Rob Newell, Research Associate, Royal Roads University
Ann Dale, Canada Research Chair in Sustainable Community Development, Royal Roads University
Published October 15, 2011
This case study is a variant from the other case studies in the CRC library. It examines a program at the pilot project stage that has yet to be implemented, but we felt that there was enough information here from the preliminary research that we wanted to share these results now in the interests of speeding the exploitation of knowledge and innovation between Canadian communities. This case study analyses the potential successes and challenges that might occur with the Community Micro Lending Society’s (Victoria, BC) forthcoming Youth Micro Lending pilot project, scheduled to commence in September, 2011. When designing and developing the project, the society conducted a series of youth focus groups and administered surveys to collect information on how a micro-credit system could be specifically tailored to younger generations. This study analyzes the results of Community Micro Lending Society’s youth research and discusses the outcomes in terms of what societal factors might be conducive or counteractive to facilitating youth innovation and entrepreneurship.
Sustainable Development Characteristics
The key sustainable development characteristic of the program is its focus on attempting to reduce youth unemployment and increasing access to economic capital. Ideally, the economic, social, and ecological imperatives essential to sustainable community development must each be addressed in order to successfully achieve sustainability within community (Dale, 2001). In this particular case, creating a fund for youth entrepreneurship promotes job growth that directly addresses the economic and social imperatives of the community. An essential component of the social development of a community is the community members’ active participation in the economy as this promotes human capital formation (Midgley, 1999). In addition, fostering and developing the innovation of youth not only harnesses the ingenuity of new generations of professionals, but also has the potential to reduce the need to resort to illegal activities as a means of income (Edmondson, 2009).
The Community Micro Lending Society of Victoria designed the Youth Micro Lending program to address the growing trend of youth unemployment prevalent throughout the city (and nation). Since the recession took hold in 2008, Canadians aged 19 to 24 have experienced a disproportionate increase in both job loss (225,000) and unemployment (First Call, n.d). In British Columbia alone, youth aged 15 to 24 comprise 28.7% of the province’s total unemployment (Ibid, n.d). Although many people in this age range are unemployed likely because they are enrolled in secondary or post-secondary school, provincial statistics indicate that youth comprise 11.9% of the current unemployment insurance beneficiaries and this statistic is even higher for the Capital Region District of Victoria at 12.7% (BC Stats, 2010). Consequently, access to gainful employment and financial stability in the youth demographic is an imperative in achieving sustainable community development.
The society led a series of focus groups and administered surveys to determine what needs were specific to youth in a micro-loan system. The purpose of this preliminary work was to address the needs and qualities of youth as entrepreneurs rather than assuming that every demographic operates the same with respect to the entrepreneurial process. This case study analyses this work with respect to the potential it has for local youth engagement in the entrepreneurial process.
Potential Success Factors
Ken Stratford of Business Victoria (personal communication, July 4, 2011) described the younger demographic as the “Starbucks generation”, which refers to the multiple ways in how one can order a cup of coffee at Starbucks to customize it to specific tastes. The phenomenon of customizing a product to specifically meet one’s taste is prevalent in modern society and has created a culture of people looking for what is “just right” for them. In this manner, entrepreneurship is a viable option for today's youth as it allows them to create an employment environment that is ‘customized’ to their individual preferences and lifestyle choices.
Another factor conducive to youth entrepreneurship is the growing unemployment trends that appear to have a particularly significant effect on the youth demographic. The issues of persisting unemployment and difficulties in securing employment are compounded with the trend of the undergraduate degree decreasing the level of usefulness it held in previous generations (HRSDC, 2011). The number of adults in Victoria possessing an undergraduate degree/certificate is particularly high, with 28% of the city population over the age of 15 falling into this category (City of Victoria, 2009). With the devaluation of the undergraduate degree (in terms of enhancing employability), recent graduates face the frustration of being unemployed, or underemployed, after developing a sophisticated skill set. This is particularly problematic in British Columbia as many young people enjoy the lifestyle specific to that province. Youth might be more inclined to explore entrepreneurship to avoid being un/underemployed and use their recently acquired skill sets while maintaining their lifestyle choices.
The success of the September pilot program of the Youth Micro Lending initiative hinges on the fact that it provides a specific service that is not available elsewhere in Victoria. Lifecycles Project Society (a Victoria-based non-profit focused on sustainable food sources) previously offered a green business development program in the late-1990s to the early-2000s, but its funding was not renewed in recent years. Spectrum Job Centre has a Youth Program, however, this program is only available to at-risk youth. The Canadian Youth Business Foundation offers unsecured loans to Victoria residents, but loans are not accompanied with the mentoring and business coaching the Community Micro Lending Society will offer in the pilot project. The society will provide unique micro-credit opportunities to youth with the necessary business guidance to develop a sustainable business opportunity, and will, therefore, fill a community niche not yet occupied in Victoria.
Community Contact Information
Community Micro Lending
202-2610 Douglas Street
Director, Youth Micro Lending
Community Micro Lending
Suite G7, 1001 Douglas Street
What is Working?
The society's surveys revealed key data that influenced the design of the program in several ways. Surveys administered prior to program design revealed that 62% of the respondents “agree” or “somewhat agree” to Victoria’s business climate being youth-friendly. These results are encouraging in that majority of the youth surveyed believe that their entrepreneurial input would be accepted in Victoria’s business culture. Such an attitude implies that local youth might participate in a micro-credit program specific to their demographic.
Survey and youth focus group results showed many youth would prefer small loans for their first business ventures to start small, short-term operations, which is encouraging for the potential success of a youth loan program based on micro-lending. Survey respondents indicated a preference for small loans, citing difficulties in finding summer work in Victoria and a need for confidence-building through operating a smaller business for their first venture into entrepreneurship. Victoria is a city with the university culture representing a large proportion of the population (City of Victoria, 2009), and often summer jobs are subject to high competition from university students. Thus, a small loan could be useful for setting up a short-term project (i.e., house painting business, lawn-mowing, gardening, etc.), and this would allow for income generation without having to compete with the masses of students looking for summer work. In addition, small, short-term operations have the advantage of being low-risk business ventures, which could provide youth with confidence, practice, and skills for running larger businesses when they feel ready to commit to a more involved operation.
What is not Working?
The surveys and focus groups indicated issues that could present barriers to the program including the youths’ lack of confidence for starting a business due to a perception of having insufficient skills and concern for financial resources. Increasing confidence regarding skills can be addressed in a micro-credit program by including a business training component; however, the financial resources concern is more difficult to address. Financial concerns are particularly daunting to today's youth due to increasing levels of student debt, and young adults have been labeled “generation owe” due to a proportionately higher level of student loan that is common among today’s younger generation (Laucius, 2011). In addition, the higher cost of housing in British Columbia is also a major consideration. Incurring a high level of business debt for start-up and operations would discourage youth from participating in the Youth Micro Lending pilot because they would have to take on more debt above and beyond their student debt load.
Another challenge facing the design of the pilot project and youth entrepreneurship in Victoria, in general, is that self-employment is not necessarily considered as a career option to many youth in Victoria (and likely Canada). Many of the youth indicated that they envision a “normal” career pathway to consist of secondary and post-secondary schooling, followed by employment in a formal organization. The secondary school environment that is common to most schools throughout the province could be significantly influencing this idea of the “normal career path” as research has indicated that school environment does impact entrepreneurial spirit (Sobel & King, 2008). Consistent with this hypothesis, the focus group participants from the Artemis Alternative Education system displayed a higher level of entrepreneurial enthusiasm. The Community Micro Lending Society will need to address this issue through using community partner employment agencies to promote microloan and entrepreneurship to youth as a viable career option. Westley and Antadze (2009) noted that our cultural rules and beliefs can often limit our ability to engage in the innovation process, but these limitations can also be altered and amended by people.
If the pilot project evolves into a long-term program, the Youth Micro Lending initiative also faces the challenge of sustainable funding. Non-profit microcredit systems typically face funding issues, and they often have difficulties becoming self-sufficient (Visano, 2008). As a local example, Lifecycles Project Society offered a youth green-business entrepreneurship program with successful outcomes; however, the program eventually ended as it operated on an inconsistent granting system. The Community Micro Lending Society's initiative will operate as a pilot project in September, which makes it appropriate for grant funding because the pilot can serve as a short-term image of how well a fully operating program would work in Victoria. If the pilot is successful, however, then a sustainable funding scheme needs to be developed that will not be heavily reliant on ephemeral grant funding.
Financial Costs and Funding Sources
The total approximate cost of the Youth Micro Lending pilot project is $40,000, including both monetary and in-kind contributions. Funding and in-kind support is provided by a unique partnership between the United Way of Greater Victoria, the City of Victoria, the University of Victoria’s School of Public Administration, and the Prodigy Group. Any additional funds and support will be provided by the Community Micro Lending Society.
The research method had two components. Qualitative data was collected through five interviews with representatives of the community involved (or previously involved) in local youth entrepreneurship programs. Quantitative and (further) qualitative data was collected through an analysis of the youth focus groups and surveys administered by the society.
As this case study focuses on its youth micro lending pilot project, many of the interviews necessarily involved people affiliated with Community Micro Lending Society. Supplementary information on other youth employment support programs and the youth entrepreneurial spirit in Victoria was collected through interviews with representatives of Business Victoria, Spectrum Job Centre, and the Lifecycles Project Society. In addition, the primary author of this case study (Newell) attended and observed one of the four youth focus groups administered by the Community Micro Lending Society, and further insight was gathered through conversations with focus group participants.
The qualitative data examined in this case study was collected through focus groups and surveys administered by the Community Micro Lending Society to design, develop and launch the Youth Micro Lending pilot project. Four focus groups were led totaling 32 participants. Every participant completed a survey and an additional 19 surveys were completed online, for a total of 51 surveys. Survey questions were based of a Likert scale of agree, somewhat agree, disagree and unsure, and other qualitative responses.
Detailed Background Case Description
In early 2011, the Community Micro Lending Society, a Victoria-based micro-credit organization created in 2009 by Lisa Helps (Trudeau Scholar in 2006), designed a pilot project aimed specifically at promoting local youth entrepreneurship. The Youth Micro Lending pilot project was granted funding and is scheduled to begin in September, 2011. The pilot project provides youth aged 16 to 30 with micro-loans, access to micro-credit, and Youth Micro Lending participants will also be provided with mentorship, financial literacy training, and staff support over a 14-week period (Community Micro Lending Society, 2011). The pilot project will attempt to promote a community-based support network of youth entrepreneurs by conducting the business development process in peer youth groups. Additional business support will be available to youth after the launch of their businesses.
The success of a youth micro-loans program is reliant on effective support for business development. Stratford of Business Victoria (personal communication, July 4, 2011) noted the success rate of a business dramatically increases if business coaching is available during its development. The amount of coaching and support involved in the Youth Micro Lending pilot project will require a great deal of commitment from the Community Micro Lending Society staff; however, no other institution in Victoria provides this level of support for young entrepreneurs. As learned from the focus groups, many youth are not entirely confident in their ability to start a business; thus, effective business business coaching could lead to a successful pilot and possible continuance of the program.
In addition to strong business coaching, support from community partner organizations will be required for the success of this pilot project. Many youth in Victoria (and likely throughout Canada) do not see entrepreneurship as the “normal” career pathway, and starting a business might not be a consideration for even very ambitious youth. In addition, today’s youth are heavily burdened by a student loan debt, which could serve to discourage them from incurring more debt through business loans. Stratford (personal communication, July 4, 2011) observed that Victoria has a high success rate for new businesses and suggested this could be due to the high percentage of residents with post-secondary education; however, paradoxically, student debt resulting from post-secondary also appears to hinder entrepreneurial engagement and innovation. Community partners involved in employment services, such as the Spectrum Job Centre and the Victoria Immigrant and Refugee Centre Society, will also need to encourage entrepreneurial youth to participate in the pilot project to convey that self-employment is a viable career option.
Youth entrepreneurs have different needs than entrepreneurs of older generations. In particular, Cornell (2001) noted youth entrepreneurs prefer to work in groups of their peers
Government of British Columbia, n.d.Government of British Columbia, n.d.Bers (2010) Video gaming technology has a variety of commercial applications that could be used for training programs in industries ranging from medical (Wilson, Salas, Rosen, Taekman, & Augenstein, 2008 EMS World, 2009
A large majority of survey participants indicated they required business training and mentoring from an experienced business owner to start a business; only 57%, however, indicated they would need assistance with marketing. Individuals born after 1990 have grown-up with constant access to online technology and are generally fully fluent in social media communications (Liang, Commins, & Duffy, 2010). Youth, therefore, do not feel as strong a need for learning marketing techniques likely because they have grown up with social media methods for effectively communicating to large groups of people. With respect to youth confidence (or lack of) in entrepreneurship, the fact that youth are growing up with high computer literacy could be highlighted in the business coaching and support work to illuminate their skills.
The majority of survey participants responded that they would prefer to be mentored by an older adult with business experience (76% responded “yes”) and that they would not like aid from someone their own age even if this individual worked in the same field (84% responded “no”). Declining the help of someone from their age cohort might relate to confidence issues of thinking that youth might not have enough business experience to be effective mentors. Benefiting from the experience of older generations has significant advantages. Stratford (personal communication, July 4, 2011) observed youth are being raised in a culture of instant gratification because of the increased efficiency of service systems and technology, and this affects their ability to commit to the business development process. Launching a successful business takes a great degree of patience and confidence as revenue increases incrementally. This could be one lesson older mentors could pass onto younger generations of entrepreneurs.
The survey asked respondents whether sustainability principles would be incorporated into their business plan. The vast majority of the survey participants (87%) noted that maintaining connection to local community is important for their business values. In contrast, however, only 53% and 57% indicated that, respectively, environmental awareness and social issues were significant to their business values. The emphasis on connection to local community is consistent with youth’s desire to engage in the business development process using peer networks.
A youth micro-credit program has the potential to positively influence Victoria’s economic conditions by operating as job creation initiatives in periods of un/underemployment (Richardson, 2009) and by diversifying a local business culture’s traditional economic base. Although many micro-credit programs, however, experience high rates of payback (Visano, 2008), sustainable funding is a common and persistent problem for micro-credit organizations (Freedman, 2000). Some proponents of micro-credit programs suggest micro-loan systems should be considered a “public good” and should, therefore, receive routine funding (Visano, 2008). Governments change, however, and municipal, provincial, and federal support is often not consistent on a long-term basis. The Youth Micro Lending initiative, scheduled to commence in September 2011, is a pilot project and the success of this project will determine whether or not to proceed in determining how to make youth micro-credit sustainable in Victoria.
Other case studies in this library, particularly those describing alternative economic models such as co-operatives, demonstrate the importance of their contribution to sustainable community development. Their direct connection to local communities offers economic diversity, which may be an increasingly important community strategy for enhanced local agency in the face of exogenous shocks over which no one community has control. As well, access to meaningful employment of young people is critical for all communities, particularly smaller communities and single-resource communities struggling to diversify their economies. Diversity is fundamentally connected to local resilience in a community’s ability to respond, and adapt in an appropriate time frame (Newman & Dale, 2009). We have yet to realize the benefits of the ethereal economy (Ibid, 2009) or the knowledge economy, and perhaps young entrepreneurs will give greater meaning to the shape of their emergence.
- How can the Canadian school system enhance youth innovation and encourage entrepreneurship as a career option?
- How does an organization and/or peer group maintain business networks?
- How does a youth business culture effectively and cooperatively integrate itself with a traditional business culture run by older generations?
- How can a micro-credit agency facilitate recent graduates to consider entrepreneurship as a career option in light of heavy student debt?
- Should micro-credit be considered a “public good” and is there any role for governments?
- Are there alternative ways to fund micro-credit systems?
Resources and References
BC Stats. (2010). Regional district 17 – Capital. Retrieved July 20, 2011, from, http://www.bcstats.gov.bc.ca/data/sep/rd/Rd_17.pdf.
Bers, M. U. (2010). Let the games begin: Civic playing on high-tech consoles. Review of General Psychology, 14(2), 147-153. doi: 10.1037/a0019490.
City of Victoria. (2009). City of Victoria census information. Retrieved July 22, 2011, from, http://www.victoria.ca/cityhall/pdfs/sustainability-census-education.pdf.
Community Microlending Society. (2011). Youth community partners: send youth our way. Retrieved July 25, 2011, from, http://www.communitymicrolending.ca/#!__youth.
Cornell, R., & Organisation for Economic Cooperation and Development, P. (2001). Putting the Young in Business: Policy Challenges for Youth Entrepreneurship. Territorial Development. LEED Notebook No. 29.Dale, A. (2001). At the Edge: Sustainable Development in the 21st Century. Vancouver: UBC Press.
Edmondson, V. C. (2009). A new business: Redirecting black youth from the illegal economy. [Article]. Reclaiming Children & Youth, 18(3), 16-20.
EMS World. (2009). High-tech video game to train EMS in disaster response. EMS Magazine, 38(6), 16-16.
First Call: BC Child and Youth Advocacy Coalition. (n.d.). Youth specific employment service delivery model in BC. Retrieved July 20, 2011, from, http://www.firstcallbc.org/pdfs/transitions/2-employment%20services.pdf.
Freedman, M. (2000). Challenges to launching grassroots microlending programs: A case study. Journal of Developmental Entrepreneurship, 5, 235.
Government of British Columbia (n.d.) Vancouver Island and coast – Victoria economy. Retrieved July 21, 2011, from http://www.welcomebc.ca/wbc/index.page?WT.svl=Top.
Human Resources and Development Canada. (2011). Indicators of well-being in Canada. Retrieved July 20, 2011, from, http://www4.hrsdc.gc.ca/.3ndic.1t.4r@-eng.jsp?iid=29.
Laucius, J. (2011) Generation Owe; College students already face whopping student loans and gambling debts. Retrieved April 22, 2011, from,
Liang, B., Commins, M., & Duffy, N. (2010). Using social media to engage youth: education, social justice, & humanitarianism. Prevention Researcher, 17, 13-16.
Midgley, J. (1999). Growth, redistribution, and welfare: Toward social investment. The Social Service Review, 73 (1), 3-21.
Newman, L. and A. Dale. (2009). Large footprints in a small world: toward a macroeconomics of scale. Sustainability: Science, Practice, & Policy, 5(1): 9-19.
Richardson, M. (2009). Increasing microlending potential in the United States through a strategic approach to regulatory reform. [Article]. Journal of Corporation Law, 34(3), 923-942.
Sobel, R. S., & King, K. A. (2008). Does school choice increase the rate of youth entrepreneurship? Economics of Education Review, 27(4), 429-438.
Visano, B. (2008). Different and unequal: Payday loans and microcredit in Canada. Journal of Economic Asymmetries, 5(1), 109-123.
Westley, F., & Antadze, N. (2009). Making a difference: Strategies for scaling social innovation for greater impact. The Innovation Journal, Pg 34.
Wilson, K. A., Salas, E., Rosen, M., Taekman, J., & Augenstein, J. (2008). Games doctors play: Guiding principles for using simulations to train shared cognition. International Journal of Cognitive Technology, 13(2), 8-16.
The summary presented of the youth Entrepreneurship pilot project in Victoria represents a first-generation approach to sustainable development. The pilot project is driven by an outcomes based approach that youth being given access to micro lending funds can be self employed. In essence, I find the approach presented here to be one focused on the future state of reducing youth unemployment and increasing access to social capital. (Dale, Dushenko, Robinson, 2012)
Another area that is lacking in this case study is that of the ecological imperative. The fact that the focus of this project is primarily focused on social and economic imperatives reveals that different definitions of sustainable development are still being presented. As Dale, Dushenko and Robinson (2012) point out, during the second generation period (1995-2005) different perceptions and definitions of sustainable development appear that were more reflective of political and philosophical views. However there are still many groups out there who feel they are practicing sustainable development without having been brought into the current generation and understanding of how important the integration of the three imperatives are to its success.
Some of the components that are missing include the need for a deeper understanding of the goals of sustainable development by all participants and stakeholder. While the project has some of the characteristics of sustainable development such as stakeholder involvement and engagement, the project does not clearly align to the strategic vision and goals of urban/organizational sustainable development goals (Place) and requires critical measurements and indicators that are essential to knowing when the project has achieved what it is intended to do as a sustainable development project.