Entrepreneurship and the Promises of Inclusive Urban Development in Ethiopia

Ethiopia is urbanizing rapidly and 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 migrants by providing formal employment is limited. Consequently, migrants remain without access to employment opportunities. The majority are pushed into self-employment in the informal sector. Despite such challenges, harnessing the benefits of the youth bulge and promoting inclusive development through entrepreneurship programs has become a priority area since 1990s. Although progresses 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 join entrepreneurship programs. The study followed 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 politicization of entrepreneurship; lack of understanding the needs of the youth, weak institutional systems, low levels of service capacity and inefficiency and lack of entrepreneurship education and youth negligence hinder the success of entrepreneurship programs thereby attaining inclusive development. Entrepreneurship programs thus need to follow flexible and participatory approach. Programs need to be selective in the type of entrepreneurial initiatives and supports that can address the needs and priorities of the youth. Providing youth with entrepreneurial education has a positive effect on their decision to be engaged in entrepreneurial activities. The government needs to minimize its political intervention in entrepreneurship programs.