03 lao pdr tracer study and impact assessment synthesis

Tracer Study of KAB Graduates and
Impact Assessment of KAB Programme in Lao PDR
Prepared by: Enterprise & Development Consultants Co., Ltd
OCTOBER 2009 – JANUARY 2010
A. Background
In 2008, Laos PDR was selected as one of the pilot countries to participate in an impact assessment of the ILO
“Know About Business” (KAB) Programme. The assessments were designed to help the KAB programme better
assess its impact on the lives of young women and men and identify areas for improvement for the
programme. The ILO’s KAB programme for entrepreneurship education has been implemented in vocational
and technical schools in Lao PDR since the 2005/2006 school year. The Ministry of Education (MoE), the Lao-
Indian Business owner/entrepreneurship Development Centre (LIEDC) and the ILO collaborated in introducing
entrepreneurship education to Lao PDR. Since the first training of teachers in August 2005, 145 teachers from
20 vocational schools have been trained in KAB. The schools have in turn trained 23,044 students in KAB.

B. Objectives of the study and methodology
The tracer study of KAB graduates and impact assessment of the KAB programme (hereinafter called the
Study) aimed to:
•Better understand if and how KAB may have contributed to preparing young women and men to become
enterprising in their lives and professional career, as business owners or as employees; and
• Provide useful information for decision making with respect to scaling up, as well as improving, the KAB
programme in Lao PDR.

Methodology
The study findings are drawn from a combination of both quantitative and qualitative methodologies.
The quantitative questionnaire was administered to two samples of 250 graduates drawn from 6 Training and
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Vocational Institutions . The first sample consisted of former KAB students. 100 of these were business owners
while the remaining 150 were employees at the time of the survey. Like-wise, another sample was drawn of
250 former students who had not participated in the KAB programme- 100 of them business owners, and 150
of them employees.

Two questionnaires were administered. One specifically targeted at business owners, the other at employees.
The questionnaires had a common set of questions as well as specific questions related to their employment
status (whether business owners or employees)

The KAB group was made up of graduates who had taken part in KAB between 2005 (after it was first
introduced in Lao PDR) and 2008. The non-KAB sample group was initially intended to consist of graduates
from before KAB was introduced in Lao PDR (i.e. 2002-2004), but outdated or unavailable contact information
meant that it was impossible to reach the 100 person target sample size using this group alone. It was
therefore decided that the sample group would also include students who attended the same institutions after
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the 2005 programme introduction but who did not take the KAB programme .

Radom sampling was tried from the available records of 6 vocational and technical schools. However,
additional contact lists were sought by LIEDC as well as on-the-ground searches due to difficulties tracking
down the graduates from the records. In the end over 1500 persons were contacted to take part in the survey
and 500 were the final number willing or able to participate.
The qualitative survey consisted of five focus group discussions with both former and current KAB graduates,
parents of KAB business owners, employers and teachers. The groups gathered between 6 and 11 people.

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The six Technical and Vocational schools were : Pakpasak Technical College, Vientiane Technical School, Khammouane
Technical School, Savannakhet Technical School and Champasak Technical and Vocational School
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For instance because they were night school attendees and did not have the opportunity to attend KAB, or were unable
to attend KAB courses for other reasons

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Former KAB graduates were selected as to have gender balance as well as a proportionate representation of
business sectors. Finally, five case studies were prepared based on KAB graduates who currently run different
enterprises.

Challenges
The study team was supported through the entire process by the various Vocational and Technical schools,
each of which spoke highly of the KAB programme. It was also very helpful that LIEDC had close contact with
these schools (through KAB training provision and follow-ups) and presence in different provinces. This was
especially useful when the samples were expanded on a short notice.

However, and despite the large number of graduates from the 6 schools participating, there was no proper
database in place that could assist in the tracing process for the study team. The only contacts available were
for those that graduated in recent years. The contact numbers, when available, were only cell phone numbers
of graduates, not emergency contact information from relatives. Most of the cell phones were not in use. The
‘word of mouth’ among teachers of the schools and the interviewees was a very useful approach tool for
identifying how to contact students for this tracer study.

The study team unexpectedly faced a shortage of KAB and Non-KAB business owner samples in the location
initially specified, i.e Vientiane Capital, which was overcome by extending the locations to nearby provinces
which contained graduates that the survey targeted. EDC’s presence in the provinces was key in making this
possible.

C. Findings
Profiles for the KAB and Non-KAB graduates
Gender composition: The percentage of females was higher than for males for the business owner group (both
KAB and non-KAB). Meanwhile, there were was a higher percentage of males in the group of employees.

Age group: The majority of graduates were between 20 and 30 years old

Graduation year: While KAB graduates graduated between 2004 and 2005, Non-KAB graduates surveyed had
graduated between 2004-2005 or 2006-2007.

Institutions attended: All of KAB and Non-KAB employees were graduates of Pakpasak Technical College based
in Vientiane capital. The majority of the KAB business owners, 78%, were graduates of Pakpasak Technical
College, and the remaining 22% were graduates of the other five Technical schools. Meanwhile, one third of
Non-KAB business owners were graduates of Pakpasak Technical College, and the other two thirds were
graduates of the other five Technical schools.

Tracing KAB and Non-KAB business owners
1.1 Business background and characteristics
About half of the KAB and Non-KAB business owners were employees before starting their own businesses.
The KAB business owners started a business sooner than the non-KAB but they also seemed to come from a
more family business environment than Non-KAB business owners. There was a greater propensity of KAB
business owners to prepare business plans for their respective businesses than Non-KAB business owners, with
46% for KAB and 26% for Non-KAB respondents.

Lower levels of business registration can be seen for businesses owned by KAB business owners. Retail trade is
the common business venture for both KAB and Non-KAB business owners; followed by the service sector. 95%
of the ventures were micro-scale with the majority employing 2-3 employees.

1.2 Factors that influenced the decision to start a business
KAB graduates stated having been convinced they wanted to be self-employed “during their studies” (so when
they followed KAB programme and other courses) at a higher rate than Non-KAB. It increased both their
technical and entrepreneurial confidence. The Non-KAB graduates’ desire to start a business also began during
their student life, but they seemed to have also been pushed when they faced difficulties trying to secure
employment.

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Becoming self-employed was considered to be “opportunity driven” for both KAB and Non-KAB business
owners. The fact that KAB business owners more often come from families with businesses was another
influential factor in the decision to start a business. In addition, the KAB business owners were also inspired by
seeing other successful businesses and thinking they could do the same.

1.3 Performance, challenges and future plan
On average, the KAB business owners engaged in full-time business at a lower rate than Non-KAB. They also
spent fewer hours per week than Non-KAB for both full-time and part-time work. And they assessed their
business success at a higher rate than Non-KAB.

Gender wise, more male than female business owners rated their business performance as highly successful in
both groups of KAB and Non-KAB business owners. However, when successful and highly successful categories
were combined, the gender difference became insignificant.

Lack of access to start-up capital and competition are the main challenges of both KAB and Non-KAB business
owner/entrepreneurs

Both KAB and Non-KAB business owners plan business expansions, especially by means of premises expansion
and developing new products/services.

Tracing KAB and Non-KAB employees
2.1 Employment background
KAB and Non-KAB employees who graduated from 2004-2005 onwards have mainly remained with their post-
graduation employer. When divided by graduation year the trend remains, with more than half of the
graduates from each cohort remaining with their first employer.

Almost 90% of both KAB and Non-KAB employees have no remarkable responsibility in their organisations. The
majority of them work in service sector.

2.2 Professional development and future career plan
Half of the KAB employees considered their employment career as “somewhat successful”; and this holds true
for Non-KAB employees but to a lesser extent, 43%.

A higher percentage of KAB employees have tried running their own businesses compared to Non-KAB
employees, but their success rates have been lower.

The reason stated by those interviewed (both KAB and Non-KAB employees) for not continuing their business
was their “own decision to become an employee”; this was followed by “not having enough time”; and “being
offered a job”.

Both KAB and Non-KAB employees have a desire to start own business and become self-employed in the
future, with approximately 90% of responses for both groups. However, the level of confidence they have in
their existing knowledge and skills to start a business is relatively low for both groups.
Overwhelmingly, KAB and Non-KAB employees stated that they would develop a business plan before starting
a business in the future.

KAB and Non-KAB employees stated that they would develop a business plan before starting a business in the
future, with 96.7% and 95.3% of KAB and Non-KAB employees stated that they would do so.

The KAB programme was given credit for helping KAB employees gain confidence, much more than other
business or entrepreneurship courses that were taken by Non-KAB employees. Those who did not have
confidence in their level of knowledge and skills, stated the need for further develop knowledge and skills,
such as in marketing, finance and human resources to be able to start a business. The need for this is high
among both Non-KAB and KAB respondents.

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Assessment of the KAB Programme
3.1 Assessment from KAB business owners
Almost all KAB business owners assessed the course as “very useful” and “useful”. The course gave them
“confidence”, and helped them understand “how to calculate risks and see business opportunities” were
frequently mentioned responses.

Above all, the KAB course inspired KAB business owners to see business opportunities, while the general
education curriculum of the school inspired Non-KAB business owner/entrepreneurs to be role models for
others.

84% of the KAB graduates who are business owners said they would recommend the KAB course to others. In
the focus group discussion with 7 KAB business owner/entrepreneurs, all of them agreed that the
topics/activities included in the KAB programme were extremely helpful to their current job as business
owners.

3.2 Assessment from KAB employees
A high rate of KAB employees considered the KAB course to be “very helpful” and “helpful” in preparing them
to be better employees. 96% of the KAB employees would recommend the KAB course to others.

The focus group discussion conducted with 9 KAB employees also confirmed the usefulness and application of
the KAB course for KAB employees. One participant said: “As an employee one needs to have certain qualities
and I found that they are the qualities that I was taught in the KAB class -- especially the characteristics of
entrepreneurs, such as having knowledge and skills in the chosen field of work…”

The KAB employees who participated in the focus group discussion acknowledged that the KAB course
stimulated their thinking about becoming a business owner in the future. 8 out of 9 participants in the focus
group said they planned to start their own businesses in the near future and about 5 of them mentioned being
already casually engaged in running a business. They will probably do it full-time in the future.

3.3 Assessment from current KAB students
The KAB course stimulated students currently undertaking the course in terms of their thinking, curiosity about
business, and confidence in running their own business. The course is generally easily understood by students,
as topics relate to their daily lives, and the methods used maximise their understanding

3.4 Assessment from parents and relatives of KAB business owners:
Generally, the parents of KAB business owner/entrepreneurs recognised the usefulness of KAB programme. It
influenced their children’s and relatives’ thinking, behaviour and decision to start a business in many different
ways: their sons and daughters became more mature, acquired necessary knowledge and skills, and developed
more desire and confidence in running a business. The KAB business owner/entrepreneurs also discussed their
desires to start a business with their parents or relatives.

The families of the KAB business owners have benefited from their children/relatives in terms of extra income
generation, and job creation in addition to self-financing by the KAB business owner.

3.5 Assessment from teachers/trainers of KAB programme:
From the perspective of teachers who teach the KAB course, the course contains rich and wide knowledge and
is very practical as it relates to real life situations. They stated liking most of the topics included in the
programme as well as the methods used.

Experiences in teaching KAB courses brought about new teaching methods, new subjects to integrate in other
technical and vocational subjects, and increased confidence among the teachers.
There are challenges for teachers in delivering the KAB course, especially how to elicit interest from the
students who are already in employment; and the use of curriculum at the discretion of teachers.

D. General recommendations

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Recommendations to the Academic Institutions
Both KAB and Non-KAB business owners (with a higher rate for the former) suggested that the
general education of Technical and Vocational schools should be more practical and contain less
lecturing. The KAB business owners also suggested more time should be allocated for the
entrepreneurship/KAB course, while the Non-KAB suggested this course should be compulsory for all
students.

Nearly half of all employees (KAB and Non-KAB) as well as Non-KAB business owners suggested
academic institutions improve their curriculum The KAB business owners on the other hand,
suggested more often upgrading teachers’ quality and teaching methods improvement more often
than other issues.

2. Recommendations to the KAB programme
The recommendations of how the KAB programme could be improved were drawn from the comments of KAB
graduates who participated in the questionnaire survey, in addition to those from the 5 focus group
discussions: KAB teachers, KAB business owner/entrepreneurs, KAB employees, current KAB students, and
parents and relatives of KAB business. They are summarised as following:

Curriculum
• The KAB programme should be taught in two semesters (rather than one, as is currently the case) in the
second year of the 3-year technical school programme.
• Allocate a small amount of money to use as a prize for a “business plan contest” for final year students
• The KAB curriculum should be published as one book (for the existing 32-hour course) to be used by every
KAB teacher
• The curriculum should have more real-l-life examples, stories and case studies as the teachers found it
difficult to develop/formulate their own
• Increase teaching hours for KAB from the current 2 hours, to 3 or 4 hours per week
• More time should be allocated to the KAB course
• Put more emphasis on topics such as: Marketing, Sales techniques, Customer Relationship Management, and
Business planning. A course about investment law should be also be added to the KAB course
• There should be better explanations (a glossary) for certain vocabulary such as Skills, Enterprise,
Entrepreneur(ship), and Business, presented in a clearly and understandable way

Teachers’ quality
• Upgrade skills and knowledge of the KAB teachers.
• KAB teachers should be upgraded/trained for a deeper knowledge about entrepreneurship and how to teach
it.
• The KAB teachers should also have experience in running a business

Teaching Methodology
• Field visits
• More time for group discussions
• More time for activities
• More practical activities and simulation games that link to real business venture operations
• Invite guest speakers who are successful in running a business from small scale to large scale enterprises
• Learn from business owner/entrepreneurs both positive and negative aspects associated with being self-
employed.

Materials/training aids:
• Improvement of teaching equipment such as white/black boards
• Availability of text books in the library
• All modules to be published in one text book (32 hours KAB)

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