Differences in productivity between firms, which are especially large in developing countries, are often attributed to the quality of their management practices. Researchers tested the effect of management practices by randomly assigning some Indian textile firms to receive free consulting advice. Firms that received this advice significantly raised their productivity within a year, resulting in an estimated increase in annual profits of US$325,000.
Many microentrepreneurs in developing countries may lack the training or skills to make the most effective financial and business management decisions. In India, researchers tested a low-cost and easy-to-scale financial capability intervention that delivered easy-to-remember and easy-to-adopt rules of thumb via voice-based mobile phone messages.
Female entrepreneurs in developing countries often face significant stress from the combination of long working hours, family responsibilities and barriers to work that requires being away from home1,2. This randomized evaluation studied whether targeting women’s ability to cope with such daily stresses could help improve well-being and business outcomes.
Microenterprises make up a large portion of employment in the developing world but little is known about constraints on their growth. Researchers partnered with the consulting firm Ernst & Young to test whether providing tailors in Accra with individualized consulting, a sizable cash grant, or both can facilitate growth.
Millions of people make their living running microenterprises, but these businesses typically fail to expand or provide more than subsistence-level income to their owners. Giving loans and training to small businesses offer the possibility of helping them grow, but research has not found this to be effective. Yet, much of the existing evidence looks at women-owned businesses, as they are the primary recipients of microfinance programs.
Differences in management quality are an important contributor to productivity differences across countries. A key question is how best to improve poor management in developing countries. This evaluation tested two different approaches aimed at improving management in Colombian auto parts firms. The first was an intensive and expensive one-on-one consulting, while the second provided consulting to small groups of firms at approximately one-third of the cost of the individual approach.
Small businesses are often believed to serve as engines for innovation, employment and social mobility, due to their flexibility in responding to new opportunities and their potential for rapid growth. In developing countries, SMEs make up a particularly large part of the economy, yet data suggests that very few small enterprises in developing countries grow into larger businesses.
Small and medium enterprises (SMEs) are thought to be important drivers of growth in developing economies, but entrepreneurs in these countries face many barriers, including poor access to training, finance, and business networks. In Colombia, Fundación Bavaria’s “Destapa Futuro” (Open the Future) program identifies promising enterprises and provides them with a suite of financial, technical, business, and training resources.
Small and medium enterprises (SMEs) are thought to be important drivers of growth in developing economies, but entrepreneurs in these countries face many barriers, including access to business training, finance, and business networks. In Bogotá, Colombia, Fundación Bavaria’s “Destapa Futuro” (Open the Future) program identifies promising enterprises and provides them with a suite of financial, technical, business and training resources.
A simplified financial training based on “rules of thumb” improved business practices and outcomes among microentrepreneurs in the Dominican Republic, while standard, fundamentals-based accounting training produced no significant effect.
In recent years, the ready-made garment sector has experienced rapid growth in Bangladesh. While overall, most of these new jobs have gone to women, few of them have been in management. At the same time, firms are under pressure to increase productivity. Researchers are exploring whether a vocational training program can successfully improve productivity and help women advance into management.
Previous research suggests that in many developing countries businesses are less productive on average than their counterparts in developed countries. Additionally, productivity across firms varies more in developing countries than in developed countries. These market characteristics suggest that the forces of competition, growth, and innovation that tend to drive productivity in developed countries may be weaker in developing countries.
Youth unemployment is a major challenge in many low-income countries, and evidence suggests young women in urban areas are disproportionately affected. This study in Kenya evaluates the Girls Empowered by Microfranchising program, which connects unemployed participants with local business franchisors and provides mentoring and startup capital for participants to launch businesses.
Many governments and organizations use finance and management training as a tool to promote small and medium enterprise growth in developing countries, but it is not clear if or how information from these trainings is shared across SMEs operating in the same area. Researchers are evaluating the extent to which firms share information acquired in business skills training programs to assess whether networks of small businesses act as partners or competitors, and by extension, whether such trai
Lack of managerial capital remains one of the core challenges to SME growth in developing countries. However, rigorous evidence on the impact of programs focused on improving managerial skills is limited. This study evaluates a program which offers training and consulting for managerial staff in garment factories. It focuses on understanding how new management practices are adopted and implemented and what determines their success.