The Gender Divide in Togo’s Entrepreneurial Success: A Long-Term Perspective

A long-term study of personal initiative training in Togo showed significant and lasting benefits for male entrepreneurs, with profits continuing to grow, while the impact for women diminished over time, highlighting gender-specific challenges. The findings suggest the need for tailored interventions to support women's long-term business success.

A recent study by the World Bank, in collaboration with the Asia School of Business, Leuphana University, and the University of Cologne, revisited the long-term impacts of a personal initiative training experiment conducted with small business entrepreneurs in Togo. The original study, carried out between 2013 and 2014, was designed to develop a proactive entrepreneurial mindset through psychological training, encouraging innovation and persistence in business management. The study aimed to assess whether such training could lead to long-lasting entrepreneurial success, particularly in developing countries where billions are invested in business training programs. The initial results were promising, showing substantial short-term gains with a 30% improvement in profits over two years, significantly outperforming traditional business training programs. Now, seven years later, the follow-up reveals long-lasting and divergent impacts between male and female participants, raising important questions about how training programs can be tailored to different demographics.

Long-Term Benefits of Personal Initiative Training

The personal initiative training program, which focused on fostering self-starting, future-oriented behaviors, has proven effective in the long term, particularly for male entrepreneurs. On average, businesses that underwent the training showed monthly profit increases of 91 dollars, a 52% rise compared to the control group. These results suggest that the psychological tools taught in the program such as proactive problem-solving, innovation, and financial bootstrapping created lasting behavioral changes that translated into higher profits. The training also encouraged participants to overcome financial constraints without resorting to external loans, by creatively addressing challenges with available resources. In contrast, the traditional business training program, which focused more on technical aspects like accounting and marketing, did not produce significant long-term gains. Over the seven years, the personal initiative training led to a cumulative profit gain of more than 6,900 dollars per entrepreneur, representing a 900% return on the 750-dollar training cost.

Diverging Outcomes for Men and Women

However, the long-term benefits of the personal initiative training differ significantly between men and women. In the short term, both male and female entrepreneurs experienced similar gains in business performance, with profits increasing by approximately 65 dollars for men and 61 dollars for women over the first two years. But as time passed, the gender gap widened. Male entrepreneurs continued to benefit from the training, with their monthly profits growing to 148 dollars, a 77% increase over the control group. These men also accumulated significantly more business capital and reported higher entrepreneurial self-efficacy, indicating that the training had reinforced a self-sustaining psychological cycle. Men were able to build up machinery, equipment, and other assets, further expanding their businesses over time. Additionally, men had greater access to credit, further boosting their capital accumulation and allowing them to maintain and grow their businesses more effectively.

The Gender Gap in Long-Term Impact

In contrast, the long-term impacts for women have been far less substantial. Seven years after the training, female entrepreneurs’ profits had largely converged back to control group levels, with only a modest and statistically insignificant increase of 39 dollars in monthly profits. Women accumulated much less capital over the years, and their entrepreneurial self-efficacy did not grow as significantly as men’s, limiting their ability to expand their businesses. The data suggests that the personal initiative training’s effects on women dissipated over time, particularly for those working in sectors with lower growth potential, such as commerce. In Togo, where many women are engaged in trade and retail, there are fewer opportunities for scaling up through capital accumulation compared to sectors like manufacturing or construction, where many men operate. The lack of significant capital accumulation among women, along with the absence of growth in self-efficacy, suggests that women face different barriers to long-term business success.

Exploring the Reasons Behind the Gender Disparity

Several hypotheses have been proposed to explain why women did not experience the same lasting benefits as men. One possibility is that the sectors women work in such as retail, hairdressing, and food sales may inherently have lower growth potential, limiting the impact of capital investment. Another potential explanation is that women may be redirecting their efforts and capital toward other household priorities, such as their children’s education or household expenses, rather than reinvesting in their businesses. However, the lack of data on household dynamics limits the ability to fully explore this hypothesis. Some evidence suggests that women with greater decision-making power over their business revenues experience better outcomes, indicating that gender dynamics within households could be influencing business performance. Married women, for instance, may face additional constraints in reinvesting profits due to household obligations or social pressures to prioritize family over business.

Addressing Gender-Specific Barriers to Business Growth

The gender disparity in long-term business outcomes highlights the need for additional interventions tailored specifically to female entrepreneurs. While personal initiative training has proven highly effective for men, with gains continuing to grow over time, women may benefit from complementary programs that address their unique challenges. These could include access to finance, industry-specific support, or programs that help women break into higher-growth sectors. Despite the reduced long-term impacts for women, the personal initiative training still provided a better return on investment than traditional business training, even for female entrepreneurs. The study’s findings underscore the potential of psychology-based training programs to foster long-lasting entrepreneurial success but also reveal the need for a more nuanced approach to address gender-specific barriers in business growth.