Finance & PSD Impact DECEMBER 2022 The Lessons from DECFP Impact Evaluations ISSUE 62 Helping Western Balkan SMEs Expand Exports Through Online Training and Consulting Ana Cusolito, Ornella Darova and David McKenzie One of the key challenges facing • A treatment group of 113 firms was offered innovative small and medium enterprises is 30 hours of group-based training sessions customer acquisition. This is especially a over Zoom, and 5 one-on-one virtual constraint in less populated countries like meetings with Deloitte consultants. Training those in the Western Balkans, where sessions focused heavily on building domestic demand can be limited for customers and markets and using digital specialized services and products. Exporting marketing tools (such as search engine to larger and richer countries provides a optimization), with additional sessions also potential solution, but expanding into foreign covering human resources, financial markets involves considerable search management, and pitching. The average frictions, and small firms may lack the skills (marginal) cost was $3,350 ($2,140) per firm. and confidence to market to foreign buyers. • A control group of 112 firms was offered We test the effectiveness of a capacity three webinars, lasting a total of 4 hours, building program that aimed to help firms which provided light coverage of these bounce back from the COVID-19 pandemic, topics. and help them expand their markets and export more. Take-up was initially high for an online program, with 97 percent of the treatment The PowerUP program group attending some sessions. However, The PowerUP program was launched in attendance fell over time, with the median September 2020 in six countries in the firm attending 6 out of the 9 days of training. Western Balkans: Albania, Bosnia and Given the structure of the course, this meant Herzegovina, Kosovo, Montenegro, North most firms received training on customers Macedonia, and Serbia. Firms had to be small and markets, and on using digital tools to or medium, innovative, and already be reach customers, but fewer were trained in generating revenue. The mean (median) size other areas. of firms was 17.6 (8) workers. The majority were in services and B2B (e.g. producing Results customized software solutions; professional We use three sources of data to measure services such as legal and energy consulting). impacts of the program: 1) Scores from One quarter produces specialized judges of pitch decks and traction sheets manufacturing products. 71% were exporting submitted by firms 7 months after the start of already, with their main challenge being how the program. These are only available for to gain new customers and expand exports. 60% of the firms. 2) 1-year follow-up survey data on 86% of the firms; and 3) Data on the Interventions and Experimental Design digital presence of all 225 firms obtained 225 firms were selected for the program and through an independent scoring of the randomly allocated into two groups: Google search results, websites, and Do you have a project you want evaluated? DECRG-FP researchers are always looking for opportunities to work with colleagues in the Bank and IFC. If you would like to ask our experts for advice or to collaborate on an evaluation, contact us care of the Impact editor, David McKenzie (dmckenzie@worldbank.org) Facebook pages of firms 1 year after the innovative SMEs to better reach and sell to program started. Using these data we find: foreign buyers. They also provide some of the first evidence on offering training • Treated firms improved their digital virtually to firms in multiple countries at presence in a way that made it easier for once, which offers promise for the scalability potential international customers to find of such efforts. However, our analysis and them and be attracted to their offerings: qualitative work also suggests several areas they were 10 percentage points more to improve such programs going forward: likely to show up in the first page of Google search results, 15 percentage 1. Improve the targeting and selection of points more likely to include Facebook firms: the heterogeneity of firms across posts in English, and more likely to use sector, size, and lifecycle made it difficult special offers and customer testimonials. to provide content that met the needs of • There was no improvement in other business practices such as HR, finance all firms – but in small countries there are and accounting, or pitching. This likely often very few firms in any industry-size reflects some of the advice being less category, and more work is needed on directly actionable in these areas, as well how to trade-off specificity versus as some firms not attending the sessions serving many firms. covering this material. 2. A narrower and more actionable content • A year after the program started, treated may be better than trying to cover all firms had significantly increased the number of customers and overall sales areas. The specific content that firms increased by a statistically insignificant could directly implement such as using 10 percent. search engine optimization had the most • The program did not cause firms that uptake. were not exporting to start doing so, but 3. A mixed modality program may be did generate a significant increase in preferable to all online or all in-person. exports among exporting firms. Health conditions during the pandemic Conditional on exporting, treatment causes firms to export nearly double as meant all of the program was held online, much as the control firms on average. and online content enabled firms spread Qualitative interviews suggest this comes throughout 6 countries to attend at the from specific advice on targeting and same time. This offers clear advantages in identifying customers in specific markets, accessibility and cost. However, some in- as well as encouraging firms that were person component could help boost unsure about expanding that they were on attendance by overcoming Zoom fatigue, the right track. and allow firms to network with one Policy Implications another and have more interactive The results show that capacity building can discussions with trainers. help provide the skills and confidence for For further reading see: Cusolito, Ana Paula, Ornella Darova and David McKenzie. “Capacity building as a route to export market expansion: A six-country experiment in the Western Balkans”, World Bank Policy Research Working Paper no. 10256 Recent impact notes are available on our website: https://www.worldbank.org/en/research/brief/finance- and-private-sector-impact-evaluation-policy-notes