Entrepreneurship and the Promises of Inclusive Urban Development in Ethiopia
Abstract Ethiopia is one of the rapidly urbanizing countries in Africa and rural-urban migration is the major factor in the urbanization process. Migration is selective and rural youth are more likely to migrate to cities than others. However, the capacity of cities to accommodate the massive influx of migrants by providing formal employment is limited. Consequently, migrants remain marginalized and without access to employment opportunities. The majority are pushed into self-employment in the informal sector with few entrepreneurial skills and no access to affordable finance. Besides, though Ethiopia has shown economic growth, the challenges posed by a fast-growing young population has increased urban inequality, making the youth vulnerable. Despite such challenges, harnessing the benefits of the youth bulge and promoting inclusive development through the promotion of entrepreneurship has become a priority area since 1990s. Although improvements have been made, entrepreneurship programs are unable to reach the unemployed youth and those engaged in informal sector. The objective of this paper is to explore barriers that hinder the youth to formalize informal businesses and to start new businesses. The study followed a qualitative approach. Data were collected through key informant interviews and focus group discussions from four cities-Addis Ababa, Adama, Bahir Dar and Hawassa. The findings show that several bottlenecks including politicization of entrepreneurship, lack of understanding of the nature and demands of the youth; weak instructional systems; low levels of service capacity and inefficiency; lack of entrepreneurship education, youth negligence, and corruption hinder entrepreneurship programs and thereby attaining inclusive development in Ethiopia.