The Impact of Collaboration Between Industry and Academia on SME Growth

One important aspect in the small firm sector is the increased provision of training available to encourage small businesses to expand and develop their knowledge base. In the belief that new small firms can generate a number of new jobs at a time of high unemployment, the UK government in the early 1980s developed public policy to encourage small firm formation and growth. Measures have been enacted to assist small firms in the UK in areas of taxation, education, funding and placement schemes. (Cross 1983). Although Curran (1986) describes this as a 'heading plunge' into a policy of discrimination in favour of the small enterprise, and is critical of the effectiveness of many of these actions, the measures are a clear indication that public policy and funds are firmly committed to support the small firm sector (Marlow 1992). Since then local support agencies, such as The Training and Enterprise Councils (TECs), and Local Enterprise Councils (LECs) in Scotland, funded by the Department of Trade and Industry and European Union offer professional consultancy advice and training to small firms and their owners. Such agencies offer help in the form of business start-up support and training, management skills and any aspect, which can aid growth in the small firm. However, the indications from the agency consultants have found that not enough owner/managers are utilising this enterprise network to assist business growth (Marlow 1992, Choueke and Armstrong 1998).     

Higher Level Skills Training: Meeting the Needs of Small Businesses

In order for businesses to remain competitive it is suggested that across industry there is a requirement for ‘higher and broader’ skills. Universities have an important role to play in satisfying the need for higher level skills training for businesses of all sizes. With respect to small firms, the training and development provided by universities has traditionally been founded upon an educational/large firm model. In order to make significant in-roads into the small firm training market it is argued that universities need to attend more closely to the specific needs of client organisations. One way in which the small firm higher level skills training market can be segmented is in terms of sector. The present study examines the higher level skills training needs of a sample of UK small firms from the perspective of sectoral variations. Differences between firms occupying different sectors were observed in terms of funding of training, responsibility for training and types of higher level skills training undertaken. Attitudes towards universities as training providers were generally favourable with little inter-sectoral variation. It is argued that these findings need to be taken into account if universities are to address the real, as opposed to perceived or presumed, needs of small businesses. A systematic-collaborative model of the customer-supplier relationship for the small firm training market is put forward.     

The role of training and skills development in active labour market policies

There is persistent evidence over several decades that the UK lags behind its international competitors in terms of the skills and qualifications of its workforce, with a detrimental impact on overall economic performance. The most recent attempt by the UK government to address this includes a new strategy aimed at increasing the degree of integration between skills policy and employment policy in the UK. In light of this development, this review paper considers the extensive international evidence on the role and effectiveness of training and skills interventions, as part of a broader portfolio of active labour market policies. The review concludes that while large‐scale, ‘broad brush’ schemes have little impact as part of such a portfolio, more targeted programmes addressing specific skill needs may have some impact on employment chances of workless groups.     

Small Firm Statistics: A Hotel Sector Focus

This article contrasts and compares statistics from the UK small firm sector in general with those related to small firms within the hotel industry. In doing so, it is clearly illustrated that there is a need to focus research, resultant policy and strategy on the specific issues facing small firms at a sub-sector level, rather than assuming a homogeneity of the small firm population in general. The paper concludes that the plight of the small firm operating within the hotel industry is dire and questions what the future holds.     

Creating a high‐skills society during recession: issues for policy makers

The present study looks at the skill formation policies adopted by policy makers in Greece in order to create a high‐skills society. It examines empirically the demand side of the skill creation process within 300 small enterprises in order to understand how far supply‐side measures have influenced the demand for well‐trained staff within small businesses. The article draws on empirical data from 650 interviews with workers and small firm owners that explored owner demand for higher level skills and training. The study questions the effectiveness of the measures put forward by policy makers in order to encourage an up‐skilling strategy in the country. The analysis reveals that this policy agenda has been supported predominantly by various skills supply‐side initiatives including investments in higher education and subsidized accredited company training. Yet the empirical evidence indicates that such initiatives have not so far influenced owner demand for higher level skills and training, suggesting a new agenda for policy intervention may be necessary. The study provides valuable lessons for policy makers across the advanced capitalist world on the development of a high‐skills society.     

The career path to instructional design project management: an expert perspective from the US professional services sector

There are well‐documented competency standards for instructional/training designers and for project managers. However, there is little research about what skills and abilities employers expect from those seeking to become instructional/training design project managers, particularly within specific industry sectors. Focusing on the US professional services sector, the sector in which firms have a global impact and in which human capital is the largest asset, this article addresses the ‘must have’ skills/competencies, characteristics and organizational conditions associated with career advancement from instructional designer to instructional design project manager by means of an expert study that is grounded in an in‐depth literature review. In addition to enhancing knowledge of instructional designers’ competency development for career advancement in the professional services sector, this study also offers some concrete recommendations and implications for research and practice.     

Small firms and the failure of national skills policies: adopting an institutional perspective

Both skills and small firms have been increasingly prominent in policy agendas across the world in recent years. Skills are now seen as being crucial to economic prosperity, yet evidence consistently shows much lower levels of training, on average, in small firms than in larger businesses. Policy makers in various countries have sought to address this perceived problem and to stimulate skills development in small firms, but have attempted to do so in different ways and with varying degrees of success. It is this divergence in national skills policies, as well as its causes and implications for skill formation in small firms, that this paper seeks to illuminate. In doing so, it adopts an ‘institutional’ perspective that advances current understanding of how and why skills policies adopted in different countries appear to have varying effects on small firms. Through employing this institutional analysis, the paper promotes an awareness of how historical, social and economic forces in the ‘corporatist’ systems, found for example in Germany and Scandinavia, tend to provide a more supportive context for skills development in small firms than the liberal free market systems found elsewhere in the world, such as in the USA, Canada and the UK – which is highlighted as an illustrative case in this paper.     

Incremental Innovation and Business Performance: Small and Medium-Size Food Enterprises in a Concentrated Industry Environment

Past studies have analyzed issues pertaining to the definition of innovation, methods of measuring innovation and the relationship between organizational characteristics and innovation orientation. Extant studies have adopted a large business or a technologically intense context of study. By studying the adoption of new products, methods, systems, markets, and supply sources in small and medium-size seafood retail enterprises, this study reviews innovation and the adoption of innovation in a broader and novel context. Seafood retailers in this study operate in a concentrated industry environment where two large supermarket chains account for more than 70 percent of national food retail sales. The seafood retailers operate in a highly competitive environment, the industry is maturing, the firms are not very advanced technologically, and the sector has a disproportionately large number of firms owned and operated by persons of non-English speaking backgrounds. The results of the study indicate that incremental innovation offers substantial competitive advantages to small and medium-size firms, that incremental innovations can be adopted and operationalized rapidly by entrepreneurs with different cultural backgrounds and skills, and that small and medium-size firms that focus on sales and marketing innovations are profitable and are able to compete successfully with large businesses.     

Firm versus Sector Effects on Profitability and Growth: The Importance of Size and Interaction

In this study we contribute to the long‐standing debate on the impact of firm versus industry effects on firm performance in three distinct ways; firstly by testing the firm, industry and their interaction effects on performance, secondly by examining the impact of each effect for different size groups, and lastly by measuring performance in terms of sales growth in addition to profitability. We use data of 71,750 UK firms, between 2002 and 2004, and employ moderated regression analysis for three sub‐samples namely micro, SMEs and large firms. With regards to profitability, we find the interaction effect to be significant in all sub‐samples for broad level of industrial aggregation (SIC4). For narrow industrial aggregation (SIC2), the interaction effect is only significant for micro firms. Neither of the above effects is significant for sales growth.     

Home-owned versus foreign-owned firms in the UK automotive industry: Exploring the microfoundations of ambidextrous production and supply chain positioning

The UK automotive industry is home to a large number of foreign firms, demonstrating the open nature of competition. However, the industry necessitates both exploitative and explorative capabilities. Contingency theory suggests that firms align their internal structure with contextual factors. As such, the aims of this study were to investigate whether it was possible to distinguish home-owned (UK) and foreign-owned firms based upon: a) the microfoundations of ambidextrous production, which are conceptualised as lean and agile routines; and b) the tier at which these firms operate in the automotive supply chain. Survey data were collected from 85 home-owned and 55 foreign-owned firms within the UK Midlands automotive industry. Logistic regression results revealed that home-owned firms were significantly more likely to be implementing explorative (agile) production methods, whereas foreign-owned firms were significantly more likely to be implementing exploitative (lean) production. Home-owned and foreign-owned firms were found to be significantly more likely to be operating upstream and downstream in the automotive supply chain respectively. Thus, the findings support a contingency theory explanation, suggesting that firms align their performance priorities with contextual factors, but we argue that home-owned and foreign-owned firms have evolved to compete based on their different innovative capabilities, which are located at different tiers of the automotive supply chain. On this basis, although neither home-owned nor foreign-owned firms were found to be endogenously ambidextrous, we argue that foreign-owned firms internationalise into the UK automotive sector to exploit the explorative capabilities acquired by home-owned firms operating upstream in automotive supply chains, thus enabling ambidextrous capabilities at an exogenous, industrial level.     

The Role of Small Firms in the Technology Development of China

Science & Technology (S&T) is high on the Chinese policy agenda and the country aims at becoming an innovation‐driven economy. Small firms have been important in technology development in other East Asian countries but the situation in Chinese small firms has been far less explored. We examine how much S&T has been accounted for by small firms and how their S&T intensity differs across industries and ownership groups. We also analyse how various firm characteristics differ over size categories and S&T status. This study is based on newly processed micro‐level data provided by the National Bureau of Statistics with information on a large number of S&T indicators for manufacturing firms in China in 2000 and 2004. Our results suggest that the role of small firms in Chinese S&T is similar to that in many other countries. They account for a comparably small share of total S&T and most small firms are not engaged in any S&T. However, those small firms that do engage in S&T tend to be more S&T intensive and have a higher output in terms of patents than larger Chinese S&T firms.     

The Evolution and Structure of Industrial Clusters in Japan

This paper focuses on two aspects of the evolution and structure of clusters in Japan, namely, what gives rise to clusters and what benefits are acquired by small firms from participating in clusters. The determinants of clustering are discussed by way of a review of the history of 14 industrial clusters which cover a wide range of industries and locations in Japan. It is noted that different factors dominate in different cases. Among the more important ones are the existence of leading large firms, the availability of a pooled labor market, and the presence of public research and testing facilities. The four most important benefits from clusters reported by small firms are : (i) specialization; (ii) ease of procurement; (iii) diffusion of technology, and (iv) public policy support. Access to skilled workers is not reported to be a significant benefit. This may be explained by the fact that the dominant source of skills acquisition among Japanese workers is on-the-job training and such skills may be too firm-specific to be useful to others, even within a geographically concentrated cluster.     

A change‐recipient perspective on training during organizational change

In this paper, we examine skill‐related uncertainties among middle managers during organizational change. The question emerged from a qualitative study of two planned organizational change initiatives in the public sector where a group of middle managers were required to learn new skills because of changes in their work tasks and managerial roles. In both cases, we found that change recipients experienced two types of job‐related uncertainty in the post‐training phase: role ambiguity and operationalization uncertainty. Role ambiguity refers to challenges in understanding diverse expectations tied to the future work situation and necessary skills, whereas operationalization uncertainty refers to the challenges of putting new skills into practice. Although necessary and important, formal training was not sufficient to resolve these challenges. Rather, the change recipients engaged in informal and horizontal communication to resolve uncertainties related to new skill and role requirements.     

Regulation and Turbulence in the Portuguese Wool Textile Markets

This paper traces the changing contribution of small firms to manufacturing in Japan and the UK between 1972 and 1992. It shows that there are significant and important differences between the two countries, although in both cases small firms provided an increasing share of the total stock of firms over the period. In the UK however small firms also increased their employment share, primarily at the expense of large firms whilst in Japan their share remained constant. On of the most striking differences is the fact that in the UK only the very smallest micro businesses achieved a net increase in numbers, whereas in Japan all sizes of firm recorded an increase in numbers, albeit at declining rates by firm size.     

Strategic responses to low-cost competition: Technological lock-in in the Dundee jute industry

Abstract

This article examines path dependency and technological lock-in in the evolution of the Dundee jute industry, from its beginnings in the 1860s to its demise in the 1970s. The evolution of the industry is explored using the resource-based view of the firm (RBV). The results suggest that the nature and construct of jute fibre was the root cause of a lack of sustainable strategic responses in the sector. Path dependent decisions and technological lock-in meant that many firms were not able to make successful strategic switches, although the capabilities of their engineering skills allowed some firms to endure for longer. Thus, the article extends the RBV to a deeper firm capability level and complements cognate literature on the UK textile sector with a finer specification of the phases in jute’s evolution.     

International briefing 24: training and development in Bangladesh

Training and development activities in Bangladesh have yet to be systematic and able to fulfil the needs of the economy and industry. The national educational and training system failed to provide adequate knowledge and skills to the workforce. However, private sector organizations are undertaking different initiatives to cope with the industry skill requirements and are trying to develop their own employees. Recent government initiatives seem to be encouraging for future training and development activities in Bangladesh.     

Inter-firm scalar linkage in India: A class within the small scale industry

Along with the growing industrial sector, functional complementarity between large and small scale enterprises has become a widely prevalent phenomenon. Expanding the base of the industrial production leads to division of processes where large and small scale units operate as complementary to each other. Such complementarity and division of labour between the different sized units results into cost minimization, and acceleration in growth of the manufacturing sector.However the extent and the pattern of functional complementarity (between large and small scale enterprises) is likely to be conditioned by market as well as institutional factors. Therefore, in order to examine the impact of interscale complementarity in terms of growth as well as of distribution of gains across large and small scale enterprises it is very important to learn about the nature of interfirm linkages and the process through which linkages get established. It is in this context, the present paper furnishes details based on a case study of Textile Machinery Parts Manufacturing (TMP) industry in a metropolitan city (Ahmedabad). The industry represented is constituted by a large number of small scale firms that are engaged in fabricating replacement parts for the users of machinery equipments (i.e. Textile Mills) who operate on a large scale. Owing to wide range of products, and in case of some parts higher frequency of replacement, the TMP industry, at least till recently, has sustained a large number of small firms.The major findings of the analysis are: (i) The incidence of inter-firm linkages is limited to about a third of the small scale firms; (ii) Among various forms of linkages the marketing linkages are the most predominant (iii) The linkage relationship has been a positive factor in determining the performance of the small scale firms; (iv) Personal contacts play an important role in inter-firm linkages, thus benefits of linkage relationship are mainly confined to a small social-group of industrialists; (v) While the small scale suppliers operate under a highly competitive market, the buyers often enjoy oligopsonist's advantage; hence the gains of competitive efficiency tend to favour the large scale sector.     

Corporate Social Responsibility and Societal Governance: Lessons from Transparency in the Oil and Gas Sector

This article evaluates the potential of the current Corporate Social Responsibility (CSR) agenda for addressing issues related to societal governance. The investigation focuses on the experience of the oil and gas sector, which has been among the leading industry sectors in championing CSR. In particular, the article analyses the issue of revenue transparency, which has been the principal governance challenge addressed by multinational oil and gas companies. The article suggests that (1) tackling governance challenges is crucial to addressing the impact of corporate activities; (2) current CSR and policy initiatives are entirely insufficient in addressing governance challenges and (3) corporate activities may be contributing to governance failures.     

The latent demand for bank debt: characterizing “discouraged borrowers”

Concerns that small firms encounter credit constraints are well entrenched in the literature, despite widespread empirical evidence that a relatively small proportion of small firms have their loan applications rejected. However, many firms may be discouraged from applying for fear of rejection. These businesses are the focus of this paper. Based on responses to a large-scale postal survey of UK small and medium-sized enterprises (SMEs), we find that twice as many businesses were discouraged from applying for a bank loan than had their loan request denied. More particularly, we observe a number of distinguishing characteristics of “discouraged borrowers” (relative to applicants). These include: strategy, sector, prior entrepreneurial experience and banking relationships. The implications of our findings for policy and future research are briefly discussed.