Networking programs that connect women entrepreneurs with their peers help the women develop as leaders and increase their companies’ profits, based on new research presented at a We-Fi webinar, part of its Knowledge Series.
Though much remains to be explored about exactly how networks elevate women entrepreneurs, the research suggests networking programs are most effective when they take a disciplined approach, such as scheduled meetings between carefully matched entrepreneurs, and when organizers pay close attention to targeting and the balance of diversity and homogeneity within the networks.
The webinar presented findings of studies on networking interventions in Ghana and Tunisia. Both networking interventions had an impact. The network in Ghana was low-cost and “light touch.” Comprising a WhatsApp group, a moderator, and regularly scheduled coffee chats, the intervention generated $28 of profits for female entrepreneurs for every dollar spent, excluding recruiting costs.
“Many policymakers could replicate these (interventions),” said Diego Ubfal, Senior Economist in the World Bank’s Gender Group. “It’s possible to have cheap interventions that are effective and scalable.”
Policymakers, people working in finance and entrepreneurs themselves have long recognized how important networks are to entrepreneurship and innovation. But the papers presented at the webinar are among the first that examine networking interventions, seeking causal evidence on the way the interventions affect the performance of women-led businesses.
At the We-Fi webinar, Ashley Wong, Assistant Professor of Economics at Tilburg University: presented “Female Entrepreneurship and Professional Networks”, and Florian Anselm Münch, Postdoctoral Research Economist at London School of Economics, presented “Stronger Together: Promoting Exports through Female-only SME Consortia in Tunisia”.
Michelle Brock, Senior Research Economist at the European Bank for Reconstruction and Development, moderated the webinar.
The Ghanaian network, the topic of the first paper, recruited 1,700 entrepreneurs from different sectors and geographies into the program, which also provided a small grant to the entrepreneurs. The entrepreneurs were growth-oriented micro entrepreneurs; more than 30% had a college degree. The program took place during the pandemic, which meant the entrepreneurs were almost entirely working from home.
The entrepreneurs were sorted into two groups; each week a group member was assigned to meet virtually with another group member. In the second group, entrepreneurs also met with a legal expert who offered advice. The researchers found little difference in results between the two groups, suggesting that the effects – higher profits and better business practices – came from the networking, not the legal education.
One year later, female entrepreneurs who took part were 25-31% more likely to have introduced new changes to their businesses and improve their business practices. Firm profits increased significantly by 21%. One example: the entrepreneur who began selling her product, cereal, in a paper bag instead of a Ziploc. She was able to increase prices with the better packaging – an idea that came from the network, said Wong.
Through a variety of surveys, the researchers found the increases in profits and innovations came from two specific factors. First, the entrepreneurs’ networks shifted from friends and families to peers and business network members; and the entrepreneurs benefitted from being in networks with college-educated, successful entrepreneurs.
The project in Tunisia helped women develop export consortia that were voluntary legal structures. Between April 2022 and December 2023, 87 female-owned SMEs from four sectors (information and communication technologies, general services, agriculture, and handicrafts/cosmetics) were given technical support in the form of workshops to form the consortia. The technical support included information about legal structures and access to finance, as well as grants to set up web sites and attend international trade fairs.
Midline results showed no increase in exporting, though companies showed an increase in profits. But the program helped the women entrepreneurs form different networks. The women’s networks changed from being majority male to majority female. There was also change in how women perceived other entrepreneurs. “They started to perceive other CEOs more as partners rather than competitors,” Münch said.
And, intriguingly, follow-up surveys showed that the women developed entrepreneurial confidence and better management practices. For instance, fewer said they would consult a male authority figure before making decisions.
The need to increase economic growth, and innovation and participation by women, is prompting researchers to investigate exactly how women’s networking achieves the successes it does, so that financial service providers and policymakers can design the best programs possible.
Overall, the two recent papers point to the need for more women’s networking programs as well as research on them. In addition, the papers showed the need to design programs considering diversity and structure. Economist Ufbal pointed out that discipline is particularly important: Creating a successful network requires giving people both regular meeting times and incentives to speak to each other. And, a complete cost-benefit analysis is important, he said.
He listed some questions for further exploration:
- Are virtual meetings more cost-effective than in-person meetings?
- What is the optimal size for networking?
- Does the cooperation keep going?
- What is the right balance between homogeneity and diversity, across industries, success/education level, and geographies?
- Can combining networking with additional interventions (e.g., training, financing, access to markets) or addressing gender constraints (e.g., childcare, norms) enhance effects?
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