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Tracer Study of KAB Graduates and

Impact Assessment of KAB Programme in Indonesia

Prepared by: Ciputra University December 2009 – April 2010

A. Background

In 2005/2006, the Ministry of National Education (MONE) and the International Labour Organization (ILO)

introduced the Know About Business (KAB) entrepreneurship training programme in the vocational and

technical secondary education system in Indonesia on a pilot basis. The overall goal of MONE along with other

related ministries, in particular the Ministry of Manpower and Transmigration (MOMT), was to encourage

entrepreneurship among the nation’s young people as well as increase their employability in order to reduce

unemployment rates and poverty in the longer term.

A year before, in 2004, Indonesia had launched the Indonesia Youth Employment Action Plan (IYEAP) where

among its activities it had introduced the ILO’s Start Your Business (SYB) package in vocational secondary

schools and the tertiary vocational schools as a means to provide young women and men the basic knowledge

and tools to start their own small business after they graduated. It was found however that most young

women and men needed more life experience and skills, and additional support before starting a business.

Focusing on general business awareness and entrepreneurship education prior to the SYB package was

therefore seen as a good complement, and resulted in the pilot testing of KAB. The KAB pilot targeted students

in their first two years of senior high school and the materials were adapted in June 2005 and 116 teachers

from 49 SMK, 3 BLK and 6 PPPG across Indonesia were trained to test the KAB programme in school year

2005/2006.

Since the pilot test, KAB implementation has rapidly expanded in Indonesia with more than 50 training

workshops for Facilitators, Trainers and Promoters undertaken, resulting in 354 facilitators trained to promote

and teach KAB. As of May 2009, an estimated 132 secondary vocational schools had taught KAB to

approximately 45,945 students. Currently, the Ministry of National Education (MoNE) is currently providing

support to the ILO’s initiative to expand the implementation of KAB and the delivery capacity of educational

institutions through the ILO executed Education and Skills Training (EAST) programme for youth.

B. Objective and methodology

The objective of the impact assessment was to undertake a tracer study of students who in the 2005/06 school

took a course based on the KAB curriculum. The study looked at whether KAB graduates were more likely to

have either started businesses and created employment for themselves and others or secured gainful

employment compared to non-KAB graduates in the same school year and institutions.

Methodology

The research methodology was based on a quasi-experimental design using a treatment group (KAB group)

and a control group (non-KAB group) and combined both quantitative and qualitative methods. There were 3

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methods used to collect the data: a survey, Focus Group Discussions (FDG) and Case Studies. Random sampling

was attempted for the quantitative study but sampling by convenience was eventually used. Respondents

were chosen among graduates who had participated in the 2005/06 pilot test and had graduated in 2006 and

2007. Of those chosen as samples, 80 people had participated in the KAB program and 45 had not. Graduates

responded to different questionnaires depending on whether they were business owners or employees. In

total, 109 took the survey for employees and only 17 took the survey for business owners. All 17 of them, were

KAB graduates.

The research was undertaken in 3 vocational schools: SMK PGRI 3 Malang, SMK Negeri 2 Denpasar, and SMK

Negeri 1 Lumajang. It combined 3 methods: Survey, Focus Group Discussion and Case Studies. The survey was

administered to both a group of KAB graduates and a control group composed of non-KAB graduates. Focus

group discussions were organized with groups of graduates who have started a business, graduates who have

become employees, KAB teachers, parents of KAB graduates and current students. Finally a set of five case

studies presenting the stories of five KAB business owners was developed based on one-on-one interviews.

The study was conducted from December 2009 to April 2010.

Challenges

Despite good collaboration from the participating schools, locating the graduates was a major difficulty since

the data from schools were not up-to-date. A lot of the data available was not valid and the research team was

called on to track down graduates by word-of-mouth and other methods. There were also difficulties in

conducting the FGD as participants not always showed up, and in the case studies the difficulty was finding

good quality cases. This was further exacerbated by the location of businesses as they were often located in

difficult to reach locations.

Finally, it is worth pointing out that finding business owners who had not gone through the KAB programme

was not possible and KAB business owners were only found thanks to them remaining in contact with their

KAB teachers. All KAB business owners were found in Lumajang province. Thus, the results obtained from the

business owner survey for the KAB group cannot be compared with the results from the control group.

However, an analysis based on gender was attempted in order to shed some light on major points concerning

the programme.

C. Key Findings

Profiles of KAB and Non-KAB respondents

Gender composition: While for the KAB group the percentage of males and females was similar (52.4% vs

47.6%), the Non-KAB group had a clear overrepresentation of males. 93.6% were male respondents.

Age group: The age for KAB respondents was between 20 and 24, with a majority being between 23 and 24

years old. For the Non-KAB group, respondents were between 19 and 23, with a majority between 21 and 22

years of age.

Geographical location: Majority of both groups were from urban or semi-urban areas. The KAB group had a

higher percentage of people living in rural areas (16.25% vs. 6.38%)

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Survey to employees

Two types of analysis were carried out with the data obtained from the survey administered to employees: a

descriptive and a correlation analysis.

Based on the descriptive it was found that majority of KAB graduates believed the programme had helped

them prepare for their current job (94.3%).

As many as 94% of KAB graduates compared to 84% of non-KAB graduates stated they would develop a

business plan prior to starting their own business.

Based on the correlation analysis, small associations were found for some of the questions. For example, a

small negative association was found between respondents’ participation in KAB and whether they had tried

to start a business. This could be because KAB students are more cautious, having seen what a business entails

and they wish to gain further experience before starting their own business. There was however a small

positive association between respondents’ participation in KAB and their success in business. It would

therefore seem that although KAB graduate employees may be less likely to have tried to start a business,

when they have, they state having been more successful than non-KAB.

Another small negative association between respondents’ participation and their perception of knowledge and

skills sufficiency was found. This could help corroborate why KAB employees seemed more hesitant to start a

business. Lastly, there seems to be a small positive association between KAB participation and respondents’

plans to develop a business plan if they were ever to start a business. According to this, it would seem that KAB

graduates would be more inclined to develop a business plan than a non-KAB graduate.

Based on the descriptive and correlation analysis, it can be concluded that the KAB program influenced to

some extent graduates who became employees by providing certain knowledge and skills. However, the

program did not prepare the graduates sufficiently and additional skills are needed if they want to start their

own business.

Survey to business owners

As stated previously, no business owners were found within the control group. Therefore, no comparison was

possible. However, analysis was done by disaggregating data by gender in several of the questions. Many of

the findings would require further research in order to fully explain the findings. Nevertheless it was found

that:

Majority of female graduates took considerably longer to start a business after graduating compared to male

graduates. Thus 80% of females began between a year or two after graduation. By that time, 50% of males

had already started their business.

Most graduates (both male and female) started businesses in trade. Males also started in services, repairs and

agro-business. Females on the other hand only services.

Majority of business owners (65%) ran unregistered business.

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Majority of business owners ran micro enterprises (between 1 and 9 workers) although 8% of male business

owners stated running small enterprises (between 10 and 49 workers).

While more males stated having always wanted to be an entrepreneur, 40% of women declared they were

only convinced by self-employment when they were unable to secure a job.

Both male and female respondents said the KAB programme contributed to preparing them for self-

employment/opening their business. They also stated they would recommend KAB to other students.

While all male respondents stated they became business owners out of opportunity, 20% of females declared

having been “pushed” into it.

Males rated the performance of their businesses more positively. While 91% of males rated their performance

as highly successful or successful, only 60% of females rated it as successful. Moreover, while none of the

males stated their businesses as not successful, 20% of females said their businesses were not successful.

More males than females were able to provide jobs for others.

Both males and females agreed that the main challenges to starting their business were accessing working

capital, finding appropriate business premises and unfavourable business regulations.

Findings from Focus Group discussions

KAB Graduates

KAB graduates stated there were many good things about this entrepreneurship programme. It taught them to

be creative, consistent and innovative. They said that they preferred the practical activities within the

programme because they gained more experience and knowledge about being an entrepreneur.

During the FGD, graduates also mentioned their need for networking with former peers, successful business

owners, businesses etc. They felt this could help them increase their knowledge, creativity and networks. They

suggested that the programme offer more occasions for this.

Overall, they felt that the programme had helped the graduates to gain better leadership skills in terms of

achieving the targets that they had set.

Teachers:

The KAB curriculum was assessed as being good overall by the teachers, although it their eyes it could use

more elaborate explanations for certain concepts. Teachers thought it would be beneficial if the KAB

curriculum were integrated with the national curriculum which has more elaborate explanations and

theoretical content. Since it has not been included, the KAB curriculum has been used until now more like a

guidebook and not as a curriculum.

Teachers from Lumajang participating at the FGD shared that partly thanks to the KAB programme, several

graduates from SMK Negeri 1 Lumajang were successful in opening their own businesses, and many of them

came back to their teachers to share their successes and give positive feedback.

Overall, it was felt that the KAB teaching methodology really helped students in problem solving and decision

making through simulation, and finding more productive solutions.

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Current students:

Current students of KAB stated that as a whole, the programme was entertaining and beneficial. They

estimated that 25% of their time was spent on practical activities, while the other 75% was based on a more

theoretical approach. The students agreed that the best part was when they applied what they learnt by doing

business in their neighbourhood or within the school. They appreciated the practical nature of this exercise

because it confronted them with new experiences and equipped them with necessary skills to start the

business. Some of the most useful aspects of the practical activities listed by students were learning firsthand

about marketing strategies, leadership, innovation, networking and management.

Content-wise, the students thought the topics given in the KAB program were clear and easy for students to

understand but that the major difficulty was to apply what was learnt because of time limitations. They

believed the programme could be improved if more practical activities were done and more time was

allocated time. They also mentioned improving the learning facilities, inviting successful entrepreneurs to

share their experiences, sharing with more advanced students and improving the overall teaching approach.

The students said that while they had always wanted to open their own business, the program had further

confirmed this desire and motivated them to start businesses different to those already existing.

Parents:

The parents who participated in the FDG felt the skills and knowledge their children had acquired from

entrepreneurship education (KAB) were important tools to help them start their business in the future. They

felt that the programme had given them the education and general direction necessary to being an

entrepreneur. Most parents, themselves business owners, felt however that the actual decision to run a

business had came from the graduates themselves before the programme.

Parents provided the following recommendations to improve the KAB program:

1. The programme should include more practical activities so students can develop more self confidence. They

also stated that ILO should accompany young men and women even after graduation by providing further

training and helping them identify and access different sources of capital.

2. The programme should be given not only to high school students but also to already school graduates who

have not been successful entering the labour market. The school could in those cases provide support to

graduates and help them overcome difficulties when trying to start their business. Stronger networking

between current students and graduates should also be encouraged.

3. KAB class should plan field trips to companies so that they encourage students and these can start building

relations with companies.

D. Conclusions and recommendations

- The KAB program influences to some extent graduates who become employees in particular by providing

knowledge and skills. However, the program did not prepare them completely and additional skills are

needed.

- Despite its limitations, the KAB programme has been successful in incentivising youth to become self-

employed. The positive aspects of the curriculum are: finding entrepreneurial spirits, making decisions and

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exposing the entrepreneurial spirits. The entrepreneurship program also taught the students to be creative,

consistent and innovative.

- Both graduates and current students stated that the theory and practical ratio needed to be better balanced.

Also in order to carry out the practical activities well, more time should be allocated to entrepreneurship

education. Also, they stated that entrepreneurship education should be compulsory.

- According to the teachers, compared to the national curriculum, the KAB curriculum was more interesting.

They recommended that the KAB curriculum be integrated into the national curriculum on entrepreneurship.

- Currently the schools that took part in the study use the national curriculum combined with the material of

the KAB curriculum. So, formally, the schools use the national curriculum but in practice they give the best

of 2 curriculums (national and KAB). This is because the Indonesian authorities require them to use the

national curriculum. It would be advisable that ILO and the Indonesian authorities work together to deliver

entrepreneurship education nationally so that only one curriculum is used.

- Parents suggested that ILO should provide practical help to graduates by either providing more training or

helping them access capital for starting their own business.