Improving Business Practices and the Boundary of the Entrepreneur : A Randomized Experiment Comparing Training, Consulting, Insourcing and Outsourcing
Many small firms lack the finance and marketing skills needed for firm growth. The standard approach in many business support programs is to attempt to train the entrepreneur to develop these skills, through classroom-based training or personalized...
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| Format: | Working Paper |
| Language: | English |
| Published: |
World Bank, Washington, DC
2021
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| Subjects: | |
| Online Access: | http://documents.worldbank.org/curated/en/377351608212969114/Improving-Business-Practices-and-the-Boundary-of-the-Entrepreneur-A-Randomized-Experiment-Comparing-Training-Consulting-Insourcing-and-Outsourcing http://hdl.handle.net/10986/34979 |
| Summary: | Many small firms lack the finance and
marketing skills needed for firm growth. The standard
approach in many business support programs is to attempt to
train the entrepreneur to develop these skills, through
classroom-based training or personalized consulting.
However, rather than requiring the entrepreneur to be a
jack-of-all-trades, an alternative is to move beyond the
boundary of the entrepreneur and link firms to these skills
in a marketplace through insourcing workers with functional
expertise or outsourcing tasks to professional specialists.
A randomized experiment in Nigeria tests the relative
effectiveness of these four different approaches to
improving business practices. Insourcing and outsourcing
both dominate business training; and do at least as well as
business consulting at one-half of the cost. Moving beyond
the entrepreneurial boundary enables firms to use higher
quality digital marketing practices, innovate more, and
achieve greater sales and profits growth over a two-year horizon. |
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