Please use this form to submit your study for inclusion into our database. It will be checked by a member of the Innovation Growth Lab team, who may be in contact to ask for more information. Your email address * Your name * Title * The name of the study Short summary Standard business training programs aim to boost the incomes of the millions of self-employed business owners in developing countries by teaching basic financial and marketing practices, yet the impacts of such programs are mixed A brief description of the project's goals and its current state Abstract <p>Standard business training programs aim to boost the incomes of the millions of self-employed business owners in developing countries by teaching basic financial and marketing practices, yet the impacts of such programs are mixed. The hypothesis tested is whether a psychology-based personal initiative training approach, which teaches a proactive mindset and focuses on entrepreneurial behaviors, could have more success. A randomized controlled trial in Togo assigned microenterprise owners to a control group (n = 500), a leading business training program (n = 500), or a personal initiative training program (n = 500). Four follow-up surveys tracked outcomes for firms over 2 years and showed that personal initiative training increased firm profits by 30%, compared with a statistically insignificant 11% for traditional training. The training is cost-effective, paying for itself within 1 year.</p> The full abstract of the study, if available Links https://www.science.org/doi/10.1126/science.aan5329 Links to any published papers and related discussions Authors * Affiliations Academic and other institutes that the authors of the study are members of Delivery partner Organisations involved in delivering the trial, if appropriate Year Year Year199419951996199719981999200020012002200320042005200620072008200920102011201220132014201520162017201820192020202120222023202420252026 Month MonthJanFebMarAprMayJunJulAugSepOctNovDec Day Day12345678910111213141516171819202122232425262728293031 Journal Journal publishing the study, if available Publication stage * Working Paper Published Ongoing Research Forthcoming Discussion Paper Research theme * Entrepreneurship Innovation Business Growth Country Country or countries where this study took place. Topics What sort of topics does the study cover? Sample attributes Hypotheses / research question Does a psychology-based personal initiative training approach, which teaches a proactive mindset and focuses on entrepreneurial behaviors, have more success? Sample Trial population and sample selection Microbusiness owners. Participants’ average age is 41 years, 53% are women, and average schooling is 9 years. Their initial level of personal initiative is already reasonably high (4.2 points on a five-point Likert scale). All businesses have been operating for at least 12 months, are not formally registered and on average have three employees. Mean monthly profits are about USD 199, and half of the microfirms make less than USD 84 a month. They operate in a broad mix of sectors (27% manufacturing, 48% commerce, 25% services). Participant businesses have significant scope for improvement in terms of business practices. Number of treatment groups Size of treatment groups Size of control group Unit of analysis Clustered? Yes No Cluster details Trial attributes Treatment description Firms are offered either traditional training or personal initiative training. Traditional training: an internationally accredited program (Business Edge) developed by the International Finance Corporation that focuses on four core topics: accounting and financial management, marketing, human resource management, and formalisation. Personal initiative training: a new training programme focusing on teaching a mindset of self-starting behaviour, innovation, identifying and exploiting new opportunities, goal-setting, planning and feedback cycles, and overcoming obstacles. The training is constituted by 36 hours classroom instruction and by 3 hours in-site visits by the trainer to answer any follow-up questions that business owners might have and assist with the implementation of the concepts learned during training. These visits take place once a month for four months. Rounds of data collection Baseline data collection and method The baseline survey lasted approximately 3 hours and included questions on the business, the entrepreneur, and the entrepreneur’s household. The survey was administered face-to-face using paper questionnaires, and translated into three languages: French, Ewe and Kabiye. Data collection method and data collected Evaluation Outcome variables <p>Business survival, Monthly sales and profits, business practices, personal initiative, capital and labour inputs, diversified product line, access to finance index</p> Results <p>Both training programmes increase adoption of good basic business practices by about 6 percentage points, despite the personal initiative training not explicitly focusing on teaching those. Both training programmes increase personal initiative, despite the traditional business training not focusing on that. However, the impact is almost twice as large from the personal initiative training. Both training programs led to firms using more inputs, engaging more in innovation activities and improving access to credit. But these impacts were significantly larger for firms offered the personal initiative training. In particular, the personal initiative training led firms to introduce more new products and increased the likelihood that these new products were their own idea and new for the neighbourhood (rather than just copied from others). Neither training had an impact on firm survival. The personal initiative training has large positive effects on monthly sales (17% increase) and profits (30% increase) compared to firms not receiving any training, while the traditional training does not. The positive effects of the personal initiative training on sales and profits occur across businesses of all sizes, and for both women and men. Given its large and sustained effects on profits, the personal initiative training pays back its cost within approximately one year. Return on investment is estimated to range from 140% to 393% over a ten-year period.</p> Intervention costs The personal initiative training cost US$756 per invited participant (similar to that of the traditional training), yielding a $60 per month increase in monthly profits over the first two years. Cost benefit ratio Reference Campos, F., Frese, M., Goldstein, M., Iacovone, L., Johnson, H. C., McKenzie, D., & Mensmann, M. , 2017. Teaching personal initiative beats traditional training in boosting small business in West Africa. Science, 357(6357), 1287-1290. Citation for use in academic references
