My Mobile Consultant: Mobile Based Business Advice Service for MSMEs

Recent research shows that customized management consulting advice can significantly improve management practices and outcomes for firms, at least in the short run. Providing four hours a week of consulting services to a sample of SMEs in Mexico for one year led to a dramatic increase in monthly sales and profits, according to Bruhn et al. (2012). Extending professional consulting advice to large textile plants in India resulted in a 17 per cent increase in plant productivity (Bloom et al., 2011). Nonetheless, while these results show promise for the impact of consultancy services on entrepreneurial performance and business growth in developing countries, such interventions are far too costly for micro and small enterprises: Bruhn et al’s intervention cost over $10,000 per firm, and the program described by Bloom cost around $250,000 per firm.

The researchers will develop and pilot a highly scalable, mobile-based management consultancy platform to provide demand-driven, customized advisory services to Micro, Small and Medium Enterprises (MSMEs) in India. Administering management consulting advice using an innovative mobile-based platform could offer an affordable alternative to the classroom training programs that have thus far been the most widely used channel to improve managerial performance amongst MSMEs. The project is particularly policy-relevant for private enterprise development in Low-Income Countries (LICs), as its scalability gives it the potential to change the way assistance is provided to MSMEs in these countries.

As the first step towards the development and evaluation of this new product, the PEDL exploratory research grant will be used to achieve three main goals:

  • First, identify the type of advice and training needed by Indian MSMEs, their preferred content and delivery channel, as well as the price they would be willing to pay for these services. To this end, the researchers will conduct comprehensive, face-to-face interviews with approximately 500 firm owners in two Indian states, Tamil Nadu and Uttar Pradesh. The data to be collected will include basic enterprise characteristics, information on financial knowledge, managerial practices, as well as access to, and demand for business and management advice.
  • Second, in close relation with their technology and content development partners, the team will design and develop the most appropriate business advice service for Indian MSMEs. This will be followed by a series of pilots to test the functionality of the product, using a sample of around 1000 MSMEs. The researchers will closely track usage of the platform and its different features and collect feedback at every stage, as well as estimate how much the enterprise owners value each version of the product.
  • Finally, to prepare for the full-scale impact evaluation of the platform (to be done at a later stage), the team will also test several data collection tools, including voice-based phone surveys, automated phone surveys and phone-based book-keeping applications, to find out the most appropriate method to collect high-frequency data on business practices and outcomes. Indeed, previous studies were unable to draw convincing conclusions about the impact of business training on entrepreneurial performance because of data quality issues in the measurement of outcomes such as revenue, expenses, labour or profit. The response rates, cost and measurement error for each data collection method will be compared, yielding methodological insights useful for the broader research community.


Shawn Cole

Harvard University

Laura Litvine

The Behavioural Insights Team