I b - marchese leveraging training and skills development in sm-es

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The upgrading of workforce skills is key to the competitiveness of SMEs. In today’s business environment there is a premium on innovation that enables firms to develop new products and services, new production processes and new business models. This requires both in-house innovation and the ability to absorb knowledge from other firms and organisations, both of which call for a skilled labour force. Skills are also a critical but understated resource for entrepreneurship seen in the sense of business creation. Similarly to workforce skills, entrepreneurship skills will boost the competitiveness of local businesses thanks to the improved strategic and management competences of the entrepreneur.

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I b - marchese leveraging training and skills development in sm-es

  1. 1. LEVERAGING TRAINING AND SKILLS DEVELOPMENT IN SMES – AN OECD PROJECTMarco Marchese, Economist (On behalf of Dr. Cristina Martinez)OECD Centre for Entrepreneurship, SMEs and Local DevelopmentLocal Economic and Employment Development Divisionmarco.marchese@oecd.org ; cristina.martinez@oecd.org
  2. 2. The starting point of the TSME project (I)• 50% of small firms participated in formal CVET, compared with 90% of large firms• Thus formal training policies risk having limited impact on SMEs.
  3. 3. The starting point of the TSME project (II)• Recruitment is the main source of skills for all companies, including SMEs.• In knowledge-based economy, though, skills upgrading is important & lack of training becomes a disadvantage for SMEs
  4. 4. Objectives of the project• Characterise the types of skills development activities, formal and informal, in which SMEs participate• Map the range of actors in the local training and skills development eco-systems• Understand the outcomes (skills, employment, firm) of training and skills development activities
  5. 5. Methodology• Quantitative data through an online firm survey (1080 firms answered)• Qualitative data through firm interviews and workshop with stakeholders in local training ecosystems.
  6. 6. Geographical coverage• East Flanders, Belgium• Zaglebie, Poland• West Midlands, UK• Ankara, Turkey• Quebec, Canada• Manitoba, Canada• Canterbury, New Zealand
  7. 7. Formal training vs. Knowledge Intensive Service Activities (KISA)• Continued vocational training: formal training that employer companies set up or pay for the employees who have a working contract (leading to certification) – Vocational training courses – Workshops, lectures and seminars, job rotations and secondments, etc.• KISA: Learning resulting from daily activities related to work which are not organised or structured in terms of objectives, time or learning support. – e.g. interactions with co- workers, suppliers, clients, consultants; internal work projects to improve firm processes (e.g. quality assurance)
  8. 8. Summary of results (I)• SMEs use both formal and informal training but that KISA are perceived as a better source of skills and competences.• High- and low-skilled employees have equal access to (different) training – Low-skilled: generic, routine, safety, IT – High-skilled: technical, management, entrepreneurship, green skills.• SMEs get better outcomes out of informal training – Divide in outcomes between low- and high-skilled employees is smaller in KISA than in formal
  9. 9. Summary of results (II)• The case of growth-oriented SMEs (based on R&D and export) – Similar rate of participation in training – Focus on productivity enhancing skills (business planning, management, technical) via informal training (participation rate twice as high as elsewhere)• Motivations for SMEs’ training activities – In-house demand (new products, production needs, financial adjustments) – External private sector activities (with suppliers, clients) – Regulations, training policies and public incentives
  10. 10. Summary of results (III)
  11. 11. Case study: Zaglebie, Poland• 30% of surveyed firms did not do any training in the previous year – Main activity: compulsory occupational health and safety training• Main barriers – Skills identification – Lack of awareness about benefits of training – Perception of low value of training activities – Weakness of business support institutions in the region• Training ecosystem driven by private training enterprises (tailor-made training or ESF projects) – Limited role of business associations and lack of cooperation between SMEs and HEIs.
  12. 12. Key policy implications (I)• Develop a public policy framework for the recognition of informal skills development activities• Provide incentives for training organisations to develop special qualifications for these activities• Prioritise productivity-enhancing skills (business planning, management, technical) for both high-skilled and low-skilled employees• Encourage co-investment by businesses – Firms seeing training as investment and putting market pressure to training providers
  13. 13. Key policy implications (II)• Use evaluation to inform entrepreneurs and policy makers about the cost-effectiveness of different training options• Involve actors in the local training ecosystem (esp. business associations) to enable tailoring in skills development• Coordinate national and local level to ensure consistency in the provision of qualifications
  14. 14. Thank you

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