Policy Brief Issue 26 DESIGNING TARGETED BUSINESS TRAININGS FOR IMPACT: GENDER INSIGHTS FROM A WOMEN ENTREPRENEURS’ INNOVATION LAB PROGRAM IN TANZANIA The Gender Innovation Lab (GIL) conducts impact Authors: Elena Bardasi, Marine Gassier, Markus Goldstein, Alaka Holla evaluations of development interventions in Sub-Saharan Africa, seeking to generate KEY MESSAGES evidence on how to close the gender gap in earnings, • Business training in low-income countries have scarcely productivity, assets and shown impacts on revenues and profits, especially for female agency. The GIL team is entrepreneurs. In this study, we test two kinds of trainings, one currently working on over basic in-class training and one enhanced version supplemented 50 impact evaluations in 21 with individualized coaching, to test their respective impact countries with the aim of building an evidence base on women with established small businesses in Tanzania. with lessons for the region. • We found that targeting the right entrepreneurs can improve The impact objective of GIL is the effectiveness of a tailored training and even lead to increasing take-up of effective improvements in performance. In the study, the participants’ policies by governments, level of experience influenced the degree of impact of the business development organizations and the private sector in order trainings. While on average neither training led to revenue or to address the underlying profit growth, entrepreneurs with at least nine years of experience causes of gender inequality benefitted from the enhanced program through increased in Africa, particularly in terms revenues. In comparison, entrepreneurs with little experience of women’s economic and social empowerment. The lab had reduced revenues after participating in the program. aims to do this by producing • We also determined that the content and delivery method and delivering a new body of of business support provided to the female entrepreneurs evidence and developing a compelling narrative, geared impact their adoption of business practices. While the basic towards policymakers, on what training did not have an impact on business practices, participants works and what does not work in the enhanced training were more likely to adopt new practices. in promoting gender equality. http://www.worldbank.org/en/programs/africa-gender-innovation-lab Many women in low-income countries are self- an experiment to identify the impacts of two types of employed in small-scale, low-productivity businesses. business training programs on business outcomes Business training is often cited as a critical intervention for female entrepreneurs with high growth potential to increase the productivity of these enterprises and and active in diverse sectors in urban Tanzania. contribute to national development. However, business training programs in low-income settings have shown The trainings were only delivered to women, with the limited, if any, impacts on firm revenues and profits, specific goal of enhancing their skills and helping them particularly for female entrepreneurs. This is in part overcome some of the gender-specific obstacles they because women face gender-specific constraints face. The design of the trainings recognized that female that prevent them from reaping the benefits of such entrepreneurs juggle several commitments and as a trainings. These constraints include lower educational result face significant time and mobility constraints. attainments, lower endowments in assets, lower control To address these constraints, classes were run during over their resources or time, and restricted mobility. times and for durations that were more convenient Prior research shows that interventions that do succeed for women, were organized in locations accessible to in changing the business practices of their female women, and offered compensation for travel expenses. beneficiaries are designed to specifically target these In the basic version, entrepreneurs were provided constraints and tend to combine general management in-class sessions for 6 weeks, to strengthen their training with sector-specific technical training. managerial and technical skills. They were taught general business skills, including market analysis, cost SO WHAT TO DO ABOUT IT control and leadership training, as well as more targeted To find out what could make business training work technical courses relevant to their sector of operation. for female entrepreneurs, the World Bank’s Africa Region Gender Innovation Lab, in partnership with In the enhanced version, the basic training was the Italian Association for Women in Development supplemented by an orientation workshop, as well as (AIDOS) and Tanzania Gatsby Trust (TGT), launched individual visits from business and technical coaches to TWO DIFFERENT TYPES OF TRAININGS: BASIC TRAINING AND ENHANCED TRAINING In-class Entrepreneurship Sector- Classes organized BASIC sessions for management and and business management specific technical at convenient times and location TRAINING technical skills training courses for women + In-class Entrepreneurship Sector- Classes organized Two-day Individualized Sector-based ENHANCED sessions for management and and business management specific technical at convenient times and location orientation coaching sessions by management business development TRAINING technical skills training courses for women and technical services by coaches, on experts, on business site business site the site of participants’ activities for a year following the programs. Individualized coaching targeting the training, providing them with management, marketing, specific sector and needs of participants is more financial and technical advice, and connecting them likely to help female entrepreneurs to acquire relevant with consultants and mentors. These visits were tailored business skills. This deserves special consideration to the specific needs of the participants. For example, especially when the targeted group is made of women, entrepreneurs engaged in food-related sectors were who face gender-specific obstacles that should be advised on quality control. These additional features addressed to create the conditions for the training to were designed to go further in addressing mobility be effective. Notably, entrepreneurs were more likely and time constraints, as well as to help with variation to pay themselves a wage, suggesting a greater ability in education levels through face-to-face meetings. to separate business and household budgets, and were also more likely to formalize, be it registering their HERE’S WHAT WE DID businesses or acquiring a tax identification number. From the pool of program applicants, 850 entrepreneurs Training may increase knowledge, as reflected in were selected and 821 participated in a baseline the adoption of business practices, but it does survey from June-July 2010 before starting the training not always translate into improved business program. The entrepreneurs were then randomly outcomes. Neither the basic training nor the assigned to either the control group, basic training enhanced version delivered to female entrepreneurs group (in-class management and technical training) resulted in better business outcomes on average or the enhanced training group (orientation + in-class after two years. This shows that such trainings management and technical training and individualized should be complemented by programs targeting coaching sessions). The training programs were then additional binding constraints that limit the ability implemented. We collected follow up survey data of early entrepreneurs to grow their businesses. from July-August 2012, a year after the last in-class session and two years after the baseline survey was We find that entrepreneurs with low levels of conducted and the whole intervention started. experience actually showed reduced revenues after participating in the programs. This may be because HERE’S WHAT WE FOUND the training content was not helpful to participants who We do not observe any impact on business may not know how to adequately apply it in practice. practices for the entrepreneurs assigned to the These considerations are crucial for policy makers basic training. The enhanced training, on the seeking to support entrepreneurs: developing a training other hand, increased adoption of these practices. that does not cater to the target group’s specific need This indicates that the delivery method has a could at best have no impact on their revenues and large impact on the effectiveness of training productivity, and at worst lead to a decrease in revenues. ENTREPRENEURSHIP AND EXPERIENCE 9+ years 14+ years Entrepreneurs with over 9 years of experience see revenues Entrepreneurs with over 14 years of experience see revenues increase after participating in enhanced training increase after participating in the basic training However, seasoned entrepreneurs - those with at least nine years of experience in their main business activity when the program started- saw their revenues increase after participating in the enhanced training package. This increase was larger the more experienced they were at the start of the training: the longer their experience, the higher the impact. Very experienced entrepreneurs who received the basic training were also better able than less experienced entrepreneurs to benefit from it. In the case of basic training, the impact is only positive for entrepreneurs with an extremely long tenure (more than 14 years). The kind of training provided in Tanzania should be targeted at experienced entrepreneurs, as their experience complements the managerial skills provided by training programs. This result suggests that this type of training requires experience to make the most of it. MOVING FORWARD A likely reason for these heterogeneous impacts is that different entrepreneurs face different sets of constraints, depending in part on their experience. Experienced entrepreneurs may have already overcome other binding constraints that still limit the ability of less mature entrepreneurs to grow their businesses. Identifying these constraints would help design trainings that effectively address the needs of new entrepreneurs. One way to achieve this may be to mobilize insights from psychology. For instance, GIL’s recent research found that Personal Initiative Training Leads to Remarkable Growth of Women-Owned Small Businesses in Togo. It may also be that certain personality traits enabled experienced entrepreneurs to benefit more from the training. Personal characteristics, such as grit, may have made them more likely to successfully manage a business for longer than the other entrepreneurs, and also made them more likely to successfully take advantage of the trainings. In this case, identifying these personality traits, adjusting the trainings to target women according to whether they display these characteristics, and developing them in those who don’t, may be more helpful than focusing on tenure. Indeed, GIL’s Soft Skills for Hard Constraints research found a positive link between women farmers’ noncognitive entrepreneurial skills (such as perseverance, passion FOR MORE INFORMATION, for work, and optimism) and their performance in poor rural settings. PLEASE CONTACT For more information on this study: Markus Goldstein mgoldstein@worldbank.org http://documents.worldbank.org/curated/en/257221513609451157/The- Rachel Coleman profits-of-wisdom-the-impacts-of-a-business-support-program-in-Tanzania rcoleman1@worldbank.org 1818 H St NW This work has also been funded in part by The Umbrella Facility for Gender Equality (UFGE), a World Bank Group multi- Washington, DC 20433 USA donor trust fund expanding evidence, knowledge and data needed to identify and address key gaps between men and women to deliver better development solutions that boost prosperity and increase opportunity for all. The UFGE has received generous contributions from Australia, Canada, Denmark, Finland, Germany, Iceland, Netherlands, Norway, Spain, Sweden, Switzerland, United Kingdom, and the United States. The first draft of this policy brief was released in July 2018.