Training needs of small and medium enterprises: findings from an empirical investigation

Abstract

While small and medium sized enterprises (SMEs) are acknowledged by researchers and policy-makers alike as the major source of vitality in an economy, they are also found to be extremely vulnerable especially to the vagaries and turbulences of the external environment. It is therefore recognized by policy-makers in most countries that SMEs need special help for their survival and growth. Traditionally such help was offered by way of facilitating the external environment. Such facilitation will be effective only if the SMEs have the internal capabilities for taking advantage of the external facilitation. This is why the experiments with external facilitation have not met with much success especially in developing countries, where SMEs are inherently weaker than their counterparts in developed countries. Strengthening the internal capabilities of SMEs therefore has become a top priority nowadays and is positioned as an alternative or supplementary strategy for SME development. Training is recognized as an important tool for developing the internal capabilities of SMEs. However, research in the Western countries has shown that even though trainers, consultants and policy-makers consider training as an important tool for SME development, the SMEs themselves do not feel so. It is against this background that we launched a survey in Bangalore (India) to assess the training needs of SMEs, as perceived by themselves. This study is especially relevant as there are no other similar studies undertaken in India so far. The survey was conducted among 300 randomly selected SME units in Bangalore. The survey questionnaire enquired about the perceived need for training and the preferences for the topics, duration, timings, costs, training providers, etc. The findings show that the training-related attitudes and behaviour of SMEs are not very different from what is observed by the Western researchers. The overall finding of positive relationships of enterprise characteristics and the ‘acquired’ characteristics of entrepreneurs with the perception of training need suggests that training need perception is more a function of the developmental stage of the enterprise than the personal preferences of the entrepreneur. Specific findings of the study are discussed and their theoretical and practical implications are explained in the article