Are two worlds colliding? The provision of training and learning services for small business

The study examined how training and learning is being promoted for small business, the products provided, the strategies adopted, and assessment of impact and recent initiatives taken by the range of stakeholders. In view of the short time provided for the study, this report provides an impressionistic snapshot of the current situation, and much detail remains to be added to this snapshot.

The barriers to participation by small business in structured training have been established in research over the past decade and more. These include both demand- and supply-side factors and involve the well-documented preference of small business for training that is short, sharp and specific, convenient, low-cost and of immediate relevance to practical business issues.

I found that this preference of small business remains and is reflected in the orientation of most training for small business towards well understood business imperatives. This orientation may be found in the business programs provided by State and Territory small business agencies and in short-course packages provided by vocational education and training (VET) providers directed at such imperatives.

There are also supply-side barriers and disincentives which continue to operate. Small business by its nature is a difficult market for VET providers without the immediate market rewards from such markets as servicing larger firms and the overseas student market. While flexible delivery strategies have been promoted for small business, the up-front costs continue to be a barrier with a low capacity of small business to meet these costs.

While barriers to participation by small business in formal training have been well documented, there is also research evidence on the significance of informal learning which occurs in the workplaces of small firms. Informal workplace learning is a key element in the way small business learns and develops skills, and up to now informal workplace learning has not been well linked to the formal VET system except through apprenticeship training and provision for recognition of prior learning (RPL). There is a growing international interest in workplace learning for reasons discussed in the report.

There is a paucity of recent research on the impact of VET reforms since 1996 on small business. These reforms include the implementation of New Apprenticeships, Training Packages and Toolboxes, the promotion of on-line learning and measures to make VET more flexible and responsive to user demand.

While some customised products, such as the Certificates III and IV in Small Business, have been implemented, there is no available research evidence on their impact. The available evidence suggests that the current situation remains patchy.

Strategies that work

There has, however, been considerable progress in identifying 'collaborative self-help models' that support the development of learning and skill in small business. The Small Business Professional Development Program (SBPD) which operated between 1996 and 1999 trialled such strategies in a large number of projects.

These collaborative self-help strategies were seen as well suited to the small business environment and culture, and were usually effective with special project funding. They were identified as including the following:

• building networks and clusters, mentoring, workplace coaching, action learning and benchmarking

A number of these strategies have been applied in both State and Commonwealth business programs such as Information Technology Online (ITOL) and Commercialising Emerging Technologies (COMET).

While these strategies can be effective with special project funding and support, the task is now to mainstream their adoption in regular VET funding, and possibly in other funding sources.

Potential of e-learning

While there is considerable research on these strategies, there is less research evidence on the impact and potential of e-learning for small business. There has been a major expansion of e-learning in large firms, in particular in the United States, and this expansion is predicted to continue. Much American development involves sophisticated blended learning systems which link e-learning with other learning strategies, such as face-to-face instruction and action learning, in synergistic ways. Finding ways to develop e-learning in blended learning strategies in cost-effective ways in small business is a critical issue.

The challenge of a dual system in the knowledge economy

The major findings and conclusions of the report involve the relationships of the dual systems which are serving learning and skill development in small business. These are:

• the formal VET system of accredited provision and qualifications
• the informal sector comprising business short courses, advisory and support services and workplace learning

There has been a considerable expansion of the informal sector driven by a mix of contextual influences, new technologies, government regulation and market opportunities such as export. The expansion of the informal sector will continue with e-learning in the workplace a likely further stimulus to expansion.

There are at present few bridges between the two systems and few incentives for people in small business to move from the informal sector, which meets their needs in a practical lowcost way, into the formal VET system.

While the informal sector has a necessary focus on meeting immediate business imperatives, the result of this situation is an orientation towards the short-term 'here-and-now' and 'just-in-time'. This orientation towards the short-term means that necessary longer-term developmental objectives involved in building an enterprise culture and entrepreneurship, that fosters innovation and adapting to changing conditions and opportunities, is neglected. The vision of the Karpin Task Force for an 'enterprising nation' is not being progressed sufficiently.

Building a culture to support learning, skill and enterprise

There is consequently a compelling case in the context of the globalised knowledge economy, for a new paradigm to drive learning, skill and enterprise in small business. Such a paradigm would link short-term practical objectives and longer-term development objectives in a more holistic and integrated approach. It will require collaboration and partnership among stakeholders and progress towards a whole-of-government approach and shared vision.

It will have a tripartite orientation towards the needs of enterprises, employees in small business and communities. It will foster the alignment of business strategy and human resource development so as to build human capital and a culture that fosters enterprise and innovation.

A way of progressing towards this integrated/holistic approach is discussed in chapter 9, with ten directions for policy summarised in exhibit 2 which is given below.

Exhibit 2: Fostering small business learning and skill: Ten key directions for policy

Progressing this vision for learning, skill and enterprise in small business will require as priorities:

• consultations with stakeholders on ways to bridge the two systems at national, State/Territory and local levels
• the development of information and materials to promote a better understanding of the VET contribution and the need for strategic perspectives in maintaining the competitive position of small business in the globalised knowledge economy
• development projects at the local level for field testing of strategies to build an integrated/holistic approach
• development projects to link the significant potential of e-learning for small business with the collaborative self-help strategies that fit the small business environment and culture and with current initiatives to promote e-commerce in small business

While all ten directions for policy will require attention in building the necessary learning, skill and enterprise culture in small business, the priorities identified above provide a realistic and feasible starting point in addressing the challenge of small business in the information age.

The consultations with stakeholders proposed above may be seen as a step towards a wholeofgovernment approach which links initiatives taken at national, State/Territory and local levels in a comprehensive strategic framework for learning, skill and enterprise in small business.

There is a range of initiatives at national, State/Territory and local levels discussed in this report which could be linked in strategic ways, so as to foster synergies through ëjoined-upí polices, and so as to provide value-added outcomes for people in small businesses.

A comprehensive national learning, skill and enterprise strategy for small business will bring substantial benefits for people in small business in bringing together, for mutual benefit, the two worlds discussed in this report. With vision, partnership and good will the new world of small business in Australia can be achieved.