There is tremendous pressure at government level (both national and EU) toencourage greater participation in the information society by small and mediumenterprises (SMEs). This is reflected at policy level in pushing the role that SMEscan play in innovation, in improving the functioning and competitiveness of supplychains and in the wider spread and stronger effectiveness of e-commerce (DTI,1998; EC, 1997, 1998). Two main related drivers appear in policy documents:
(1) increasing EU competitiveness in the face of global competition (especially from the USand Japan);(2) boosting sustainable local development in order to reduce social exclusion and to build aknowledge economy in Europe.
Although global competition and regional economies tend to be the province of large national firms and multinational corporations, the business effects impact onSMEs. As well as facing tougher resource constraints in marketing their productsabroad, SMEs face tougher competition for necessary competences and skills inlocal labour markets due partly to a poor supply of such skills and partly tointensified competition from larger firms. In its 2002 report on workbased learningin SMEs, Britain’s Learning Skills Development Agency (Hughes et al, 2002),which has identified a number of critical skills shortages among different sectors of SMEs, summarised the policy challenges as:
‘In a fast-changing world of work, the ability to adapt and develop new learning and skills is acrucial ingredient in a successful economy. Globalisation and the knowledge-driven economyrequire the UK to develop a more highly-skilled workforce in order to compete within high-value-added sectors of the world economy,’ (page, 14)
In spite of the strong pressures, however, the report also acknowledged that SME participation is very poor and that most training is informal. The report concludedthat workforce learning is very important in developing knowledge in the firmnecessary to its survival and growth but that ‘there are other ways in which theworkforce may be developed and a wide range of methods may be used. The rangeincludes open and distance learning (paper- or ICT-based)’.Increased use and commercial applications by SMEs of more advancedinformation and communication technologies (ICT) and related services are seen by policymakers as the key to improved competitiveness and a knowledgeeconomy. A UK-government funded study by the Centre for Research onInnovation and Competition (CRIC, 2000) into the future scenario for SMEs of theICT revolution drew strongly explicit links between the use and development of 1