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Knowledge Managment and e-Learning in SMEs

Knowledge Managment and e-Learning in SMEs

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Published by c_w_j_a_gray8907
Research-based article on the effects of e-learning and knowledge management on small firm entreprenurship.
Research-based article on the effects of e-learning and knowledge management on small firm entreprenurship.

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Published by: c_w_j_a_gray8907 on Jun 04, 2009
Copyright:Attribution Non-commercial


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‘Knowledge Managment and e-Learning inSMEs’Colin GrayProfessor of Enterprise DevelopmentOpen University Business SchoolMilton Keynes MK7 6AAUK
Phone: +44 (0)1908 655862e-Mail:c.w.j.a.gray@open.ac.uk 
: Although relatively few very small and medium enterprises (SMEs)have yet been affected profoundly by moves towards a new
information society
knowledge economy
, many more are already affected indirectly. Information andcommunication technologies (ICT) are impacting on virtually all SMEs. Regular studies conducted by the OUBS-based Small Enterprise Research Team(SERTeam) and large scale EU and UK surveys of SMEs show near saturation useof PCs, widespread access to the Internets and increased use of networkedcomputers, mobile telephony, palmtops and so on. However, local developmentand policy reports reveal a picture of poor management and lack of ICT skills prevailing among many SMEs. There are a growing number of policy initiatives, atregional, national and EU levels, to improve ICT capabilities among SMEs and toincrease innovation and the development and sharing of knowledge within SMEsthrough encouraging lifelong learning. ICT is also seen as opening new possibilities for supporting e-learning in SMEs. Yet, once again, SME participationis very low, particularly among the largest SME sector, the microfirms with fewer than 10 employees. The most common reasons given by SME owners include lack of time, inconvenient locations and low relevance.Over the past 5 years or so, OUBS has been engaged in a number of longitudinaland cross-sectional surveys of management development, use of ICT andknowledge management in SMEs. Drawing on the findings from these regular surveys, plus relevant findings from recent large scale EU and UK studies, this paper examines SME learning needs and the effects of increased ICT-adoption onthe acquisition of knowledge necessary for their survival, growth and success inthe new economy, and whether ICT mediated e-learning holds the solutions for acquiring these necessary competences and skills, and overcoming the commonSME participation barriers.
: SME, learning needs, training, management development, ICT,knowledge management, e-learning.2
1. Introduction
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

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