The paradox of training in the small business sector of the british economy

Abstract

From the late 1970s onwards policy-makers, academics and analysts in Britain and abroad have increasingly focused their attention upon the development of small- and medium-sized enterprises (SMEs). The potential growth of this sector of the economy has progressively come to be seen as the solution to Britain's ‘relative’ (and, in some notable cases, absolute) economic decline. By the 1980s, however, it appeared that compared to both its major and minor competitors, the British labour force was relatively poorly educated and trained. In order to overcome the retarding effects of the ‘British disease’, priority has to be given to raising the level of vocational education and training, both quantitatively and qualitatively. This article considers the contemporary developments in the field of vocational education and training as applied to the small business sector of the British economy. It begins with a historical overview of the still relatively unexplored issue of training in smaller enterprises and continues with an analysis of current pertinent issues such as the inception of Training and Enterprise Councils and Local Enterprise Councils, National Vocational Qualifications and Youth Credits. Skills needs and shortages specific to the small business sector are analysed from a number of different perspectives, including those of owner/managers, employees and policy-makers. The data obtained by the author from 2000 telephone interviews, 246 semi-structured, in-depth interviews and 74 case studies carried out in the West Midlands region are summarised in this paper. Preliminary results and a discussion of owner/managers’ attitudes to, and actual provision of, training are presented in the context of the traditional British ‘training culture’. The author concludes that although owner/manager attitudes to vocational education and training are largely positive, its actual provision fails significantly to keep pace with the perceived needs of small firms. It is argued that Britain lacks a coherent training policy and the resulting failure to fund and provide transferable skills training can only deepen the competitive disadvantage faced by small businesses, in both the domesti and international markets.