Uganda - Network Effects in SME Clusters

SUMMARY INFORMATION

  • PROJECT TITLE: Network Effects in SME Clusters
  • TARGET SEGMENT: Small scale industries
  • DELIVERY CHANNEL: Practice-based vocational training and classroom-based business training
  • EVALUATION TEAM: Markus Goldstein (World Bank), Francisco Campos (World Bank), Obert Pimhizai (World Bank), Antoinette Schoar (MIT), Mattea Stein (Paris School of Economics), Bilal Zia (World Bank)
  • PARTNERS: Katwe Small Scale Industries Association in Kampala, Government of Uganda
  • TIMELINE: July 2011 – December 2012

PROJECT SNAPSHOT

Identifying the determinants of entrepreneurship is an important research and policy goal, especially in emerging market economies where lack of capital and supporting infrastructure often imposes stringent constraints on business growth.

Studying how business networks operate is elemental for smart policymaking as any identified positive externalities could justify scaling down spending on business and financial training programs while still being able to reap many if not all the benefits. These potential positive spillovers would constitute efficient ways to scale the impact of trainings and provide a natural source of leverage for these programs. Furthermore, the resources saved in doing so could be spent on expanding training in other areas or on other development projects.

The impact evaluation uses a randomized control trial (RCT) to assess whether vocational and business training for small scale entrepreneurs can impact business knowledge and outcomes. This is a competitive market of small-scale producers (metal fabricators, shoe makers, caterers, and the like) operating in industrial clusters in the outskirts of Kampala, Uganda. The research maps out business networks and seeks to identify to what extent such enhanced knowledge is shared among network members.

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