Skills Training for Entrepreneurs in Developing Countries

For most of the developing world, microenterprises are a key source of income and employment creation. For many countries the informal sector, where most of the small enterprises exist, represents over 80% of employment (ILO 2012). These businesses often have a difficult time growing. There are a number of reasons that have been put forward by policy makers and researchers for this lack of growth, including missing the necessary skills to manage a growing business.International NGOs and governments are interested in training programs. The ILO and World Bank have invested heavily in trainings, calling greater access to skills training a game changer. However, the results of recent impact evaluations suggest there is reason to be skeptical of training programs. There is a growing evidence that these programs do not contribute to enterprise growth. Researchers now argue that such trainings, when delivered alone, are not effective. The debate over the right way to approach unemployment and business creation is just starting.