Study on Generating Employment through Micro and Small Enterprise and Cooperative Development in Lao PDR
4. Opportunities and Constraints : 4.1 Education and Skills Training

OPPORTUNITIES AND CONSTRAINTS

It can be argued that business success depends on two sets of factors: the owner's entrepreneurial skills, and a supportive business environment. This section looks at the different opportunities and constraints faced by micro/small enterprises: education, skills training, access to credit, quality and quantity of infrastructure, and government policy and regulatory framework. It also looks at the particular opportunities or constraints on female and male entrepreneurs and on entrepreneurs with disabilities.

4.1 Education and Skills Training

Education does not seem to be a significant factor in the ownership of a business: 24 per cent of small business owners have some secondary education. The figure for the total population is 23 per cent. However it does seem significant in business quality and expansion. About 80 per cent of owners with post-secondary education achieve some degree of expansion in their business compared to 37 per cent on average. Growth is also more likely when the enterprises are owned by older entrepreneurs rather than younger.

Most small business owners receive informal training from family members or friends. Indeed only about 5 per cent have formal vocational training. The majority of training however is technical rather than managerial and specific to certain kinds of enterprise. The most common skills acquired through training are in textiles, 25.5 per cent. Entrepreneurs also want skills in management, repair, and retail trading. More advanced entrepreneurs want to learn operational and marketing skills.

Skilled labour is scarce, and the labour market itself is small and not well diversified, and in some provinces, virtually non-existent. This impedes improvement in both the quantity and the quality of micro/small enterprise employment and self-employment.

In recent years the provision of adequate education has become a high priority. In its 2000 report 'Education Strategic Vision' the Government indicated the need to enforce compulsory primary education. It also set out a number of aims for the years 2000 to 2005: to increase net enrolment from 77 per cent to 85 per cent; to expand primary schools in ethnic minority and remote areas through multi-grade teaching and school clusters; to increase the literacy rate for the population aged 15-40 from 80 per cent to 85 per cent, and for the population aged 15 and below from 74 per cent to 80 per cent; and to increase lower secondary and upper secondary gross enrolments from 45 per cent to 52 per cent and 22 per cent to 24 per cent, respectively.

But there are serious concerns about the capacity of teachers, and both the formal and informal training systems, to match technical training to regional investment and labour markets. (Ministry of Education, the Education Strategic Vision (2000-2005), 2000.) Some technical and vocational schools have made improvements through the donor-assisted programmes: 'Motivation for Achievement' and 'Entrepreneurship Development' which add to the curriculum components dealing with self-employment and business start-ups. However, right across the board, skills' training faces funding and capacity limitations, as well as ethnic, cultural and linguistic challenges.

Minority and gender aspects of education and skills training. Rural entrepreneurs have fewer educational opportunities than those in urban areas. Less than 28 per cent of rural entrepreneurs have any secondary education compared to 48 per cent of urban entrepreneurs. More rural entrepreneurs than urban have no education, 19 per cent to 10 per cent. They also have fewer opportunities for vocational training, 1.8 per cent to 4.2 per cent.

Figure 14. Educational characteristics of micro/small enterprises: rural versus urban+

(Source: The results of a National Survey, SMEs in Lao PDR, MIH-GTZ 1996)

Females have less educational opportunities than males. In the MIH-GTZ 1996 survey 22 per cent of female entrepreneurs have received no education, 25 per cent have primary and 16 per cent lower education, 2 per cent have technical training, and 0.5 per cent have received higher education. The corresponding education levels for males are 12 per cent, 31 per cent, 21 per cent, 5 per cent, and 1.3 per cent.

Figure 15. Educational background of female versus male micro/small enterprise owners

(Source: The results of a National Survey, SMEs in Lao PDR, MIH-GTZ, 1996)

Traditional gender values have a profound effect on the economic potential of women. In most remote areas girls are discouraged from going to school and the educational attainment of women is seen as secondary to their household work. The literacy level of females has lagged significantly behind that of males until very recent years. In the National Census of 1995 the adult literacy rate for females was 44 per cent compared to 66 per cent for males. (Statistical Profiles of Least Developed Countries, UN Conference on Trade and Development, 2001.) This trend was reversed in 1998 when the female literacy rate apparently rose to 70 per cent. (UNTAD, Statistical Profiles of the LDCs, 2001; UNDP, HRD Report, 2000.) Such increases may reflect the ongoing campaign for women's education by the Lao Women's Union which has continually emphasized that 'the level of women's education is an important factor and a key indicator of the overall quality of people's participation in economic development.' (Lao Women's Union, 1996, p.7.)

Disability in relation to Education and Skills Training. Education and skills training opportunities for persons with disabilities have been extremely limited. The baseline 2001 study by Handicap International of 478 persons with disabilities found that of 99 children with disabilities, about 64 per cent had not gone to school. Overall, only 33 per cent of disabled school-aged children attended school regularly. Of these only one child attended an Integrated Education Programme (IEP) school. A 1999 survey of disabled children and adults indicated that 66 per cent of interviewees did not have access to any school, while 15 per cent were not allowed to attend school by their families.

Lack of access to schools was due to two main factors:

• Lack of facilities and teaching aids for such students in most schools and the difficulty of designing facilities suitable to a range of different disabilities.
   
• Lack of mobility aids for students with disabilities to reach schools on their own. Even the IEP School is not yet easily accessible.

The survey found that only 5.8 per cent of adults with disabilities had attended some kind of vocational training. All interviewees expressed the need and wish for further education, particularly for some kind of useful vocational training that would suit their particular kinds of disabilities. They expressed the hope of starting their own businesses and generating income through the new skills.

A number of local and international organizations assist persons with disabilities by providing skills training and by creating different kinds of income generation (refer Section Five). The Lao Disabled Person's Association offer lessons in sewing, traditional Lao massage, banana and galanga-leaf paper manufacture, woodcraft, and handicraft. However the majority of participants cannot put this training into practice because they lack the start-up capital for a business.

Another problem is that the products often are not of sufficient quality to meet market demand. That they are 'produced by handicapped people' is an insufficiently high value image to compensate for the lack of quality -- or may even appear to reduce it further. (Sivila, C., Board of Director, Lao Disabled People's Association, Vientiane Municipality, 2002.)

The National Centre for Medical Rehabilitation (NCMR) promotes rehabilitation training and vocational training for persons with disabilities. It has a special school for children who are visually or hearing impaired, and a Community-Based Rehabilitation Unit. Four centres of this unit have also been established in the provinces of Xieng Khouang, Louang Prabang, Sekong, and Champasack. (Douangngot, B. Head Secretariat, National Committee for Handicapped Persons, 2001.)

The organization, World Concern has initiated a Community-Based Rehabilitation Project in Salavan Province. This project focusses on both physical rehabilitation and income generation for persons with disabilities and their families. Persons with disabilities, who are able to work with some assistance from their families, are given loans to start animal husbandry activities. However some communication difficulties have arisen. There was an expectation on the part of some providers that results would be quicker and the loans repaid sooner than they were, while some recipients did not understand the nature of loans and treated them as gifts.

The Vocational Training Center in Ban Sikert offers a variety of training courses in Computers and Accounting, English Language Training, Agriculture, Animal Husbandry, Tailoring and Handicrafts, and Electronics. It started operating in 2000 and presently has 102 students with disabilities.

The Lao Handicapped Women and Children Association (LHWCA) seeks funds, support, and training from donors and in turn, provides training for women and children with disabilities. The main objective is to encourage self-sufficiency and reduce the 'burden on the party, the government, parents, and society.' (Handicap International & National Center for Medical Rehabilitation, Bridging the Gap: Survey of Disabled Children & Adults, June 1999.)

A number of vocational, literacy and training projects have been launched in the poorer areas of Laos to increase educational opportunities and develop the skills of persons with disabilities. These projects use a variety of special approaches to target people between the ages of 15 and 40 who have dropped out of school or have no access to education. One of these, the Community-Based Rehabilitation Project has facilitated the active participation of a large number of communities thus ensuring the long-term sustainability of activities. However they continue to have problems such as the absence of qualified personnel to carry out the vocational skills training, and the lack of linkage between technical training and actually starting a micro-enterprise. (ibid.)

4. Opportunities and Constraints : 4.1 Education and Skills Training
Study on Generating Employment through Micro and Small Enterprise and Cooperative Development in Lao PDR

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