TY - JOUR

T1 - Teaching personal initiative beats traditional training in boosting small business in West Africa

AU - Campos, Francisco

AU - Frese, Michael

AU - Goldstein, Markus

AU - Iacovone, Leonardo

AU - Johnson, Hillary C.

AU - McKenzie, David

AU - Mensmann, Mona

N1 - Funding Information: We thank three anonymous reviewers for helpful comments, K. Yuki and V. Vargas Sejas for excellent research assistance, and L. Talon, L. Boileau, M. Adzodo, and K. Kounta for great support in the field. We gratefully acknowledge funding from IZA–Institute of Labor Economics, the Women’s Leadership in Small and Medium Enterprises trust fund, the Umbrella Facility for Gender Equality, and the World Bank’s Africa Gender Innovation Lab and Trade and Competitiveness Global Practice. We also acknowledge grant administration support from Innovations for Poverty Action. This project would not have been possible without the support of the Ministry of Commerce and of Private Sector Promotion of Togo, the Project Coordination Unit of the Private Sector Development Support Project (in particular, A. Kader Bawa and Y. Amegnizin), and the project’s partners [WAGES (Women and Associations for Gain both Economic and Social), FUCEC (Faîtière des Unités Coopératives d’Épargne et de Crédit du Togo), CECA (Cooperative d’Épargne et de Crédit des Artisans), APROMA (Action pour la Promotion du Monde Artisanal), DOSI (Delegation a l’Organisation du Secteur Informel), AFCET (Association des Femmes Chefs d’Entreprise du Togo), and CRM-Lome (Chambre Regionale de Metiers)]. Several of the authors work for the World Bank Group, but not directly for the International Finance Corporation, which produces the Business Edge training program being evaluated. M.F. was a short-term consultant for the World Bank on this project. The authors declare no other competing interests. Questionnaires, data, and replication code are available at http://microdata.worldbank.org/ index.php/catalog/2860. Publisher Copyright: © 2017, American Association for the Advancement of Science. All rights reserved.

PY - 2017/9/22

Y1 - 2017/9/22

N2 - 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. We tested 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.

AB - 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. We tested 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.

KW - Entrepreneurship

KW - Business psychology

UR - http://www.scopus.com/inward/record.url?scp=85029818350&partnerID=8YFLogxK

U2 - 10.1126/science.aan5329

DO - 10.1126/science.aan5329

M3 - Journal articles

C2 - 28935805

VL - 357

SP - 1287

EP - 1290

JO - Science

JF - Science

SN - 0036-8075

IS - 6357

ER -