While entrepreneurship training programmes can modestly enhance business survival, income, and management skills in developing countries, their effectiveness depends on tailored design, sustained engagement, and complementary support such as finance, peer learning, and technology.
Editor's note: This episode of VoxDevTalks is also available on Spotify, Apple Podcasts, and YouTube.
Issue 4 of our VoxDevLit on Training Entrepreneurs is out now! In this episode of VoxDevTalks, David McKenzie discusses what we know – and what we still need to learn – about entrepreneurship in developing countries. The review, co-edited with Chris Woodruff, summarises evidence from across LMICS, highlighting both the potential and the limitations of entrepreneurial training programmes.
“There are just so many people trying to make a living running a business in developing countries. If we’re trying to help the livelihoods of people in developing countries, we need to be able to work with these entrepreneurs and see if we can help them do a bit better.”
Business management and good operational practices, McKenzie notes, are critical to firm success, yet not always widely adopted – a gap these programmes aim to fill.
Who are the entrepreneurs?
The term ‘entrepreneur’ covers a remarkably wide spectrum. As McKenzie puts it:
“That term does cover the whole spectrum, from subsistence micro-enterprise owners… up to the large number of small and medium enterprises… and then the much smaller group… high-growth entrepreneurs trying to start up new, innovative businesses.”
Because of this diversity, training is not ‘one size fits all’. What may work for a self-employed market trader may not be appropriate for a small manufacturing firm or a tech start-up. Policymakers must therefore differentiate their objectives and tailor support accordingly.
The skills that matter most
Even if bureaucratic and market barriers were magically removed, entrepreneurs would still need solid management and organisational skills to thrive. McKenzie points to a growing body of evidence:
“Better management practices matter a lot for firms… your ability to be able to organise production, acquire customers, monitor finances, make budgets and plan, find the right workers and manage those workers well – all are critical for firm success.”
Importantly, these skills are not innate. Addressing the age-old question of whether entrepreneurs are born or made, McKenzie argues:
“We’re increasingly seeing that there are many types of entrepreneurial skills that can be taught.”
This includes not only accounting and marketing but also psychological traits such as initiative, proactiveness, and resilience – characteristics that can be nurtured through well-designed interventions.
What types of training work?
The VoxDevLit reviews a wide range of programmes, from classroom-based sessions for micro-entrepreneurs to advanced consulting for larger firms.
Early programmes generally consisted of short group-based classroom sessions, lasting from three to twelve days, that concentrated on fundamental business skills such as record keeping, budgeting, inventory management, and marketing.
More recent approaches use behavioural or psychological techniques. A notable example is a ‘personal initiative’ training in Togo, which had three times the impact of a standard training programme, with profits increasing by 30% over two years (Campos et al. forthcoming). This approach encourages participants to plan ahead, learn from failure, and actively pursue new opportunities.
For medium-sized firms, more intensive management consulting programmes have shown promise (Iacovone et al. 2022). McKenzie describes work in Colombia:
“We worked on a cheaper group-based approach, where you had consultants work with groups of four to six firms at a time, and that was only a third of the cost – $10,000 a firm – and just as effective, if not more effective. We’ve now tracked those firms eight to ten years later, and those firms are earning $500,000 more a year.”
However, not all approaches deliver. Light-touch initiatives such as sending business tips by text message have not been as effective. Similarly, adding one-to-one mentoring to classroom training has not made a substantial difference.
Measuring success and persistence
Many early evaluations were small in scale, leading to uncertainty about the true effects of training.
By combining results across many studies, the VoxDevLit shows that training does have positive, if modest, effects.
“We see positive but relatively modest impacts on average of these standard classroom based programmes. If you put people in a classroom for 5–7 days, you tend to get maybe a 5% increase in sales, a 10% increase in profits.”
For entrepreneurs close to subsistence, such gains can still be meaningful.
The VoxDevLit also highlights the importance of persistence – whether benefits last after the training ends. Encouragingly, there is growing evidence of long-term effects.
“In Togo, with personal initiative training, we now have gone back and measured impacts seven and a half years after that programme, and we see at least the men that took part in that programme are having very substantial, sustained impacts.”
Similar results appear in Uganda, where youth who completed a start-up programme are still earning 16% higher profits nine years later (Chioda et al. 2025).
The limits of entrepreneurship training
While training can improve survival and incomes, it rarely leads to large-scale job creation among micro-enterprises.
Larger firms, however, do show employment effects when management consulting raises productivity and sales.
This underscores the need to align expectations with firm size and capacity. For the smallest businesses, success may simply mean greater stability, resilience, and confidence.
Women entrepreneurs face particular challenges. Training programmes can be valuable, but a major challenge lies in limited demand and market saturation, where many women end up engaging in similar activities and competing within a narrow market space. Without strategies to expand or diversify markets, training alone may not be enough to deliver transformative change.
Scaling, policy gaps and the role of technology
Scaling up remains one of the hardest problems. A programme that works well for 100 firms may not work the same for 100,000, McKenzie warns. There are also trade-offs between targeting high-growth firms and supporting disadvantaged groups.
“If you want to look at high-growth firms, but you’re also wanting to help women in rural areas who have no wealth, maybe those two goals are not going to coincide.”
Another emerging question is whether training should be bundled with complementary interventions such as finance, networking, or market access.
Technology offers opportunities but also challenges. Online and AI-based training can reach more people at lower cost, but evidence of impact is limited. McKenzie warns:
“We’ve seen very low take-up and a lot of dropout if you just put something up online.”
Hybrid models – part in-person, part virtual – appear more promising.
Early experiments with AI tools, including a WhatsApp interface linked to ChatGPT in Kenya, produced mixed results (Otis et al. 2024).
Broader impacts and looking ahead
Ultimately, entrepreneurship training can have spillover benefits beyond business outcomes. The ability to plan, budget, and take initiative may help individuals in employment or personal contexts, even if their businesses do not grow.
The VoxDevLit continues to evolve – this fourth edition adds around 20 new studies, with stronger evidence on long-term effects, youth programmes, and group-based learning. Yet, as McKenzie notes:
“There’s still a lot of open gaps about how you take something that’s working and make it work for many more.”
Entrepreneurship training is no panacea, but when well-targeted and grounded in evidence, it can enhance livelihoods, build resilience, and foster the skills that underpin sustainable economic growth. As McKenzie concludes:
“If we can make them earn more income and have their businesses survive, that’s going to be good for them and their families.”
References
Campos, F, M Frese, L Iacovone, H Johnson, D McKenzie, and M Mensmann (forthcoming), “Long-term and lasting impacts of personal initiative training on entrepreneurial success”, American Economic Review: Insights.
Chioda, L, D Contreras-Loya, P Gertler, and D Carney (2025), “Making entrepreneurs: Long run returns to training youth in hard versus soft business skills”, Unpublished manuscript.
Iacovone, L, W Maloney, and D McKenzie (2022), “Improving Management with Individual and Group-Based Consulting: Results from a Randomized Experiment in Colombia”, Review of Economic Studies, 89(1): 346–371.
McKenzie, D, C Woodruff, K Bjorvatn, M Bruhn, J Cai, J Gonzalez-Uribe, S Quinn, T Sonobe, and M Valdivia, “Training Entrepreneurs”, VoxDevLit, 1(4).
Otis, N, R Clarke, S Delecourt, D Holtz, and R Koning (2024), “The uneven impact of generative AI on entrepreneurial performance”, Unpublished manuscript.