Sub-Theme 3 | Conclusion
It has been clear that SMEs have a potentially important role in expanding employment and output and promoting equity and welfare. However, from empirical records, it has also become clear that SMEs are in general less active than large enterprises in training their workers and more broadly developing their human resources. The market system by itself cannot correct this imbalance between SMEs and large enterprises in developing human resources. To realize SMEs’ potentially important contributions to the economy and society as a whole and to redress the imbalance between large and small enterprises, the government will have to intervene in the skills training market in favor of SMEs.
Financial assistance alone or redressing information asymmetry alone did not adequately achieve the objectives of redressing imbalance between large and small enterprises or taking advantage of SMEs’ potential contributions to the economy. On the basis of the comparative review of the experiences with the innovative government interventions in favor of SMEs, it has become clear that a government should combine financial support with organizational, institutional, and technical support for SMEs. In this sense, the experience with the SME Training Consortium in the Republic of Korea can serve as a role model.
However, in the international context, one size does not fit all. A good experience in one country does not guarantee success in others with different social, historical, economic, and political environments. The success model in one country will have to be adjusted to suit different contexts. For an SME training system to be successful, a government must establish a sound institutional framework for training by enterprises in general. The framework would include competent public and private training institutions competing in the training market with sound and flexible training programs to meet the demands of enterprises, especially SMEs. The quality of training should be verified and certified by competency or qualification tests. The trainees should be supported by guidance, counseling, and employment services for career development before and after the training programs. Since training is a public good, like basic education, a government should operate a sound training financing system, either with a sufficient government budget or a levy, a levy rebate system, or an unemployment insurance system to support training by enterprises in a sustained manner. ##MORE_LAYER_BOX## In addition, ##3D_LAYER##more conditions favorable for the application of SME training consortiums are desired##3D_TEXT:1. Lee, K. W., Y. S. Ra, and C. H. Kim. 2014. In-Service Training Policy in Korea, 2013 Modularization of Korea’s Development Experience. Seoul: Ministry of Employment and Labor and KDI School. ##3D_LINK:https://www.kdevelopedia.org/Resources/social-development/in-service-training-policy-korea--04201405130131826.do##3D_LAYER_END##, such as the following:
• The government should ensure that a training consortium is organized and operated by SMEs themselves through their associations or large enterprises to which they provide goods and supplies. When it is organized by an outside organization, especially by a training institute, the government should pay special attention to ensure the ownership of the training consortium by SMEs and autonomy of the consortium.
• It is advisable to start not on a national scale, but with a small-scale pilot project in a selected suitable area to accumulate experience and knowledge through independent outsiders’ evaluations. In mainstreaming the program, it is advisable to begin with relatively larger-scale SMEs, rather than focusing on micro or small-scale enterprises. These micro and small-scale enterprises have the hard-core problems of organizing a consortium and undertaking in-service training, and therefore are more difficult to address. It is advisable to start with relatively easy clients to deal with and build up good track records, rather than starting with tackling the hard-core problem clients, running a high risk.
• Government financial support for the SME training consortium may focus not on the capital expenditures to expand or improve training equipment and facilities, but on the recurrent expenditures for the operation of the training consortium and training management specialists. It is important to ensure that an adequate number of training management specialists are assigned to each consortium and that adequate budgets are allocated for the operations of the training management specialists, so that they can function as staff responsible for personnel and training management in each member SME.
• Governments should not discriminate against in-plant training by SMEs vis-à-vis outside institutional training in rebating training levies. ##3D_LAYER##For most SMEs, in-plant training is more effective and preferred to the formal institutional training offered by an outsider##3D_TEXT:ILO. 1998. World Employment Report 1998/99. Employability in the Global Economy: How Training Matters. Geneva. And Korea Small Business Institute (KOSBI). 2009. Issues Paper: The Actual Situation and Future Agenda of Training in SMEs. Seoul (in Korean).##3D_LINK:https://www.kdevelopedia.org/resource/view/05201812040150902.do##3D_LINK:https://www.kdevelopedia.org/resource/view/05201812040150903.do##3D_LAYER_END##.
• The government should minimize the bureaucratic red tape for the operation of the SME training consortium. The approval of training plans and the reimbursement of training levies should be carried out in a simple manner and in a short period of time. The training consortium project is not meant to regulate SME activities, but to support SMEs’ training activities. Therefore, SMEs should find the processes and procedures involved in the training consortium’s operation simple and helpful.
|Subject||Social Development < Employment|