Study finds entrepreneurial training for marginalized ineffective
By Amie Lynn Shirkie
Groundbreaking research by a U of S graduate sociology student may change the way we view small business development and entrepreneurial training in Saskatchewan.
PhD student Joanne Butler's study of entrepreneurial training programs (ETPs) aimed at marginalized people found they weren't as effective as they might be.
Butler completed her BA in French at the U of S in 1992; however, when she went on to study sociology, her interests changed: "Once I took sociology, I realized that's where I wanted to focus. Sociology provides students with a new or different way of understanding the world, so for me, looking at the world in this new way made me want to study society, to discover why things are the way they are, and how they could be better."
Butler completed her master's degree in Sociology, also at the U of S, in 1997. Her MA thesis focused on high school students and their post-graduation aspirations. One interesting feature that arose from this research was the possibility of students becoming entrepreneurs and owning small businesses.
At the time she was conducting her research, small business ownership was being presented by the government and interested parties as a possible solution to youth unemployment and emigration to other provinces, as well as a means of encouraging rural community development. In light of her research and current political and social interest, Butler began her PhD thesis in 1997.
Her doctoral thesis, supervised by Sociology Professor Terry Wotherspoon, focuses on Saskatchewan ETPs offered through agencies specifically established to train potential entrepreneurs. She studied nine ETPs in Saskatchewan, collecting participant surveys, and conducting in-person interviews with participants.
Although her study included anyone enrolled in the nine ETPs, she found that the majority of the agencies are targeted specifically towards "marginalized individuals" - those who receive employment insurance or social assistance. Slightly more women than men were enrolled, 19 per cent of whom were single parents. The majority of the participants earned a low income and had not received a particularly high level of education. Her study also included a 13 per cent representation of Aboriginals.
Some of the agencies' goals for marginalized people include encouraging independence, giving trainees the ability to manage finances, and preparing them for future training or employment (provided they do not start up a small business of their own).
Initially, the participants Butler surveyed were "very excited" about the program. Many had not previously thought of themselves as entrepreneurs, and were "filled with optimism and encouragement about new skills they didn't even know they had."
Later, as Butler began in-person interviews, 11 out of 18 participants had started up their own small businesses, most in rural communities; their initial excitement, however, had turned to anger, frustration, and disappointment.
The difficulties faced by these new entrepreneurs were numerous and great. They felt unsupported by members of their communities, and many of their businesses, particularly service sector enterprises, were small and undercapitalized ventures.
For those receiving employment insurance, the financial barriers were nearly insurmountable.
The entrepreneurs were provided, if needed, with a small business loan of up to $10,000, with the stipulation it be paid back within six months. Some entrepreneurs received extended employment insurance benefits for up to six months, but if they paid themselves a wage, or brought in other income, this was deducted from their benefits.
Given the difficulties of attracting customers and financial setbacks, many of the participants simply were not making ends meet, and had to take other jobs, or borrow from friends, family, and credit card companies in order to pay off their loans. "The promises made to them about entrepreneurship did not come true. Some participants said, 'I feel as though I've been set up to fail.'"
Evaluating the effectiveness of entrepreneurial training programs in Saskatchewan, Butler asserts, "I would suggest that these programs, based on these results, are limited in what they can achieve in terms of their broader goals. Moving individuals who are marginalized and don't have entrepreneurial capital into small business is not the best strategy for independence or community development. We need to redirect resources towards more basic education and training needs, and to address the social issues that marginalized people brought with them into the program."
Butler hopes that her findings will contribute to Saskatchewan's social and economic development policies, and she will "continue to do research that has policy relevance."
Her next research project will focus on the role of enterprise and innovation in education and training programs, and the implications of this for individual and community development.