Richard Cooney & Mike Long Centre for the Economics of Education & Training Employer Cooperation in Training

2 Significance of Cooperation in Training Governments are keen to support collective action in training –Cost & Quality benefits But how to do this in a system based upon employer voluntarism? Existing market-based mechanisms are overly driven by government ‘supply’ policies –e.g. Group Training

3 Research Questions What other business practices might support cooperative training? Do new models of productive organization support cooperative training?

4 New Models of Productive Organization Emphasise the importance of new technology –Innovation & improvement in products and processes Emphasise knowledge creation –Need for new skills and knowledge Identify new means of skill formation –Inter rather than intra firm skill development

5 New Models of Productive Organization Synchronous Supply Chains –Synchronised production systems lead to common skill requirements Business-to-Business relationships –Training as part of a package of business services

6 New Models of Productive Organization Learning Networks & Learning Regions –Knowledge-based innovation –Shared use of local resources Network Brokers and Third Party Agents –Create local networks

7 Postal Survey IndustryPop’nMailedReturnsResp’sResp. Rate Garment & F’wear Engineering IT & Communications Sci & Med Equipment Food Processing

8 Extent of Cooperative Training 13.9% of firms provide no training 68.2% of firms have no cooperative training 17.8% of firms have cooperative training arrangements There are no significant differences between industries

9 Findings Need for Training: Medium sized (50-99 employees) firms make greatest use of joint training 32.9% Firms with growing employment (+ 10%) make greatest use of joint training 25.3% Firms with a growing demand for their products make greatest use of joint training 22.4%

10 Findings Ability to Supply: Profitable firms make greatest use of joint training 22.5% Firms selling capital equipment make greatest use of joint training 26.5% Firms operating from more than one site make greatest use of joint training 30.2%

11 Findings Little evidence of supply chain, network or regional effects –Cooperating firms are as likely to sell to wholesalers as to be suppliers –Cooperating firms had no pattern of regional or industry links Little evidence of brokerage effects –72.4% received no external help

12 Findings Cooperating firms are in thin networks –53.9% partner with 2-3 other firms Cooperating firms partner regularly with the same firms –48.9% have partnership of more than 3 yrs –54.8% partner with the same firms regularly

13 How is Cooperation organized? Small scale, informal arrangements dominate –Informal liaison of HR staff 46.1% –One partner organizes the training 31.2%

14 Key Features of Cooperating Firms Firm size Firm profitability Relationships with firms outside their industry Capital equipment vendors Workforce skills are important to the business

15 Why Firms Do Not Cooperate Do not have a need for training 30.5% Satisfied with existing arrangements 35.4% Lack of suitable arrangements or suitable partner firms 30.2% Concern about knowledge spill over or loss of intellectual property 23.4% Concern about poaching of staff 18.5%

16 Conclusion Business-to-Business relationships support cooperative training Cooperative training is most often supplied as part of a package with new technology Cooperative training is but part of the training effort of firms

17 Conclusion Firms that already provide significant amounts of training are most likely to provide some training cooperatively There are few prospects for expanding cooperation, except through the creation of new kinds of training market intermediaries