Small Business Training to Improve Management Practices in Developing Countries : Reassessing the Evidence for 'Training Doesn’t Work'
Despite the popularity of business training among policy makers, the use of business training has faced increasing skepticism. This is, in part, fueled by the fact that most of the first wave of randomized experiments in developing countries could...
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World Bank, Washington, DC
2020
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| Online Access: | http://documents.worldbank.org/curated/en/593081600709463800/Small-Business-Training-to-Improve-Management-Practices-in-Developing-Countries-Reassessing-the-Evidence-for-Training-Doesn-t-Work http://hdl.handle.net/10986/34506 |
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okr-10986-345062022-09-20T00:09:20Z Small Business Training to Improve Management Practices in Developing Countries : Reassessing the Evidence for 'Training Doesn’t Work' McKenzie, David BUSINESS TRAINING MICROENTERPRISES MANAGEMENT PRACTICES SOFT SKILLS ENTREPRENEURSHIP EDUCATION KAIZEN METHODS MENTORING PSYCHOLOGY Despite the popularity of business training among policy makers, the use of business training has faced increasing skepticism. This is, in part, fueled by the fact that most of the first wave of randomized experiments in developing countries could not detect statistically significant impacts of training on firms' profits or sales. This paper revisits and reassesses the evidence for whether small business training works, incorporating the results of more recent studies. A meta-analysis of these estimates suggests that training increases profits and sales on average by 5 to 10 percent. The author argues that this is in line with what is optimistic to expect given the relatively short length of most training programs, and the expected return on investment from the cost of such training. However, impacts of this magnitude are too small for most experiments to detect statistically. Emerging evidence is provided on five approaches for improving the effectiveness of traditional training by incorporating gender, kaizen methods, localization and mentoring, heuristics, and psychology. Training programs that incorporate these elements appear to deliver improvements over traditional training programs on average, although with considerable variation. Given that training delivers some benefits for firms, the challenge is then how to deliver a quality program on a cost-effective basis at a much larger scale. Three possible approaches to scaling up training are discussed: using the market, using technology, or targeting and funneling firms. 2020-09-24T20:39:50Z 2020-09-24T20:39:50Z 2020-09 Working Paper http://documents.worldbank.org/curated/en/593081600709463800/Small-Business-Training-to-Improve-Management-Practices-in-Developing-Countries-Reassessing-the-Evidence-for-Training-Doesn-t-Work http://hdl.handle.net/10986/34506 English Policy Research Working Paper;No. 9408 CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo World Bank World Bank, Washington, DC Publications & Research Publications & Research :: Policy Research Working Paper |
| repository_type |
Digital Repository |
| institution_category |
Foreign Institution |
| institution |
Digital Repositories |
| building |
World Bank Open Knowledge Repository |
| collection |
World Bank |
| language |
English |
| topic |
BUSINESS TRAINING MICROENTERPRISES MANAGEMENT PRACTICES SOFT SKILLS ENTREPRENEURSHIP EDUCATION KAIZEN METHODS MENTORING PSYCHOLOGY |
| spellingShingle |
BUSINESS TRAINING MICROENTERPRISES MANAGEMENT PRACTICES SOFT SKILLS ENTREPRENEURSHIP EDUCATION KAIZEN METHODS MENTORING PSYCHOLOGY McKenzie, David Small Business Training to Improve Management Practices in Developing Countries : Reassessing the Evidence for 'Training Doesn’t Work' |
| relation |
Policy Research Working Paper;No. 9408 |
| description |
Despite the popularity of business
training among policy makers, the use of business training
has faced increasing skepticism. This is, in part, fueled by
the fact that most of the first wave of randomized
experiments in developing countries could not detect
statistically significant impacts of training on firms'
profits or sales. This paper revisits and reassesses the
evidence for whether small business training works,
incorporating the results of more recent studies. A
meta-analysis of these estimates suggests that training
increases profits and sales on average by 5 to 10 percent.
The author argues that this is in line with what is
optimistic to expect given the relatively short length of
most training programs, and the expected return on
investment from the cost of such training. However, impacts
of this magnitude are too small for most experiments to
detect statistically. Emerging evidence is provided on five
approaches for improving the effectiveness of traditional
training by incorporating gender, kaizen methods,
localization and mentoring, heuristics, and psychology.
Training programs that incorporate these elements appear to
deliver improvements over traditional training programs on
average, although with considerable variation. Given that
training delivers some benefits for firms, the challenge is
then how to deliver a quality program on a cost-effective
basis at a much larger scale. Three possible approaches to
scaling up training are discussed: using the market, using
technology, or targeting and funneling firms. |
| format |
Working Paper |
| author |
McKenzie, David |
| author_facet |
McKenzie, David |
| author_sort |
McKenzie, David |
| title |
Small Business Training to Improve Management Practices in Developing Countries : Reassessing the Evidence for 'Training Doesn’t Work' |
| title_short |
Small Business Training to Improve Management Practices in Developing Countries : Reassessing the Evidence for 'Training Doesn’t Work' |
| title_full |
Small Business Training to Improve Management Practices in Developing Countries : Reassessing the Evidence for 'Training Doesn’t Work' |
| title_fullStr |
Small Business Training to Improve Management Practices in Developing Countries : Reassessing the Evidence for 'Training Doesn’t Work' |
| title_full_unstemmed |
Small Business Training to Improve Management Practices in Developing Countries : Reassessing the Evidence for 'Training Doesn’t Work' |
| title_sort |
small business training to improve management practices in developing countries : reassessing the evidence for 'training doesn’t work' |
| publisher |
World Bank, Washington, DC |
| publishDate |
2020 |
| url |
http://documents.worldbank.org/curated/en/593081600709463800/Small-Business-Training-to-Improve-Management-Practices-in-Developing-Countries-Reassessing-the-Evidence-for-Training-Doesn-t-Work http://hdl.handle.net/10986/34506 |
| _version_ |
1764481047081254912 |