economic opportunities to small subsistence income-generating activities that reinforce their secondary income-earning role and do not promote financial autonomy.

As regards training for youths, an assessment of relevant programmes in Latin America concludes that most VET institutions effectively exclude most young people from poor households because these primarily train adults, and among them, those already employed, while poor young men and women tend to be inactive or unemployed (Gallart, 2000a). Moreover, VET institutions focus on specific occupational training, although young people of poor households lack basic general education having left primary school early. The poor gain access where training programmes are located in areas with high poverty incidence. As regards special programmes targeting youths, the main weakness is their little relevance to the labour market.

Against this backdrop, there have been important initiatives, pilot projects and large-scale programmes in the recent decade geared towards building competencies of the poor. One can benefit from these diverse experiences to chart future directions for skills development for poverty alleviation. A few of these initiatives fall within the vocational training sector and involve VET institutions, and but many are part of broader actions that address the multiple, interlinked dimensions of poverty and social exclusion. The amount of lessons we can learn from these experiences is limited by the usual problem of scarcity of data on impact, sustainability, and success and failure factors. Nevertheless, a few interesting ones seem worthwhile pursuing for further collective examination and elaboration.

In Latin America, a number of training or education programmes target adult women from poor households and communities, such as the "Proyecto Camayagua de Educación para el Trabajo (POCET) in Honduras, the "Programa de Formación para el Trabajo dirigido a Mujeres Jefas de Familia" (PMJH) in Chile, and a pilot project "Capacitación Profesional de la Mujer" in Bolivia (ILO, 2001 forthcoming). All three involve the national training institution in the role of initiator or major collaborator together with other public institutions and regional and/or municipal authorities. Common threads run through these programmes: (a) oriented towards gainful work, but training goes beyond vocational training for a specific trade and covers a range of social competencies, (b) efforts to diversify women’s occupations and break stereotypes; (c) importance given to developing women’s autonomy; (d) multi-dimensional services that meet women’s practical needs and household constraints; and (e) gender equality perspective.

Let us focus on Chile’s PMJH which completed its first phase in 1992-1997 and has been on its second phase since 1998. The programme has reached a total of 245,000 women; in 1998, the total coverage was 37,000 women in 86 municipalities; and in 2001, estimated reach would be 63,000 women. The PJMH approach consists of five elements: technical training and apprenticeship for wage or self-employment, upgrade of basic and intermediary educational levels, development of social competencies necessary for work and sense of autonomy, child care services and access to basic needs. Based on the Programme’s evaluation and monitoring results, achievements are:

women’s employment: of all women trained under the programme, 66.5 percent have been employed, 16.5 percent, unemployed but looking for work, and 16.7 percent inactive; comparative figures for the control group are 58.5 percent, 12.7 percent and 28.2 percent, respectively. Improvements in women’s employment could be seen in terms of increase in daily work, decrease in occasional work, or increase in wage earners.

women’s personal development: women valued the most was the increase in their autonomy, information obtained about institutional networks necessary for job search, and a personal capacity to sit for interviews and apply for work.

institutional development: municipal government’s coordinating role and cooperation among public entities as regards employment and training have been reinforced; the need for differentiated services and policies to meet different needs of population was demonstrated to ministries which are used to providing standardized services.

public policy: visibility of the distinct problem faced by women heads of poor households and recognition as an issue for social policy.

Alongside these achievements, some issues remain to be addressed:

interface between supply and demand - this was the task of technical training institutes (private companies, foundations, universities) which proposed and bid for specific training contracts and were expected to have direct relations with the private sector. The involvement of private enterprises proved difficult to advance and maintain; many enterprises still had not recognized the programme or were solely interested in it as far as it provided cheap labour.

segmentation in the labour market- efforts to train women in "male" jobs in order to break labour market segregation did not achieve desired results; enterprises were reluctant to hire women in such jobs.

institutionalization of gender policies - actions that addressed women were limited to those that concerned the poor. Outside of PJMH and other women-specific programmes, a public gender policy in vocational training had yet to be adopted. Apart from SENCE and the Health Ministry, other public institutions did not have women-specific programmes outside of their involvement in PJMH.

financing - sustained and sufficient support still being searched.

The work of the International Labour Office (ILO) with women in situations of poverty and social exclusion (e.g. landless women from scheduled castes in India women, women in rural, relatively isolated villages of Tanzania, female heads of households in South Asia, homeworkers in Asia) provide another set of insights into the links between poverty, work and skills. Among these women, productive work is not solely a question of possession or not of appropriate technical and managerial skills. The poverty of their work is the outcome of unequal access to and control over productive assets and services, over the productive process itself and over income earned; it reflects women’s social and economic relations with other actors who are part of the same production process, market, trade, etc. The ILO’s approach may be characterised as consisting of two prongs: (a) income-and employment generation to meet practical needs in a viable, sustainable way - through technical training and extension services in new production technologies, diversified trades, product and market development, and business management; micro financial services; and market assistance; and (b) empowerment of women to initiate and take action, and promote or defend their interests - by building women’s self-confidence, leadership, advocacy and self-organizational competencies; facilitating their organizations, networks and collective actions; raising their literacy on rights; and linking them up with institutions and government bodies, and making the latter more cognizant of poor women’s situation. For sure, the approach is easier described than done; it implies change in social and economic behaviour and relations, that is long, slow and often meets resistance.

The Action to Assist Rural Women in Tanzania is an example of the above-mentioned approach. It was implemented in 16 villages in Mufindi District, Iringa Region, directly involved over 500 women, over a span of 10 years, although significant changes only really began to occur in the last five years. The area was resource-poor, with limited accessibility due to poor transport infrastructure. The reach of local government technical extension services was constrained by inadequate resources and male bias. A few notes on the project strategy:

Diversification of productive activities beyond maize farming (which was necessary for food provisioning but highly vulnerable to drought) and beer brewing was critical to improving and securing incomes, but not easy in far-flung villages. Deliberate efforts were taken to introduce women to these new ventures; most often, relatively younger and better educated women were more prepared to try them, although women in general were much less wary of non-traditional, non-farm activities by the time the project closed. The choice of technical skills was based on women’s interests and needs and on market opportunities; and consisted of a participatory deliberation among the women concerned, project staff and local specialists or extension workers.

To enable women to make these and future business choices on their own, short sessions and technical advisory services disseminated knowledge and skills in market analysis and business management.

To build women’s capacity for self-organization and self-management, women were motivated and trained to form small groups which provided the fora for mutual help, learning and reflection, savings, common productive facilities; they then formed Women’s Executive Committees (WECs) which united and coordinated small groups at village level; and chose Grassroots Trainers-Animators (GTAs) from among themselves who were trained and advised on how to assist women in the villages, lobby with village and ward leaders for resources, and network with local institutions.

Training in the wide range of business management, organizational, leadership and social competencies was done gradually and incrementally, in small doses, alongside practical experience, and group discussions. Simple methods, materials and language were used in training delivery. In 2000, the women produced their own "How-To Manual"covering competencies that they had acquired from business identification to conducting group meetings and networking.

It was necessary to mobilize the interest and support of the district government, and local institutions and experts in Iringa, and link them with the women’s groups.

At the end of 1999, the following had been achieved:

productive activities and incomes - diversified activities including mushroom growing, bee-keeping, fish ponds, timber preparation and trading, tearooms and kiosks, and horticulture. Incomes increased (in some cases by 100 %) or became more secure; and women were able to save regularly for school fees and emergencies.

income-generating capacity - women could analyse for themselves which activities would be profitable, and showed greater confidence in choosing non-traditional activities and new technologies.

organizational capacity - GTAs and WECs carried out many of the project activities, e.g. ensuring availability of government extension services, organising support for income-generating activities, mobilising savings, forming new groups, providing training and advice to members in business implementation, report writing and leadership; and a district-wide organization consisting of all the WECs had been established.

impact on family - as women had become important co-contributors to family income, they exercised greater say over income use.

impact on community - communities provided assistance to women’s groups such as dam building, farm clearing and project houses; village councils allocate land directly to women for productive activities; women leaders sat on village and ward councils.

Unlike rural women, homeworkers constitute an invisible segment of the informal economy. They are not self-employed, although they might sell directly to the market at certain times; nor are they recognized as wage workers by the formal enterprises and their agents who subcontract production to them. As far as available statistics go, homeworkers are not substantial in relation to the total population of informal home-based workers, but they represent important and increasing segment of certain labour-intensive manufacturing sectors (e.g. garments and textile products, leather goods, small metal products, bamboo and wood products, handicrafts, soldering of microchips, simple assembly). Being at the invisible end of the commodity chain, they are most often left with the least share of returns to labour; income is precarious; social benefits, non-existent. Homeworkers’ vulnerability lie in their weak bargaining position vis-a-vis subcontractors and middlemen, little information about their labour and product markets, limited or no skills transfer, inadequate or ineffective legal protection from unfair labour practices, and lack of public recognition of their situation.

To address the complex issues of homework, the ILO’s pilot initiatives in India, Thailand, the Philippines and Indonesia, have elaborated a multi-pronged strategy that combines employment promotion, social protection, homeworkers’ organization, and policy advocacy.

For homeworkers, improved employment and income prospects consisted of either (a) owning an own-account business that will reduce their dependency on subcontractors and middlemen, and/or (b) upscaling their technical and management ability, as an individual entrepreneur or group-based production unit, to compete for job orders (subcontracts) at reasonable returns to labour and investment. Evidently, the development of technical and entrepreneurial skills has figured as an important instrument in these pilot initiatives - for improving production and productivity, product designs, product quality, and initiating new business ventures. Skills development has been done through punctual, practical training courses, on-site extension of advisory services by specialists, transfer of new technologies, study visits of innovative production sites, and participation in trade fairs.

The results of entrepreneurship and technical skills development in Thailand, the Philippines and Indonesia, has been uneven. Country experiences saw punctual successes in homeworkers’ enterprise performance, either as groups or individuals, e.g. new or complementary sources of income; better or new products; increase in sales revenue or profit margin; job orders for group production; independent marketing or business to augment income from homework. Some groups had greater difficulty in launching new initiatives. Of the three countries, Thailand demonstrated substantial progress in enterprise development, and this may be attributed to the business, market and product development orientation of the non-governmental and governmental organizations that assisted the homeworkers and the country’s upbeat export performance.

As regards sustainability or permanent viability of homeworkers’ income, trade or enterprise ventures, this has been difficult to track and achieve, mainly because markets are constantly changing. Homeworkers’ business ventures have had to deal with the entry of cheap imports from neighbouring countries (e.g. China), the tremendous increase of people wanting to set up their own business, decline in export demand, increased prices of raw materials, devaluation of local currency, etc. Most homeworkers are not business-oriented enough to deal constantly with these challenges, in spite of skills training. Relatively successful and dynamic groups that I had met in the Philippines, Indonesia and Thailand had the benefit of a few members and leaders who had entrepreneurial savvy, were naturally innovative and creative, and possessed product quality awareness (perhaps due to previous factory experience).

National networks of homeworkers and local and national institutions which could provide them support were established with assistance from the ILO and non-governmental organizations in the period 1989-1994. Since then, these networks have led or sustained actions to assist homeworkers, to mobilize institutional support and resources, and to raise public awareness about homework issues. In the light of the range of functions these networks have had to fulfil, the range of competencies they require is equally impressive. Needless to say, capacity building for these networks is still an on-going process. Financial sustainability and autonomy are critical problems faced by all three networks.

Youth-specific employment programmes along the Chile Joven model represent one category of experiences in Latin America (Argentina, Chile Peru and Colombia). Training programmes are executed by private and public institutions, selected through bidding; and funded from a common fund mainly sourced internationally. By combining short training courses in semi-skilled jobs, apprenticeship of similar duration in private enterprises, and close collaboration with employers’ organizations, these programmes have enhanced the direct relevance of training to the labour market, and facilitated the youth’s links with the formal sector. Nevertheless, impact studies have shown a number of weaknesses which might explain the slight impact on employability of trained graduates in comparison to control groups: a) while majority of beneficiaries come from households below the poverty line, trainees selected are those with comparatively less deficiencies (e.g. have reached but not completed secondary school) and thus more likely to find work after training; b) training does not include competencies necessary for youths to overcome other sources of vulnerability, such as social competencies (e.g. punctuality, responsibility, how to behave in job interviews); c) courses do not channel youths into career paths for skilled, better quality jobs, but rather in precarious occupations; and d) teaching staff of institutions that implement the programme are not prepared to work with the target group.

Up to May 1998, it has trained more than 100,000 youths who have undergone apprenticeship in 21,928 enterprises (Gallart, 2000b). The target group was defined as: 16-29 years of age; complete secondary education as maximum level but in general incomplete secondary level or less; unemployed or underemployed with little or no work experience; from low-income groups. The profile of actual beneficiaries in Buenos Aires metropolitan area generally matched the target profile.

Training courses were delivered by public and private institutions that had been registered with the Labour Ministry and whose capacity to provide a specific course had been examined and classified. These institutions could be non-educational public entities, foundations, associations and cooperatives, educational institutions, chambers and confederations, trade unions, enterprises. They were required to present a document of intent by organizations of private enterprises to provide apprenticeships to graduates of training courses.

As regards actual courses offered, most were for jobs in the tertiary sector (gastronomy, health, supermarket), and accounting and administration. Proyecto Joven may be regarded as having succeeded in introducing courses different from standard offerings (e.g. plumbing, sewing) and linked to specific labour market demand.

Weaknesses that have been identified by training institutions:

bidding procedures - irregularities; long delays between bidding, awards and delivery of courses which led to retraction of apprenticeship offers by enterprises

enterprises - insufficient motivation to participate; interest linked essentially to benefits of free training; have sometimes rejected trainees who have not completed secondary education or who did not meet suitable physical attributes for front-line jobs

beneficiaries - drop-out, among others, due to personality traits of youths, previous negative experiences, offer of higher pay than that given by Proyecto Joven.

Non-formal education programmes for disadvantaged children and youths in Francophone countries of Sub-Sahara Africa provide similar lessons. An extensive state-of the art review identifies their key features (Fanny Chauveau, 1998): a) importance placed on the development of autonomy, a capacity to direct their life, analyse and solve problems, initiate individual or collective actions; b) participatory approach, which gives participants a say in elaborating the educational content and evaluating results; c) educational process and content that take into account the whole environment of youths concerned, including family, community, work; d) education and training that include literacy and numeracy, and skills and knowledge required by a profession and work situation; e) adaptation of training delivery to distinct constraints faced by youths engaged in urban informal and agricultural activities; f) creation of small income-generating activities to meet practical needs during education and training; g) individualised follow-up during training; and h) post-training follow-up. As in many developing countries, these approaches have entailed non-conventional institutional actors and arrangements: role of NGOs in initiating and testing innovations; role of communities in supporting and managing non-formal educational projects (e.g. "écoles communautaires" in south of Mali, upper valley of Niger, valley of river of Senegal that are supported by villages and associations of parents), collaboration between government agencies, NGOs and local communities.

Vocational education and training, if it is to address poverty in practice, must be part of a poverty agenda and strategically linked to other poverty-reduction actions.

Skills training has to go beyond occupational skills training for a specific trade or profession, even if this meets a current niche in the labour market. The multidimensional nature of poverty, vulnerability and social exclusion, as well as the fluidity and flexibility of labour markets, require that the poor receive general education and training in a range of social competencies. Leadership, advocacy and organizational competencies are critical in enabling the poor to manage and overcome unequal economic and social relations related to work status, gender, age, race, ethnicity or caste.

In the same vein, skills development among enterprises of the poor has to go beyond entrepreneurship or business management and technical skills training. Their labour and capital investments, incentives, risks, and returns cannot be solely attributed to skills deficiencies. As the earlier section exposed, these "business" decisions and outcomes are inextricably linked to the gender-based division of labour and access/control over resources and assets, and to patterns of economic and social relations between the micro entrepreneur and other actors in the trade or market.

Micro enterprise programmes focus on the visible operator or entrepreneur, and tend to forget paid and unpaid workers, the people who work "behind the scenes, most of whom are women and children. Since most informal units are household based and interlinked with household fortunes, skills development should perhaps address whole households. There is definitely a need to pay greater attention to the career paths of young unpaid family helpers, especially girls.

Skills training must have an explicit gender equality agenda. Gender biases that are rooted in cultural norms and values are reproduced and reinforced by training institutions, by the nature of their curricula, training materials, modalities of training provision, ways by which skills or competencies are defined, the views and behaviour of teaching staff, policy and regulations, etc.

VET institutions need to work with other institutions and organizations which have the reach, capacity and experience in working with the poor and socially excluded populations.

Development of competencies, especially non-occupational skills, should follow an incremental process, with training in small doses alongside practical experience. The absorptive capacity of the target population usually cannot taken in huge amounts of new concepts and methods in one stroke.

There is no generic "poor", or "poor youth or "poor woman". Strategies and methods should be fashioned according to their differentiated needs and situations.

Among the poor, the likelihood of success is higher among those with a better edge, e.g. some secondary education, age-youthfulness, natural aptitude for entrepreneurship, creativity, work experience. They are valuable assets for group-based ventures.