E conomics of non-cognitive skills: a Ugandan example

1. Economics of non-cognitive skills: a Ugandan example Laura Camfield, University of East Anglia l.camfield@uea.ac.uk

2. Key questions • What skills are valued by young entrepreneurs in Kampala? • How do these map to non-cognitive skills? • Can we see these skills facilitating social mobility in specific entrepreneurs’ lives? • Or do these examples suggest that other factors (or structures), not captured by the language of ‘skills’, are more important?

3. Outline • What are non-cognitive skills? • What is an entrepreneur? • Site and sample • Initial data from group and individual interviews • Tentative conclusions

4. What are non-cognitive skills? • Individual differences that are independent of cognitive ability, e.g. • personality (Paunonen and Ashton, 2001, Paunonen, 2003, Borghans et al, 2008) • self-regulation, motivation, and time preference (Heckman, 2007) • locus of control (Heckman et al, 2005) • perseverance (Duckworth et al, 2007) • See also ‘soft’, ‘personal’, ‘social and emotional’, ‘life skills, social competencies’ etc. • Assumed to be universal and malleable - skills not traits

5. Who measures them? • Sociologists, e.g. Bowles and Gintis, 1976 • Economists, e.g. Gronqvist et al, 2011 • Psychologists • single, related construct (e.g. ‘executive function’ - Blair and Razza, 2007) • separate components (e.g. Grit – Duckworth et al, 2007) • Impact evaluators, e.g. Ibarran et al, 2012 • life skills in India and Dominican republic • Computer Assisted Learning in China • motivational videos in Ethiopia • elite teachers in Chile...

6. Why? • Genetic component, but perceived as more malleable than cognitive skills (Cunha and Heckman, 2007) with a larger ‘window’ for intervention • Heckman et al, 2009: Perry Preschool Project • Better predictor than IQ or school achievement of performance in business, employment (salary, getting and retaining jobs), civic participation, crime, etc. • Heckman and Rubenstein, 2001: GED testing programme • Opportunity for development researchers to take more subjective factors into account?

7. What is an entrepreneur? ‘an individual who organizes and operates a business or businesses, taking on financial risk to do so’ (e.g. GEM, but OECD?) • Schumpeter (1949) – innovating, introducing new technologies, increasing efficiency and productivity, generating new products or services

8. Predicting entrepreneurship • Entrepreneurial attitudes? (Boshoff & Hoole, 1998) • Entrepreneurial Attitude Orientation Scale (Robinson et al, 1991) in a South Africa sample • USA - 5 factors, Innovation, Achievement, Self-esteem, Personal control, Machiavellianism • South Africa -3 factors, Innovation, Achievement, Assertiveness • Entrepreneurial personality? (Zhao et al, 2010) • Highest possible value in extraversion, conscientiousness, OE, lowest possible in agreeableness and neuroticism (Obschonka et al, 2013 – predictive in US, Germany, UK) • Highest possible value in extraversion, agreeableness, OE, higher than average neuroticism (own analyses using STEPS)

9. Kampala, Uganda • Four focus groups with male and female entrepreneurs, predominantly <30 years old, working in marketplaces in Kampala, supplemented by secondary analysis of five focus groups collected by GIGA in 2012 • 16 in-depth interviews with Kampalan entrepreneurs aged 23 to 40 (31% male), conducted 2012 by GIGA, repeated by me + Lugandan speaking research team 2013

10. Skills elicited through pair wise ranking

11. Illustrative quotes • Most important skills from the focus groups were trust, customer care, listening/ communication • Reliability was also important in rankings with individuals • if you don’t respect a customer, you cannot get anything • If you do not care about your customers, they will run away from you; the more you care about your customers the more you attract other customers • You entice them by chatting and making fun with them, peel bananas for them, and by the time he/she comes back tomorrow, you tell them a different story; Speaking to people well, handling customers, what ever comes, say politics, sports I easily adopt the changes so as to be at the same page with my customers. • everything just comes smoothly if you are so friendly to everyone. It will make it easy for your life and your business.

12. How does this compare with non-cognitive skills?

13. Agnes, age 28, vegetable vendor • 1st Customer care • 'I have to be polite to them, wrap the things they have bought well and put them in a plastic bag. I cannot leave them to take them in their hands. They will not come back. I also have to add something extra like a tomato or an onion so that they can come again' • 2nd Presentation • 3rd Consistent pricing - ‘all those who come whether they are foreigners or local people will pay that amount’ (range of languages) • Also relationships with husband, neighbours and other vendors, suppliers and savings groups • Relocation of potential competitors

14. Francis, age 27, soap vendor • 1st Being trustworthy • If a person is trustworthy, most people will like him especially in business. You may start with small capital others can assist you... if you don’t trust someone you don’t deal with him • 2nd Capital/ Savings • People have skills but they are not very important in business… Even the educated people need capital because there are no jobs… If you have all the skills in this world you will do nothing if you don’t have capital. • 3rd Hope • If you don’t have hope you cannot be patient [‘everything is based on patience’]. Hope is more important because with no hope there is nothing the person is working for. • Reciprocal relationships with other vendors

15. Conclusions • Increasing interest in non-cognitive skills and traction among policymakers • But are they what matters to the people we are working with and do we know enough about them to use them successfully? • Valuable advocacy tool in relation to young children • Relevance for young people? • Importance of patience (Mains, 2013) • And ‘social navigation’ (openness and agreeableness support relationships across generational hierarchies – de Weedt, 2009)

16. The skills agenda: classic misdirection? Does focusing on individuals without looking at their contexts and their relationships direct our attention away from structural constraints and the relational resources that enable people to overcome these? http://www.huffingtonpost.com/jonathan-richards/misdirection_b_685775.html

17. Acknowledgements • Thanks to the German Institute of Global and Area Studies and KfW Development Bank for access to a sample of entrepreneurs and related qualitative data previously collected in Uganda as part of a project on entrepreneurship