A Call to Action: Growth Mindset Training Improves Experimental Action Among Necessity Entrepreneurs

Abstract

The poor have few other options than to engage in entrepreneurial activities to sustain their livelihood. To help these necessity entrepreneurs improve their ability to experiment with more effective business activities, technical training programs abound. Yet, these necessity entrepreneurs tend to possess a ‘scarcity mindset’ that stops them from applying the technical skills they develop in training programs. To combat this scarcity mindset, we suggest that technical training programs should include growth mindset training to help individuals increase their entrepreneurial self-efficacy, which will help them to take more experimental action. More specifically, we created a half-day ‘cognitive’ training module to complement an existing ‘technical’ training program. The growth-mindset training was developed and piloted with 339 entrepreneurs in rural Tanzania. Subsequently, we tested our hypotheses using a randomized controlled trial involving 176 entrepreneurs in rural Tanzania. Our results suggest that augmenting a technical-skills training program with a growth mindset component promotes entrepreneurs to improve their entrepreneurial self-efficacy and display subsequent experimental action in their actual business endeavors.