How small business learnt about goods and services tax: Lessons for vocational education and training

Introduction

This report presents the findings of a research project on learning in and for small business. The recent experiences of small businesses' implementation of the goods and service tax (GST) and its associated business activity statement (BAS) were used to understand how small businesses can best develop the capacities to respond to new tasks and challenges. As the key means of determining how small businesses accomplished this task, case studies were developed. Semi-structured interviews were undertaken with thirty small businesses across two states. The small businesses represented a diversity of locations, sizes and specialties.

When considering how to understand the ways learning for small business might proceed, it was concluded that their recent experience of learning to implement the goods and service tax provided a unique opportunity to understand learning processes in small businesses for a number of reasons:

• This initiative required small business workers to develop an understanding of the new taxation system and the procedures required for its implementation.
• The initiative had to be adopted by all but the smallest of businesses. This provided a useful opportunity to understand how the different requirements of small business situations shaped how learning proceeded.
• All rich learning requires a great deal of effort and it has widely been reported that many small business operators and employees struggled to implement this initiative. Hence, the newness of the task and the requirements to be successful with its implementation were proposed as providing rich accounts of how learning proceeds in small businesses.
• A focus on a uniform task provides an opportunity to understand how the different requirements of small businesses shape their approaches to learning.

Finding an effective means for learning in small business constitutes a worthwhile, yet challenging project, and it remains central to government priorities. Those who work in small business seem to find the existing vocational education system less likely to meet their needs than those who work in larger enterprises. In addition, small business workers are less likely to have funds expended on their skill development by their employer than those who work in larger enterprises. However, small businesses in Australia, like their larger counterparts, need the capacity to respond to the changing demands and requirements of the workplace. It follows then that there are important economic as well as equity objectives to be secured in enhancing learning for small business.

Small businesses need to develop their capacities to be effective in competitive economic environments. Moreover, they are key sources of employment and economic activity in Australia, and their fortunes have a particular impact on the communities in which they are situated. Like larger enterprises, small businesses need to be able to adjust to changing demands for their goods and services.

Small business and vocational education and training

Recent research in Australia has shown that small businesses' participation in structured vocational education and training (VET) remains limited. Courses, particularly those currently taught through the national VET frameworks, have largely failed to attract the interest and participation of small business. It would appear that there is a mismatch between current VET policy and small business needs. In particular taught courses are considered to be:

• focussed on the needs of large enterprises
• based on national curriculum prescriptions rather than those relevant to small businesses
• delivered in ways often inconsistent with small enterprise needs
• based on market principles that fail to cater for small businesses.

Learning in and for small business

The research confirmed that small business operators learn mainly from other small businesses, networks, community groups, local affiliations, local experts and family members. Small business operators want advice and information that is based on familiarity with the enterprise and an understanding of the potential of the small business. Furthermore, the advice should be timely and pertinent and come from someone the small business operator trusts.

The central message of the research project is that, while short courses which develop specific kinds of skills are valuable and useful for small business operators, the VET sector needs to move beyond offering nationally accredited courses and adopt an approach that is facilitative and involves working collaboratively with small business to meet their learning needs.

The findings of the research suggest that, to promote small business learning, there is a need to acknowledge, support and enhance the contributions of local support agencies for small business learning, and encourage small business workers and operators to engage in interactions with other small businesses, local expertise and networks. A focus on facilitation and support through existing local associations and organisations can support learning in and for small businesses when it is immediate, opportune and accessible.

Localised support

The effectiveness of localised support was based in its capacity to:

• assist in contextualising the task requirements (for example, making sense of the task in terms of the readiness, capacities and requirements of small business)
• provide a basis for learning to understand what the task means for the particular small business
• provide timely and accessible support for development, improvement and refining the capacity to achieve new tasks
• assist in securing opportunities to share information.

Localised support was sourced in diverse ways; for example, through interactions with other small businesses; networks (local business networks, professional associations community groups and regional development authorities); local affiliations (friendships and community groups); local experts; and family members.

The key qualities of localised support related to their capacity to understand what had to be learnt and its relevance to the enterprise and is characterised by:

• familiarity with the enterprise or understanding the kinds of issues that the enterprises will confront
• understanding the small business' capacities, readiness and potential
• sources of timely and pertinent advice
• trusted relationships.

Ultimately, small business operators themselves need to be proactive in engaging and interacting with others to seek advice, access support and also to contribute to local networks of support.

A model of small business learning

A model of small business learning, constructed through feedback from small business operators, has been developed in this project and is designed to illuminate the learning process and highlight how forms of localised support and active engagement by the enterprise are central to learning. The model, once developed, was validated by small business operators. It comprises the following key elements.

• individuals' motivations for task engagement and learning
• individuals' perceptions of the task
• engagement (energy directed towards the task)
• four-phase process of learning comprising:
  • goal formation, or defining what had to be learnt
  • initial attempts at approximation of the task
  • improvement through practice
  • achieving a capacity for independent practice or maturing capacities
• a shift from a reliance on assistance from outside the workplace to an increasing reliance on capacities within the workplace
• sources of assistance for learning, comprising internal and external localised networks; that is, other small businesses, experts, courses, government support, industry associations.

Policy implications

This study has highlighted a number of implications for VET policy-makers and include the following:

• There is a need to move beyond viewing VET only in terms of taught nationally accredited courses. Other kinds of learning experiences and learning spaces, such as those identified in this study, need to be granted legitimacy as contributions and foundations for rich vocational learning.
• Market-based provisions and content focussed on large enterprises are failing to meet small business needs. Instead, a more facilitative approach compatible with and understanding small business needs is required.
• Support for and facilitation of learning for small business is likely to be required, as taught VET provisions alone are not entirely adequate. The focus on assisting learning experiences at the local level warrants a facilitative approach, one which is considerate and sensitive to the needs of the small business (for example, readiness, goals for learning, appropriateness).
• A role remains for short courses that develop the specific kinds of skills that small businesses need to achieve their workplace goals.
• To overcome the bias against small business in a market-based VET system, some provision of incentives for VET providers who address the needs of small business is warranted.
• A key role for government should be in building local partnerships that support learning in small business. These might be:
  • local sharing through building networks around local affiliations (for example, regional development groups)
  • supporting, developing, and building on existing networks
  • local VET providers offering provision for the development of specific skills in existing groups (industry, interest groups).

The importance of engaging in mutual support and information exchanges should be promoted and encouraged. The small businesses most at risk were isolated and unable or unwilling to engage with appropriate sources of guidance and support. Small business agencies should promote interactions proactively to ensure that worthwhile learning opportunities occur as part of the small business's everyday activities.