OECD Skills Studies

ISSN :
2307-8731 (online)
ISSN :
2307-8723 (print)
DOI :
10.1787/23078731
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There is a shift from formal education to a broader perspective that includes a range of hard and soft skills people need to acquire over their lifetime in order to succeed in the labour market. Workers, students, parents, employers, education providers and government agencies now need reliable information on how supply and demand for skills evolve.

The OECD Skills Studies series aims to provide a strategic approach to skills policies. It presents OECD internationally comparable indicators and policy analysis covering issues such as: quality of education and curricula; transitions from school to work; vocational education and training (VET); employment and unemployment; innovative workplace learning; entrepreneurship; brain drain and migrants; and skills matching with job requirements.

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Skills Development and Training in SMEs

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Author(s):
OECD
Publication Date :
21 June 2013
Pages :
164
ISBN :
9789264169425 (PDF) ; 9789264175297 (print)
DOI :
10.1787/9789264169425-en

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The report discusses the results of the OECD "Leveraging Training and Skills Development in SMEs" (TSME) project which examines access to training by SMEs across seven regions in six OECD countries: New Zealand, Poland, Belgium, UK, Turkey and Canada. The book analyses the policy issues related to both low access by SMEs, and how to recognise the increasing importance of informal training and skills development methods. The book looks at how both formal and alternative ways of training and skills development interact and identifies impacts at three levels; for the firm and employees; for the industry; and for the local area where the firm is located.

The report pays special attention to the development of entrepreneurial skills and the emerging area of "green skills". This focus is not just because ‘green skills’ represent the next new training opportunity – the de-carbonisation of economies that will occur over the coming decades represents an industrial transformation on the scale of the microelectronics revolution - but in many ways the response to the green economy is at an emerging stage- this means we have the opportunity to implement lessons from previous successful practices into a skill development area that will have enormous reach.

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    Preface

    The main assets for any firm, especially small and medium sized enterprises (SMEs) are their human capital. This is even more important in the knowledge-based economy, where intangible factors and services are of growing importance. The rapid obsolescence of knowledge is a key feature of the knowledge economy.

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    Acronyms
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    Executive summary

    The Leveraging Training and Skills Development in SMEs (TSME) project examines access to training by SMEs across seven regions in six OECD countries and the policy issues related to low access rates of SMEs to training and skills development. A further related issue is how to recognise the increasing importance of informal training and/or alternative skills development methods, such as knowledge intensive service activities (KISA). The project used surveys and case studies to look at how both formal and alternative ways of training and skills development interact. It identifies impacts at three levels: for the firm and employees; for the industry; and for the local area in which the firm is located. The project contributed to the OECD Skills Strategy.

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    Overview of training and skills development in SMEs

    This report presents the findings from the Leveraging Training and Skills Development in SMEs Project (TSME). The report is the result of a three-year research programme and includes analysis of empirical evidence collected from official statistical sources, surveys and interviews with various businesses, case studies, and workshops.This document and any map included herein are without prejudice to the status of or sovereignty over any territory, to the delimitation of international frontiers and boundaries and to the name of any territory, city or area.

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  • Expand / Collapse Hide / Show all Abstracts Cross-country analysis of skills development approaches in SMEs

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      Formal training and skills development: The state of play

      This chapter analyses formal training activities within small and medium sized enterprises (SMEs). It is anticipated that across Europe, most new jobs will be within knowledge and other skills intensive jobs. Results of the Continuing Vocational Training Surveys over the last few years are analysed, to determine levels of participation by small, medium and large firms in training and skills development activities, and the potential effects these training programmes will have on the future competitiveness of the SMEs. Areas investigated include: initial Vocational Education and Training (VET), specifically apprenticeships; and continuing VET (primarily that financed by the workplace).From these results, policy implications are suggested, which are designed to enable SMEs to utilise the findings to develop or improve their current training regimes, and to draw the attention of government agencies to how best to positively influence these companies.

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      Skills development on the ground: Formal and alternative approaches by firms

      This chapter investigates forms of knowledge sourcing for skills development other than formal approaches, including knowledge intensive service activities (KISA). A web-based survey questionnaire was supplied to firms in the participating countries. Analysis of the data obtained includes: skill levels of the employees (low, medium, high); age bracket; country; preferred training methodology (vocational education and training versus KISA); types of skills; outcomes from training by employee, company and local region effects; effects of the financial crisis on training activities; and motivations for skills development. Finally, policy implications resulting from this analysis are outlined, including noting that the types of skills development appear to be linked to the existing skill levels of employees, which is of importance because of its potential impact upon low-skilled workers’ future employability.

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      Innovators, exporters and new skills development

      This chapter analyses participation in training and skills development activities on the basis of other characteristics within the firm such as innovative activity, sector and export orientation. In this chapter we use these characteristics as a proxy for growth potential firms. There is extensive literature on the relationships between innovative activity in firms, and revenue and employment growth over the longer term. Exporting firms are also more likely to develop new markets and therefore present similar growth prospects. This allows some conclusions about the association of training activities and the characteristics of these firms to be drawn. The chapter also examines the performance of organisations in skills development within emerging skills areas such as entrepreneurship and green skills.

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      Learning by doing – best practices in training and skills development

      This chapter examines the results of case study interviews conducted with sample small and medium sized enterprises (SMEs) within each country, to better understand what training and skill development activities are undertaken by SMEs, and the impacts of these on the business. The global financial crisis, and climate change, are investigated in terms of their impact upon SMEs’ training arenas, particularly marketing, recruitment and job design. Motivators and challenges to training provision and skill development are investigated in depth, including the benefits of having training plans, or the expenses associated with training, not only in paying tuition fees or hiring external trainers, but in lost employee work time. Formal versus informal education and training are investigated, with the importance of in-house training as well as cross-organisational collaborations and exchanges being emphasised. Policy implications resulting from this analysis are explored in detail, including: impacts of the global financial crisis on SMEs in terms of training; the importance of structured training systems and formal training programmes; use of alternative training methods by SMEs; climate change impacts on SMEs, including the dichotomy of benefits accruing to some companies but financial burdens being suffered by others; and informal training systems and the need to involve SMEs in policy development.

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      Skills and training ecosystems

      The focus of this chapter is the results of workshops and study visits to the case study areas, intended to determine the skills needs, issues around developing training and competencies, the role of networks in skills development, and the outcomes of skills and training development activities. Combined with the survey results, a skill ecosystem (clusters or networks between firms and skill development institutions) is mapped for each of the case study regions, illustrating the levels of interaction between small and medium sized enterprises (SMEs) and the organisations in their area considered by them to be important for their skills and training development.A synthesis analysis was then undertaken, comparing and contrasting the similarities and differences across the different regions. Of particular note was the finding that skills and training development policies need to be individually focused for their local area. Policy implications, based on the results of the research data, note that a key challenge for policy makers is how to combine a diverse range of policy instruments across a wide range of portfolios in order to manage an assorted bundle of ecosystems. The importance of regional networks and locally appropriate policies are emphasised.

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  • Expand / Collapse Hide / Show all Abstracts Key highlights from case studies

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      Training in SMEs in the Canterbury region, New Zealand

      The focus of this chapter is the case study undertaken in the Canterbury region of New Zealand. Initially looking at the political policy directions put in place by the government to improve the country’s economic growth, analysis is then undertaken of the current training participation rates within small and medium sized enterprises (SMEs) in the region and current issues that may be holding SMEs back from either undertaking or further developing their training programmes. The chapter concludes with a discussion of the potential implications for future policy developments resulting from the research findings.

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      Training in SMEs in the West Midlands region, the United Kingdom

      This chapter provides a detailed look at the research undertaken in the West Midlands region of England. Following an introduction that includes a summary outline of current training-related policy direction in the United Kingdom, there is a discussion of the results obtained from the TSME survey, with a particular focus on barriers to training, and areas in which companies feel they need to most focus their training efforts. Investigation of small and medium sized enterprises’ (SMEs) participation in knowledge intensive service activities (KISA) and other informal training activities is next, as well as a study of the primary sources of informal training for SMEs. Finally, implications for policy development are outlined, including: the importance of contextualising training; encouraging companies to seek growth via training; utilise alternative frameworks to build and strengthen capacity and capabilities; and the SMEs’ discussion of their need for government-based funding to support training activities.

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      Training in SMEs in the East Flanders region, Belgium

      This chapter begins by providing a snapshot of the current position and place of small and medium sized enterprises (SMEs) within Belgium’s workforce. Investigation of the difficulties surrounding encouragement and pursuit of training activities follows, which highlights areas such as cost, lack of specialist training suppliers, and absence of formal training plans and associated budgets. Recognition of the importance of knowledge intensive service activities is noted, but the difficulties inherent in measuring these activities are also acknowledged. The chapter concludes with recommendations regarding policy implications for policy developers, including the need to: recognise the high percentage of SMEs in Belgium; affirm the strategic importance of improving employee’s skills; contribute, even in small ways, to a green economy; and to undertake more networking between companies and training institutions.

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      Training in SMEs in the Zaglebie sub-region, Poland

      This chapter begins with the provision of a background portrait of the Zaglebie sub-region of Poland, outlining why this area was chosen for study. Difficulties encountered by small and medium sized enterprises (SMEs) when attempting to provide or undertake training are then discussed, including the high costs associated with training, a lack of comprehension regarding the benefits of undertaking training, and an inability to properly assess workers’ training needs. The informal learning sector was then investigated, with results showing very low levels of recognition of the importance of and benefits to be realised by communication and interaction with external institutions. Internal training via informal channels is then noted as being a recurring practice among the more successful medium-sized companies, highlighting the usefulness of encouraging regular internal communication and a flexible organisational structure. The chapter concludes with a look at policy development implications arising from the research, particularly noting the importance of government focus on encouraging inter-communication and informal training networks within and among SMEs.

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      Training in SMEs in the industrial zone of OSTIM, Ankara, Turkey

      This chapter begins with an explanation of the set up and purpose of organised industrial zones in Turkey, and details the background of the Middle East Industry and Trade Centre (OSTIM) industrial zone and the functioning of its associated consultancy and training company of ODEM. Training and development of skills within the zone are then investigated, and an overall lack of focus on training and low recognition of the benefits accruing from improving employees’ skills are discussed. Interactions between companies are also minimal, making it difficult to assess the levels of knowledge intensive service activities (KISA), although details of the positive results obtained by some small and medium sized enterprises (SMEs) are outlined. Implications for policy development are then detailed, focusing on two key areas: investing in training and skills development in SMEs; and improving the skill ecosystem.

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      Training in SMEs in the Montréal and Winnipeg urban regions, Canada

      This chapter looks at a study carried out among 80 small and medium sized enterprises (SMEs) in two Canadian cities, Montréal and Winnipeg, based on a survey and case studies, which show the importance of innovation among Canadian SMEs. These innovations in turn create new demands for skill development, both through formal training and in informal activities. The outcomes of the study show two significant trends. First, an uneven development of learning activities among SMEs is related not only to the size of firms, but also to their orientation towards innovation and shared productivity measures. Second, because they do not have enough internal resources and flexibility to drive productivity growth through learning and training by themselves, SMEs need some form of group based mechanisms to solve this structural problem. However, it is noted that participation of unskilled employees in both formal and informal learning remains an important challenge for the great majority of SMEs.

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      Contributors' biographies
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      Survey participant characteristics
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