Effects of mentoring on SMEs in Norway, a randomized control trial

Mentoring:
The first treatment group will receive a mentoring service. Note that the set up for the mentoring service will rely on the mentoring programme that is presently offered by Innovation Norway as a separate programme not linked to their financial support programmes.
When a client is randomized to this treatment group, the officer will have a discussion with the client about potential issues they would like to discuss with the mentor. Does the client face some specific challenges? In what areas would the client like to expand on their knowledge?
After the discussion with the officer, an assessment of the client and its needs is sent to a firm responsible for connecting clients and mentors. This firm will further interview the client to get a deeper understanding of the clients' needs. Exploiting its large network of potential mentors and based on the results of the interview(s) it will pick 1-3 potential mentors that have the required knowledge. If introduced to more than one potential mentor, the client can choose the one they think has the best fit. Both the client and mentor must agree to enter into a contract on mentoring.
The mentoring service is almost exclusively related to management consulting. In an evaluation of the mentoring program, Menon (2018) found that the majority of the mentored clients from 2014-2017 received knowledge about strategy and business development, cooperation with other firms, communication, product development and enhanced their knowledge about time and tasks management.
The mentoring service allows for 30 hours of mentoring in total. There is no set framework for how often the mentor and client can meet, but the period of mentoring must be a minimum of 2 months and cannot exceed 18 months.
Innovation Norway covers the cost related to connecting clients and mentors (estimated to 12 000 NOK) and the cost to the mentor (estimated to 31 500 NOK).
The mentor is usually an experienced business owner and/or CEO from the same industry. Most mentors are only used once by Innovation Norway.
It is possible for a firm to decline the offer of mentoring. However, based on the experience of the officers at Innovation Norway, it does not seem likely that a significant share of the firms will decline this offer. If they decline to receive the mentoring, they will still be considered part of the treatment group.

Cash transfer
In the second treatment arm, the participants will receive the monetary equivalent to the mentoring service. This transfer amounts to 31 500 NOK.
We do not believe many businesses will decline the offer of additional funding either.

2019-03-15

2020-03-15

Firm performance

To address the impact of the interventions on firm performance we shall analyse a range of outcomes. We are moreover planning to assess firms’ performance twice after the intervention in order to study both short term results and long-term results. The first assessment will be one year after the last participant has entered the trial. While we will consider many of the same outcomes at both evaluations, we may expect the intervention to have different impacts in the short term than in the long term.

Amongst the outcomes to be considered:
• The time before the company yields a dividend for the entrepreneur
• The time before the product(s) is(are) commercialized
• New investors (increase in equity)
• Revenue growth
• Growth in the number of employees
• Survival
• Productivity
• Patents
• Exports (destinations and customers)
• Import of intermediates and capital goods (source countries and suppliers)
• Networks
• External effects through e.g. the labor market and investors/owners

The RCT is a parallel design with three arms. Two arms are designated treatment groups, and the third is a control group. The population consists of approved applicants to a set of different financial support programs. Among those who receive approval on the application for the financial support, we draw one-third to receive additional mentoring, one-third to receive a cash transfer equivalent to the expenses associated with the mentoring and one-third as a control.
By including the second treatment group, we remove the capital part of the mentoring service from the effect measure. This makes it possible not only to study the effect of additional support but to isolate the value of the service provided.
We follow the strategy of intention to treat. This implies that all recipients have the option of declining both financial support and additional treatment. Those who decline will still be part of the study.

Not available

Online randomizer: https://studyrandomizer.com/

Firm

No

No clusters

300 firms

100 firms per treatment arm