Ann Arbor Times

A recent study from the University of Michigan highlights a critical insight into the efficacy of entrepreneurship education in impoverished regions. The research, conducted by Charlene Zietsma, professor at the Ross School of Business and the School for Environment and Sustainability, alongside co-authors Angelique Slade Shantz (University of Alberta), Geoffrey Kistruck (York University), and Luciano Barin Cruz (HEC Montreal), explored how different framing tactics impact the adoption of new entrepreneurial practices.

The study involved 683 entrepreneurs in rural Sri Lanka who were randomly assigned to two groups. Both groups received identical training content on innovation practices such as product development, varied marketing tactics, and pricing strategies but with differing examples and framing methods.

Most existing programs employ a "within-logic contrasting" approach, which encourages microentrepreneurs to emulate successful business figures. This method asks them to build new skills by contrasting their current practices with those of notable entrepreneurs. However, the study found that a "cross-logic analogizing" approach—encouraging participants to apply familiar domestic skills to their businesses—was more effective.

An example provided in the study illustrates within-logic contrasting: “Otara began with factory surplus export clothing... she introduced new products (handbags, jewelry, homeware, and LUV SL souvenirs) and produced her own branded clothing.” In contrast, cross-logic analogizing uses relatable scenarios: “Sri Lanka is facing a dengue epidemic... Nipuni and Kasun... find burning coconut husks ineffective but adding Maduruthala leaves works well.”

“This approach reduces the fear of trying new things by showing that experimentation is already a regular part of their daily lives,” Zietsma noted.

The research revealed that cross-logic analogizing not only made new business practices seem more attractive but also demonstrated that within-logic contrasting could have a negative effect on perceived attractiveness. Participants felt intimidated rather than motivated by success stories of role model entrepreneurs due to focusing on grand outcomes instead of incremental steps.

These findings extend beyond Sri Lankan microentrepreneurs. The researchers suggest that North American business schools should reconsider using icons like Bill Gates and Jeff Bezos as models for emulation. Such comparisons may demotivate aspiring entrepreneurs due to the significant gap between their current state and these success stories.

“This is particularly important for under-represented groups, such as women and racial or ethnic minorities, who face additional biases and lack relatable role models,” added Zietsma.

Following this research's insights, Développement International Desjardins trained over 7,000 microentrepreneurs in Sri Lanka using the newly developed materials from this field experiment. These insights are now being adapted for training programs globally.