Comparative institutional disadvantage: Small firms and vocational training in the British manufacturing sector in comparative perspective

Niccolo Durazzi,Chiara Benassi,Johann Fortwengel

doi:10.1111/bjir.12643

Abstract

AbstractThis article asks why British manufacturing small and medium‐sized enterprises (SMEs) struggle to meet their intermediate technical skills needs. While the comparative political economy literature typically attributes the failure to train in Britain to collective action problems, we complement this perspective by pointing at the ill‐conceived policy design of the quasi‐market for vocational education and training. In particular, we shed light on the role of training providers, as they respond to the incentive structure of the quasi‐market, especially the output‐based nature of standards and the system of funding distribution. To strengthen our argument, we compare the British case with the Italian statist system, which enables SMEs to access technical skills through school‐based vocational education, and with the German collective system, in which SMEs develop skills through apprenticeships.

Highlights

It is well established that small and medium-sized enterprises (SMEs) face greater difficulties than large employers in meeting their skills needs: they struggle to attract talent from external labour markets and they have fewer resources to develop skills internally through training (Edwards & Ram, 2006; OECD, 2019)
The comparative political economy (CPE) literature on vocational education and training (VET), suggests that SMEs can receive institutional support to enable their participation in the VET system
Most of the CPE literature that focuses on the relationship between firm size and VET policy typically looks at the effect of inter-employer cleavages on institutional change in skill formation systems of coordinated market economies (CMEs) (Busemeyer & Trampusch, 2012; Culpepper, 2007; Emmenegger & Seitzl, 2019; Graf, 2017; Trampusch, 2010)

Summary

INTRODUCTION

It is well established that small and medium-sized enterprises (SMEs) face greater difficulties than large employers in meeting their skills needs: they struggle to attract talent from external labour markets and they have fewer resources to develop skills internally through training (Edwards & Ram, 2006; OECD, 2019). For manufacturing firms, this materializes in problems to meet intermediate technical skills needs, which are typically developed through a rather long vocational curriculum combining on-the-job/practical training and school education (Jones & Grimshaw, 2012: 6). The article is organized as follows: the section sets out why the British case offers an interesting research puzzle; Section 3 discusses the relevant literature and introduces our argument; Section 4 outlines the research design and methodological approach; Sections 5 and 6 provide the findings from the case studies; the final section discusses the empirical findings and broader theoretical implications

COMMON WISDOM ON BRITISH VET AND THE DISADVANTAGE OF SMES

THEORIZING THE INSTITUTIONAL COMPARATIVE DISADVANTAGE OF SMES IN VET

RESEARCH DESIGN AND DATA COLLECTION

Funding distribution

THE BRITISH CASE

The problem of ‘accessing’ intermediate technical skills

The quasi-market for apprenticeship training

SMEs’ challenges in ‘developing’ intermediate technical skills

Italy: SMEs’ access to skills in a school-based system

Germany

Findings

DISCUSSION AND CONCLUSION