Every year, governments and development organizations spend billions on business upgrading programs — training, mentorship, consulting — designed to help small firms grow. These programs work, on average. For men. For women entrepreneurs, the average return is statistically indistinguishable from zero. The standard policy response has been to spend more: add gender-specific content, design women-only programs, set enrollment quotas.
A new World Bank working paper offers an alternative perspective, one that centers around the cost-effectiveness. Business upgrading programs are not necessarily broken for women. The selection and targeting process could be tailored to improve their efficacy.
The Gap — And What Causes It
Using pooled experimental data from 2,595 entrepreneurs across Uganda, South Africa, and Mexico, the paper documents a stark divide. Without any targeting, male entrepreneurs who receive business upgrading support show large, statistically significant gains in firm performance. Women show gains indistinguishable from zero. For the average male participant, a typical program translated into measurable profit growth within months. For the average female participant, it produced no detectable change at all — a poor return on an investment that costs programs around US$758 per person.
The paper’s contribution is to show why this happens — and to demonstrate it can be fixed through an alternative less-expensive approach. The paper builds a Program Readiness Scorecard (PRS): a 100-point composite of ten observable behaviors and practices — the “10 Es” — grounded in the idea that returns to business upgrading are dampened when entrepreneurs face tight credit constraints or low baseline capabilities. The PRS covers three dimensions: credit constraints (Endowments, Establishment); baseline business skills (Education, Experience, Effectiveness, Exposure); and growth attitudes (Experimentation, External orientation, Evaluation). Crucially, it does not use current profits or firm size, avoiding the trap of screening already-successful firms.
When the PRS is applied as a gender-neutral screen — removing the lowest-scoring entrepreneurs regardless of gender — women’s returns become statistically significant. That is promising. But men’s returns remain roughly twice as large. The gap narrows; it does not close.
