Drawing on Human Capital Theory (HCT), we examine the effectiveness of training and counseling offered by outside assistance programs (OAPs) in achieving operational outcomes for small and medium-sized enterprises (SMEs)—outcomes often overlooked in existing research. We further explore how SME characteristics, firm age and IT usage, moderate the efficacy of OAPs.
Our data includes 601 SMEs engaged in government-supported OAPs from Kazakhstan. Outcomes such as cost reduction, process innovation, and product certification were measured. We use Logistic regression to test our hypotheses.
We find that basic business training assists SMEs in reducing costs, functional business training facilitates process innovation, and counseling aids in obtaining product certification. While more experienced SMEs and heavy IT users reap the greatest benefits from these programs, less experienced SMEs mainly benefit from counseling services.
OAP designers should tailor their programs to address the specific operational needs of SMEs. Younger SMEs can be supported through group sessions, networks, or hubs, offering cost-effective counseling in a community setting. Additionally, the government can initiate programs to bridge the digital divide by providing free or subsidized basic IT training for SMEs with limited technology use.
This paper is the first to examine OAPs’ impact on operational outcomes and the intricate interplay between OAP types and SME characteristics. While HCT traditionally views education as a linear pathway to performance, our research highlights that task-specific interventions offered by OAPs play a crucial role in bridging knowledge gaps for SMEs.
