The Profits of Wisdom: The Impact of a Business Support Program in Tanzania

Abstract

Business training programs in low-income settings have shown only limited impacts on firm revenues and profits, particularly for female entrepreneurs. A randomized design was used to compare the impacts of two types of business training programs targeting women with established small businesses in urban Tanzania. The basic version relied on in-class sessions to strengthen the participants’ managerial and technical skills. In the enhanced version, training was supplemented by visits from business coaches to the sites of participants’ activities, as well as other services tailored to their individual needs. The basic training had no impact on business practices or outcomes. The enhanced training positively impacted the adoption of new practices but had no effects on revenue or profits. However, the average masks large heterogeneous effects: only more experienced entrepreneurs benefited from the program. This finding suggests that more careful targeting can improve the impact of business training programs.

Making Entrepreneurs: Returns to Training Youth in Hard Versus Soft Business Skills

“…Larger effects for higher potential individuals is consistent with the calls for better targeting emerging from recent work. Having estimated no program effects for business training or workfare programs, some authors examined impact heterogeneity and concluded that a more careful targeting of businesses could improve the impacts these programs (e.g., Bardasi et al, 2021;Bertrand et al, 2021, and citations therein). The efficacy of SEED for youth with lower levels of education/ability remains untested and is an avenue we are planning on exploring.…”

The impact of growth mindset training on entrepreneurial action among necessity entrepreneurs: Evidence from a randomized control trial

“…Despite significant resources devoted to training entrepreneurs in Africa, the impact of such programs has been modest, leading scholars, policy makers, and non-government organizations searching for insights into how to enhance training to be more impactful. Recent studies suggest a better match between the type of training and entrepreneur experience (Anderson et al, 2021;Bardasi et al, 2021;Berge & Pires, 2020) and gender (Bandiera et al, 2020;McKenzie & Puerto, 2021) may enhance the effectiveness of training programs. Other studies argue for better integration between training and ongoing mentoring (Bardasi et al, 2021), financial assistance (Berge et al, 2015), and psychological training (Bischoff et al, 2020;Campos et al, 2017) This research also contributes to the mindset learning literature (Dweck, 2006(Dweck, , 2015 in the African context, by examining growth mindset in the context of practicing entrepreneurs in Africa and not just students.…”

“…Recent studies suggest a better match between the type of training and entrepreneur experience (Anderson et al, 2021;Bardasi et al, 2021;Berge & Pires, 2020) and gender (Bandiera et al, 2020;McKenzie & Puerto, 2021) may enhance the effectiveness of training programs. Other studies argue for better integration between training and ongoing mentoring (Bardasi et al, 2021), financial assistance (Berge et al, 2015), and psychological training (Bischoff et al, 2020;Campos et al, 2017) This research also contributes to the mindset learning literature (Dweck, 2006(Dweck, , 2015 in the African context, by examining growth mindset in the context of practicing entrepreneurs in Africa and not just students. While scholars have examined growth mindset in both a poverty context (e.g., Burnette et al, 2018;Yeager et al, 2019) and an entrepreneurship context (e.g., Burnette et al, 2019), to the best of our knowledge none of these studies have examined both of these contexts together, nor have they been studied outside of the context of formal education settings.…”

“…Some studies have observed positive effects of training on entrepreneurial outcomes (Galloway & Brown, 2002; Kolvereid & Moen, 1997; Zhao et al, 2005), whereas others have observed the opposite (Cox et al, 2002; Honig & Karlsson, 2004; Zampetakis et al, 2015). For example, Bardasi et al (2021) found that training and coaching programs focused on entrepreneurs in urban Tanzania were not effective for less‐experienced entrepreneurs who had less belief in their ability to succeed as entrepreneurs. A conclusion they draw from their research is that training programs should target more experienced entrepreneurs who already have confidence in their ability to experiment with new ideas received from their trainings.…”

“…To address this, specialized training programs have been designed to equip necessity entrepreneurs with the skills necessary for entrepreneurial action (Anderson et al, 2018; Gielnik et al, 2014). While some studies have demonstrated the effectiveness of such programs (Alzua et al, 2020; Bandiera et al, 2018), limitations persist, demanding a deeper understanding of the most impactful training approaches (Bae et al, 2014; Bardasi et al, 2021; Berge & Pires, 2020; Quinn & Woodruff, 2019).…”