62234 March 2011 · Number 83 CAN UNEMPLOYED YOUTH CREATE THEIR OWN JOBS? THE TUNISIA BUSINESS PLAN THESIS COMPETITION Stefanie Brodmann, Rebekka Grun, and Patrick shown how unbearable the situation of local Premand1 unemployed youth has become. In Tunisia, first time jobseekers with higher education “My expectations were very high. I was going to encounter a substantially higher fulfill my dreams. I was 100% sure to succeed. I unemployment rate than the population on thought that for once in my life I was given the average (22% vs. 13% according to official opportunity to speak about myself, my objectives, figures). Long-term unemployment is and my aspirations in life.” (Participant of the particularly pronounced among tertiary Tunisia Business Plan Thesis Competition). educated first time labor market entrants: data from a tracer survey of university graduates Summary: Tunisia, like the MENA region in from the 2004 class revealed that 46% of general, has long experienced unemployment, graduates were still unemployed 18 months particularly among young university after graduation. Graduates of law and graduates. Unfortunately, job creation in management face particularly long transition existing enterprises is not sufficient to absorb a periods2. growing stream of graduates, and this tendency is unlikely to change in the short run. - A recent Constraints for Labor Market Insertion: Job- HD project is therefore trying to teach creation in Tunisia has not kept pace with the university graduates to create their own jobs. growing numbers of (educated) labor market The Business Plan Thesis Competition uses the entrants. In addition, labor market inefficiencies undergrad thesis writing process to teach due to skill mismatches and expectations to students to create an enterprise project and obtain public sector employment have slowed write a business plan. Apart from professors, the school-to-work transition of Tunisian youth. private sector coaches mentor the students. Achieving a lower unemployment rate will Completed theses are submitted to a require demand side interventions, including competition, whose winners receive financial private sector development, increased support and further coaching to incubate the competitiveness, and innovation; supply side enterprise. First results from the baseline interventions, including education and skill survey and accompanying qualitative training; and effective labor market interviews show the passionate take-up of the intermediation to match demand and supply. program and warrant cautious optimism The Employment Development Policy Loan for regarding the emergence of an entrepreneurial Tunisia (Board July 20103) tackles some of these culture. constraints in order to achieve more effective and efficient job entry. The Business Plan Thesis Introduction: The recent events in the MENA Competition (“the Competition”) is one supply- region, which first unleashed in Tunisia, have 1 Stefanie Brodmann, Junior Professional Officer, Middle 2 World Bank, 2009. “Dynamique de l’emploi et adéquation East and North Africa Region, The World Bank; Rebekka de la formation parmi les diplômés universitaires. Analyse Grun, Senior Economist, Middle East and North Africa comparative des résultats de deux enquêtes (2005 et 2007)”, Region, The World Bank; Patrick Premand, Economist, HD World Bank, Washington DC. Chief Economist’s Office, The World Bank. 3 Tunisia Employment DPL (P117161) side action supported by the Tunisian follow-up from local start-up offices. Among Employment DPL. the winners, about two thirds were women, with projects predominantly in service areas, The Business Plan Thesis Competition: The such as care for elderly, educational activities Tunisia Business Plan Thesis Competition - or for children, fashion, interior design, tourism, concours des meilleurs plans d’affaires bee-keeping and recycling. Men winners “Entreprendre et Gagner” – is an integrated predominantly proposed business plans in program aimed at enhancing graduates’ technical, computer or production areas employability and entrepreneurial skill set. The including computer-based architecture, solar intervention has been designed in line with energy, construction, and computer networks. international best practice, delivering an integrated package of entrepreneurship Program implementation: The preparation and training and individual coaching. Students in implementation of the project was ensured the third year of their licence appliquée in 162 through cross-sectoral cooperation between the university programs in all Tunisian universities Ministry of Vocational Education and were invited to participate. During the 2009- Employment and its statistical division and 2010 academic year, 1702 interested students employment offices, the Ministry of Industry (approx. 10% of the overall student population) and its network of start-up offices, and the signed up for the first year of the pilot. In their Ministry of Higher Education. The project was final semester, students received support overseen by the self-employment directorate of through (i) courses on entrepreneurial skills the public employment office (ANETI). through the public employment office, (ii) supervision from university professors, and (iii) Impact Evaluation: Although there is an external private sector coaches, mainly recent increasing agreement that training in entrepreneurs or professionals in an industry entrepreneurship is critical to foster business relevant for the business idea of the student creation, rigorous evaluations of such initiatives (see Figure 1). remain rare. Another innovative feature of the Competition is that is has been designed to Figure 1: The Business Plan Thesis Competition allow a rigorous evaluation of its effect on – Value Chain employment outcomes. Of the 1702 students Semester Graduation who signed up and were eligible, about 50%, i.e. 856, were randomly selected to participate Selection Incubation / in the pilot, with the remainder forming the Business Idea Initial Concept Feedback/ Coaching Business Plan of Business control group. Winners Creation Evaluation objectives: The evaluation has three Student Student main objectives: (i) understand the profile of develops Student an idea of writes brief concept of receives Student writes a BP enters the Winning students who are interested in becoming a product feedback thesis or service Business idea to his first business plan, competition. A national receive entrepreneurs and setting up an enterprise; (ii) concept incubation supervised by a jury selects the winners support, establish whether the business plan financially professor of the prize and in the competition is effective in improving labor package form of coaching market outcomes of the participants, and (iii) to explain why it works and for whom by Winning the Competition: Students can identifying the profile of beneficiaries for which submit their business plan as a thesis to satisfy the impact of the intervention is larger, as well graduation requirements. In addition, students as the likely channels through which the are also invited to submit the business plan to a intervention has had an impact. Competition. Juries at the regional and national level, comprised of academics, officials Preliminary Findings: The evaluation uses a of the employment offices and members of the mix of rigorous quantitative methods and private sector picked the 50 winners, among qualitative interviews. While the evaluation is which the first 20 received monetary prices and ongoing and first follow-up results will be March 2011 · Number 83 · 2 available in fall 2011, a range of preliminary instance, students revealed having acquired results have high policy relevance: new skills, including technical skills in project Profile of Interested Students: Baseline or business plan development or behavioral data4 shows that the program is particularly skills valued by employers: attractive to (i) women (66.7% of applicants), (ii) students who already have some “I have not won a prize but I have won a professional experience (71% of applicants), (iii) formation.” Female participant from Monastir. students with friends or relatives who have experience relevant for business plans (61% of “Now I have more faith in myself. I know that any applicants) as well as (iv) students who show a project will be hard, that it will not work high willingness to take risks (74% of immediately, but I am ready.” Male participant applicants). from Tunis. Expectations: More than 85% of applicants expected that participation in the “Now I have an entrepreneurship culture. During program would facilitate their labor-market the training, I lived in the skin of an entrepreneur. insertion and increase their future earnings. Now I feel like an entrepreneur. (…) We worked on 85% of applicants had a project idea at the time our personality. I learned to believe in myself, to they applied, suggesting that the program value myself. I left aside my timidity, it was like a responded to a strong demand. therapy.” Female participant from Tunis. Listening to the Voices of Tunisian Youth: In “I have become more autonomous. My behavior has order to complement the analysis of the changed. I use my new skills, I am more baseline survey, semi-structured qualitative disciplined.” Male participant from Carthage. interviews were undertaken with 23 students, 8 Aspirations and Enterprise Creation: After the coaches and supervisors from 6 universities across Tunisia5. The students were selected business plan competition, students reveal new aspirations and goals for the future, as well as a from a random sample of program participants from each university. The interviews were higher willingness to create their own enterprise: realized in October 2010, 4 months after graduation. “A young entrepreneur explained his success during the training. Now I want to do better than Expectations: As illustrated by the quote at the him.” Male participant from Tunis. beginning of this brief, qualitative interviews confirmed the high expectations observed upon “I have a new vision of the future. I have not application in the baseline data: realized my project yet, but in 5 to 10 years I will.” Female participant from Tunis. “The expectation was that the Competition would help us find a job or start an independent project” Enabling Environment: Students also revealed Female participant from Tunis. that the business plan competition extended their professional network, for instance, by “There are not enough jobs, the business plan giving them an opportunity to interact with competition is the only way.” Female participant professionals such as coaches, bankers, trainers from Gabes. and employment office advisers. These contacts Skill acquisition: Students’ perceptions also broadened their horizon and allowed them to build a support network that may facilitate the point to channels though which the development of their enterprise: interventions can improve employment. For “I now have a social network. I know who to 4 World Bank, 2010, “Concours des meilleurs plans d’affaires Entreprendre et Gagner. Rapport d’exécution de consult.” Female participant from Tunis. l’enquête de référence”, World Bank, Washington DC. 5 Graduates from the following universities were interviewed: Gabes, Gafsa, Kairouan, Mannouba, Monastir and Tunis. March 2011 · Number 83 · 3 “The formation has broadened my contacts. It put Contact MNA K&L: me in touch with bankers.” Male participant from Director, MNACS: Emmanuel Mbi Monastir. Manager, MNADE: David Steel Regional Knowledge and Learning Team: Reduced Unemployment through Omer Karasapan, Roby Fields, Hafed Al-Ghwell, Entrepreneurship Training? Tel #: (202) 473 8177 MNA K&L Fast Briefs: “The business plan competition plants the seeds of a http://go.worldbank.org/OXADZV71I0 business creation culture.” Professional coach The MNA Fast Briefs are intended to summarize from Gabes. lessons learned from MNA and other Bank Knowledge and Learning activities. The Briefs do not necessarily In the end, whether the seeds of reflect the views of the World Bank, its board or its member countries. entrepreneurship culture lead to enterprise creation, and whether students perceptions materialize into observed impacts on employment will depend on a variety of factors. Survey data is needed to quantify the average effect across participants. This is particularly important as not all students across the country received the same quality training or coaching. Finally, the intervention aims to foster entrepreneurship and better align graduates’ skills with the demands of the labor- market. However, the program cannot remove all obstacles, and other labor-market constraints may prevail. For instance, many interviewees pointed to the difficulty of mobilizing funds to start their project. “I developed my project, but there is a blockage at the BTS (microfinance bank). I need 40,000 dinar, but the BTS demanded 11,000 own contribution. With 7,000 prize money, I still need 4,000 dinar. So I gave up.” A winner of the Competition. Upcoming results and policy dialogue: Results from the follow-up impact evaluation survey will be available in Fall 2011 and will rigorously analyze impacts on skill acquisition and employment outcomes one year after the end of the intervention. As such, it will assess whether tackling the skill mismatch by teaching entrepreneurship to undergraduate students is effective in facilitating labor-market insertion. Evaluation results from the baseline and follow-up survey, as well as from qualitative interviews will provide timely input for evidence-based policy dialogue on strategies to reduce unemployment in Tunisia and other MENA countries. March 2011 · Number 83 · 4