Benefits of training for small firms questioned

October 31, 1997

There is no evidence that education and training can help small firms to prosper, a report for the Department for Education and Employment has found.

The report warns that "policy-makers need to recognise that the presumed positive impact of training upon small firms' performance remains unproved". This has particular implications as the government prepares to publish its lifelong learning white paper later this year.

Despite this warning, the government looks set to push for training in small firms.

In its introduction to the Warwick University research paper, Training provision and the development of small and medium-sized enterprises, the DFEE says: "If a substantial number of firms are not providing training for their employees then, in principle, this is an area of concern for thegovernment."

Bob Fryer, chair of the National Advisory Group for the government's lifelong learning white paper, said last week: "If we can't get lifelong learning for employees in small firms, the idea of a learning society is a mere pipe dream."

The report, by David Storey, director of the Centre for Small and Medium-Sized Enterprises at Warwick, acknowledges that education and training in small firms is good for the economy, but warns that firms should not be encouraged to train staff on a promise of improved business performance.

Professor Storey found that there was no "well conducted research, which showed the provision of training clearly led to (or is even associated with) enhanced subsequent performance". Studies that claimed to show a link "were questionable".

He said one widely quoted report "has no statistical validity whatsoever" because it failed to use control groups.

The report highlighted some of the obstacles hindering training provision. It said there was "ignorance" where small-firm owners were opposed to formal learning, which they associate with school.

"Market forces" were the biggest obstacle, as firms were focused on short-term survival issues, and feared that well-trained staff would be "poached" by larger firms.

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