About the research

Inter-firm cooperation in training by Richard Cooney and Michael Long

Competition between firms has been identified as being the basis of efficient markets. Competition leads to benefits for consumers and drives firms to greater efficiencies in the production of goods and services. However, research and experience suggest that cooperation among firms provides benefits in a range of business service activities such as marketing or training services. For many firms, particularly small-to-medium-sized firms, cooperation with other firms becomes a key strategic focus in the effort to realise business efficiencies.

Based on a survey of 600 firms in five manufacturing industries, Richard Cooney and Michael Long investigate cooperation among firms in the provision of training. It explores various aspects of cooperation in these industries and identifies the policy implications of such training arrangements for the vocational education and training (VET) sector.

Key messages

• A modest proportion (less than 20%) of Australian manufacturing firms participates in cooperative training arrangements. For those firms that do, such arrangements are only part of their overall training effort.

• Cooperation in training occurs largely through pre-existing business-to-business relationships. Cooperative training arrangements help firms to reinforce these relationships, provide better-quality training and save money.

• The VET sector currently has only a marginal involvement in cooperative training arrangements.To expand this role, training providers need to develop networks within the business community and arrangements capable of meeting the needs of a cluster of firms.

While acknowledging the low response rate of the survey (21%) and the potential sample bias towards firms that provide training, this report provides an important contribution to understanding the nature and extent of inter-firm cooperation in training and the potentially significant role that the VET sector has in these relationships.

Readers interested in employers’ use of vocational education and training should also see:

• Australian vocational education and training statistics: Employers’ use and views of the VET system 2007 – Summary (NCVER, 2008)

• Reasons for training:Why Australian employers train their workers by Andy Smith, Eddie Oczkowski and Mark Hill (NCVER, forthcoming).

Tom Karmel
Managing Director, NCVER

Copyright © NCVER 2003-2010    ABN 87 007 967 311