STEP Training
The Student Training for Entrepreneurial Promotion (STEP) is a joint project of Leuphana University and several partner institutions worldwide. STEP creates a positive change in the entrepreneurial mindset and behavior of young adults around the globe. It was founded in 2008 and has since been implemented in 24 institutions from 12 low- and middle-income countries.
Building on action regulation theory, STEP aims at developing entrepreneurial skills and confidence through an action-oriented approach. The 12 sessions of the training program cover lessons from the domains of psychology, entrepreneurship, and business administration. Most importantly, the trainees engage in real entrepreneurial actions and start a real micro business during the training program. Thus, STEP expands the learning space beyond the classroom and gives the trainees the space to explore and experiment while actively developing and implementing their businesses. To this end, the student teams identify a business opportunity, acquire the necessary equipment, produce a product or service, and introduce it into the market. Importantly, the entrepreneurial teams develop a real product or service and sell it to real customers. In combination, the theoretical know-how and real-life experiences enable participants with little to no start-up experience to pursue an entrepreneurial career and start their own businesses after STEP.
The interdisciplinary, evidence-based training program empowers the participants to not only create jobs for themselves, but also for the people in their communities. In this way, STEP contributes to the SDG #8 (decent work and economic growth) by addressing the issues of adverse labor market conditions and limited employment opportunities.
So far, more than 15,000 students worldwide have participated in STEP. Each project was evaluated with a randomized controlled trial (RCT), resulting in more than 20,000 observations from more than 6,000 students to assess the short- and long-term impact of STEP on students’ entrepreneurial motivation and success. The results clearly demonstrated that STEP has a positive impact on participants’ entrepreneurial mindset in the short-term and their entrepreneurial behavior and success in the long-term.
Theoretical Foundations of STEP
STEP is a 12-week action-oriented entrepreneurship training program. During the 12 weeks, 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 involves the identification and evaluation of new business opportunities, acquisition of equipment and raw materials, dealing with suppliers, and entering the market to offer their product or service to real customers. The students thus take an active role and learn entrepreneurship „on-the-job“ and 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. They develop a feeling of true mastery of entrepreneurship, a belief of „I can do it“. Furthermore, STEP students learn entrepreneurship on the basis of action principles. The STEP action principles have been derived from the scientific literature on entrepreneurship, management, and psychology. They are science-based „rules of thumb“ that provide practical knowledge guiding students what to do and how to do it to accomplish the start-up process. STEP is rooted in action regulation theory and the result of our long-standing experience in entrepreneurship training and research in countries with adverse job market conditions and high youth unemployment.
Each time STEP is implemented at a new institution, randomized controlled trials (RCT) are conducted. For that purpose, participants are randomly allocated to either the training or the control group. By means of comparison of the pre- and post-training measurements, the impact of STEP is assessed, while the control group serves as a baseline to be able to draw causal conclusions. The results of the RCTs demonstrate 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. In the long-run, STEP enhances participants’ success in business and job creation.
Overview of the Content and Method of STEP
STEP is an entrepreneurship training for young adults. STEP develops young people’s skills, knowledge, and confidence to pursue an entrepreneurial career. In the 12-week 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.
During the course, the students meet weekly to learn action principles about 12 topics important to succeed in entrepreneurship. The weekly sessions are facilitated by local lecturers and cover the domains of business administration, entrepreneurship, and psychology in an interdisciplinary approach:
- Identifying Business Opportunities
- Goals, Plans, and Taking Action
- Marketing
- Strategic Management
- Managing Finances
- Overcoming Barriers
- Accounting & Controlling
- Business Model Canvas & Planning
- Finding Starting Capital
- Registering the Business
The Implementation Process
STEP was developed in cooperation with researchers from Makerere University, Makerere University Business School, Uganda Christian University, and Kyambogo University in Uganda. With every new implementation, the STEP content is adapted to the local context by members of the local institution. The training sessions are conducted by local lecturers who receive a three-day train-the-trainer workshop to become certified STEP trainers. The workshops are led by a team of STEP master trainers and in each workshop, up to 12 new STEP trainers are instructed on the methodology of STEP.
Additionally, STEP contains an effective procedure to facilitate the long-term implementation of the training 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 program.
In the first year, STEP is introduced, implemented, and evaluated to demonstrate its beneficial effects on students’ entrepreneurial behavior.
In the second year, the partner institution assumes responsibility for organizing and implementing STEP. The partner institution also starts securing funding and initiating the administrative procedures to include STEP in the regular curriculum.
In the third year, the partner institution independently organizes the training and decides about the institutionalization of STEP in their academic program.
Key Evaluation Results
We use randomized controlled trials (RCT) to assess the impact of STEP. This means that our evaluation studies use the gold standard to assess the impact of interventions and comply with the highest scientific standards. Using a randomized controlled trial, 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.
Most Important Findings
The findings are based on the results of the randomized controlled trials (RCTs) with a total of more than 5,000 participants in the training group and more than 4,000 participants in the control group. Overall, the results are based on a total of more than 20,000 observations across the measurements before (T1) and after STEP (T2-T4).
BUSINESS CREATION
STEP increases the business owner rate by 16 percentage points (56% business owners in the training group compared to 40% in the control group), meaning a 30% increase in the likelihood of creating a business two years after STEP (T4).
STRONGER ENTREPRENEURIAL MINDSET
The evaluation studies revealed the mechanisms underlying the positive impact of STEP on business creation. STEP students have a stronger entrepreneurial mindset. Specifically, 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 mindset results in students identifying more business opportunities and performing more start-up activities to start a new business.
ADDITIONAL JOB CREATION
STEP students create 50% more jobs two years after the training (T4). STEP students employ on average 1.38 people in comparison to 0.92 people employed by the control group.
TOTAL INCOME
STEP has a significant impact on total income. Compared to the control group, STEP trainees have 10% more total income two years after the training.