The Impact of Soft-Skills Training for Entrepreneurs in Jamaica

A randomized control trial with 945 entrepreneurs in Jamaica shows positive shortterm impacts of soft-skills training on business outcomes. The effects are concentrated among men, and disappear twelve months after the training. It is argued that the main channel is increased adoption of recommended business practices, exclusively observed in the short run. There are persistent effects on an incentivized behavioral measure of perseverance after setbacks, a focus of this training. A comparison is drawn with a course focused only on soft-skills to one that combines soft-skills training with traditional business training. The effects of the combined training are never statistically significant.

Policy implications

A psychology-based soft-skills training can help develop an entrepreneurial mindset. Soft-skills training outperform hard and soft skills combined training on triggering the adoption of good business practices, but none have persistent effects on business outcomes.

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Hypotheses/research question

Does training entrepreneurs on soft skills related to personal initiative improve the business outcomes of male and female entrepreneurs in Jamaica? Moreover, it aims to study whether combining training on soft and hard skills can be more effective than a more intensive training on only soft skills.

Study design

Multiple treatment with stratified randomization

Small business owners. 58 percent are women, average age is 42 years old and 61 percent have more than secondary education. Most 63 percent have parents who also were entrepreneurs and 64 percent report wanting to change something in their business. Levels of personal initiative, perseverance indexes, locus of control, and willingness to take risks are high among participants. All businesses have five or less employees, and 70% have no employees. Average monthly sales are USD 680, but half of the businesses report monthly sales below 230 USD. About a half are formally registered, 35 percent have been created during the past year and only 61 percent had been operating continuously during the past year. Businesses operate in a wide mix of industries, the main ones being manufacturing (26 percent) and retail (19 percent). In terms of business practices there is room for improvement.

Cost benefit ratio

Taken at face value, the US$75 effect on winsorized profits after three months, ifconstant over those three months, would imply a return to investment (ROI) of 6% (75*3/212–1). If the effect had lasted six months, then the ROI would have been 112%. However, given the lack of robust statistical significance on the winsorized profits variable, this calculation should be interpreted with caution.

Rounds of data collection

A baseline survey, a short-term survey conducted 3 months after the intervention, and a second follow-up survey conducted 12 months after the intervention.

Baseline data collection and method

In order to recruit entrepreneurs for the training, the research team conducted a telemarketing campaign. They mentioned that participants who completed an application form would be entered in a lottery for a chance to win a free slot at the training. Overall, around 2,000 entrepreneurs living in Kingston, the capital city of Jamaica, and surrounding parishes expressed interest in the training. Some entrepreneurs completed a baseline survey during the first contact, and some were re-contacted to complete a baseline survey either by phone or online. The survey took around 30 min and included questions about demographics, business outcomes, business practices, and Likert scale-type questions to measure soft skills (personal initiative, perseverance, and locus of control).

Data collection method and data collected

In addition to the baseline survey, attendance records for each session were filled out by each instructor.and ourse evaluations and a short knowledge test were filled out by participants in the next to last session. The second follow-up survey included a comprehensive questionnaire with modules on business inputs and outcomes (investments, assets, costs, sales, profits, innovation, etc.), demographics and household characteristics of the entrepreneur, and detailed psychological modules to measure a range of soft skills. Specifically, a novel instrument, based on a game with real monetary incentives designed to measure grit was implemented.

Stratification

By gender, education (more than secondary education vs. secondary or less), selected location of the course (four strata for different locations) and having at least one employee.

Delivery partner

Jamaican Business Development Corporation (JBDC)

Reference

Ubfal, D., Arraiz, I., Beuermann, D.W., Frese, M., Maffioli, A. and Verch, D., 2022. The impact of soft-skills training for entrepreneurs in Jamaica. World Development, 152, p.105787.

The Impact of Soft-Skills Training for Entrepreneurs in Jamaica

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