A Brief On Step

By Julia Brauner

STEP is entrepreneurship training for youths and young adults.  The programme develops young people’s skills, knowledge and confidence to pursue an entrepreneurial career. In the training, the students learn step-by-step to start their own businesses. This provides them with an effective means of creating jobs for themselves and other people in the community.

STEP provides an answer to adverse labour market conditions and limited employment opportunities. STEP students learn to create their own jobs by starting and running a business. A key benefit is that the students learn to take charge of their professional future. Through the training, the students become more proactive and independent, which supports them in overcoming the extreme unemployment rates among youths in many developing countries. Unemployment and poverty are inextricably intertwined. This is the point where STEP seeks to make a difference.

The approach by STEP is supported by researchers and politicians alike. They have ranked fostering entrepreneurship among the top priorities in their agenda to alleviate poverty. Entrepreneurship is a main driver of economic development and wealth creation. Entrepreneurs have the potential to boost the economy and contribute substantially to new job creation. Against this background, entrepreneurship training, such as STEP, is a main leverage for a successful bottom-up strategy to increase the number of entrepreneurs and accomplish the aforesaid agenda.

The start

The STEP project was founded in 2006 by Prof. Dr. Michael Frese and his team from Leuphana University of Lüneburg in cooperation with Makerere University Business School and Uganda Christian University (Uganda).

The first training was conducted in 2009 at Makerere University and Uganda Christian University in Uganda. From these two universities, 200 students formed the first cohort to ever attend a STEP training. The evaluation of the first training showed significant short- and long-term effects on all factors important for entrepreneurship. Based on the positive results, the STEP training was implemented at universities in Liberia, Kenya, Tanzania, and Rwanda. In subsequent years, STEP was extended to further educational institutions, such as vocational training institutes and secondary schools, as well as to further regions, such as South-East Asia (e.g the Philippines) and Latin America (e.g Mexico).

Our evaluations in each country have shown that the STEP training has a significant impact on business and job creation. STEP thus contributes to poverty alleviation and job creation on different educational levels and in different regions across the globe.

Scientific evaluations have showed that STEP has positive short- and long-term effects on students’ entrepreneurial behaviour. STEP kick-starts the students’ entrepreneurial careers. More importantly, the studies have demonstrated that the positive impact sustains over several years.

The most important findings are:

STEP students start 34% more businesses one year after the training and 20% more businesses two years after the training. STEP students create 35% additional jobs two years after the training.

The evaluation studies have  also revealed mechanisms underlying the positive impact of STEP on business creation. STEP students develop a stronger entrepreneurial mind-set. This means that STEP enhances students’ intentions to start a business, the confidence in their entrepreneurial skills, their knowledge about how to start a business, and their action planning for starting a new business. The stronger entrepreneurial mind-set results in students identifying more business opportunities and performing more start-up activities to start a new business.

Evaluation studies have further showed that STEP compensates for a lack of financial capital in the start-up process and leads to higher life satisfaction in the short- and long-run. Furthermore, STEP boosts and sustains students’ passion for entrepreneurship, which translates into higher business creation in the long-run. STEP thus impacts on a broad range of positive outcomes.

The STEP programme uses randomized controlled trials (RCT) to assess the impact of STEP. This means that the evaluation studies use the gold standard to assess the impact of interventions and comply with the highest scientific standards. A randomized controlled trial means that applicants are randomly selected into a training group and control group. This guarantees that the students in both groups are equivalent before the training and all differences after the training can be attributed to STEP. Furthermore, we conduct a pre-training measurement and several post-training measurements to assess the long-term impact of STEP over several years.

We  have  developed an effective procedure  to facilitate the long-term implementation of STEP at international partner institutions. In a three-year project, the partner institutions are prepared to organize and run STEP, secure the financial resources to sustain STEP, and institutionalize STEP as part of their academic programme. In the first year, STEP is introduced, implemented, and evaluated  to demonstrate its  beneficial effects on students’ entrepreneurial behaviour. In the second year, the  partner  institution  assumes  responsibility  for  organizing  and  implementing STEP. The partner institution also starts securing  funding  and  the administrative procedures  to include STEP in the  regular  curriculum  of  one  or  more  programs  of  study. In the  third  year, the  partner institution independently organizes the training and decides about the institutionalization of STEP in their academic  programme.

Entrepreneurial process

STEP is action-oriented and evidence-based. Action-orientation means that STEP students form teams and engage in the start-up process of a real micro business during the training. They proceed through the entire entrepreneurial process from preparing to launching and managing a real business. This means that they identify and evaluate new business opportunities, acquire equipment and raw materials, deal with suppliers, and enter the market to offer their product or service to real customers. The students thus take an active role and learn entrepreneurship “on-the-job”. They experience becoming an entrepreneur under real business conditions. They receive real-life feedback and develop a better understanding of the tasks and challenges of an entrepreneur. This is key to developing  a feeling of true mastery of entrepreneurship, a belief of “I can do it”.

Evidence-based means that STEP students learn entrepreneurship on the basis of action principles. Action principles are applied theory. The STEP action principles have been derived from the scientific literature on entrepreneurship, management, and psychology. The STEP action principles are science-based “rules of thumb” that provide practical knowledge guiding students what to and how to do it to accomplish the start-up process. STEP is also evidence-based with regard to the didactical approach. STEP is rooted in action regulation theory and the result of our long-standing experience in training and entrepreneurship research in developing countries.

STEP is a 12-week training course. In the 12 weeks, the students meet weekly to learn action principles about 12 topics important to succeed in entrepreneurship. The 12 topics are identifying business opportunities, marketing, leadership and strategic management, action planning, financial management, persuasion and negotiation, acquiring starting capital, networking, accounting, personal initiative, business planning,legal and regulatory issues. The weekly sessions are three hours long and facilitated by local lecturers. The lecturers receive a three-day train-the-trainer workshop to learn the action-oriented and evidence-based approach of STEP. A team of STEP master trainers holds these workshops and instructs up to 12 lecturers in the methodology of STEP. Upon successful completion of the train-the-trainer workshop, the lecturers from the partner institution become certified STEP trainers.

The writer is a graduate student at Leuphana University of Luneburg ( Germany)