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LEVERAGING TRAINING AND SKILLS DEVELOPMENT
  IN SMES – AN OECD PROJECT


Marco Marchese, Economist (On behalf of Dr. Cristina Martinez)
OECD Centre for Entrepreneurship, SMEs and Local Development
Local Economic and Employment Development Division
marco.marchese@oecd.org ; cristina.martinez@oecd.org
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.
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
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
Methodology

• Quantitative data through an online firm
  survey (1080 firms answered)

• Qualitative data through firm interviews
  and workshop with stakeholders in local
  training ecosystems.
Geographical coverage

•   East Flanders, Belgium
•   Zaglebie, Poland
•   West Midlands, UK
•   Ankara, Turkey
•   Quebec, Canada
•   Manitoba, Canada
•   Canterbury, New Zealand
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)
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
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
Summary of results (III)
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.
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
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
Thank you

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

  • 1. LEVERAGING TRAINING AND SKILLS DEVELOPMENT IN SMES – AN OECD PROJECT Marco Marchese, Economist (On behalf of Dr. Cristina Martinez) OECD Centre for Entrepreneurship, SMEs and Local Development Local Economic and Employment Development Division marco.marchese@oecd.org ; cristina.martinez@oecd.org
  • 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. 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. 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. 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. Geographical coverage • East Flanders, Belgium • Zaglebie, Poland • West Midlands, UK • Ankara, Turkey • Quebec, Canada • Manitoba, Canada • Canterbury, New Zealand
  • 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. 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. 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
  • 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. 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. 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