Workshop A - Session 3

Title: Employability and Competitiveness - Working with SMEs Chair: Tom Cannon, Management Charter Initiative, UK Tom Cannon, Management Charter Initiative, UK

Introduction by Tom Cannon

It is my pleasure to chair this session on employability and competitiveness, with the particular focus on working with small and medium-sized firms.

If we cannot convert small businesses to a strong sense of commitment to lifelong learning, most of the other efforts that we try will be doomed to have a lesser effect on the competitiveness of Europe than they should have.

I believe lifelong learning is the key to employability and competitiveness because it provides the real competitive edge. Lifelong learning today and in the future is about getting a strategic edge. It is the key to building value and poses a special challenge to small firms especially if we recognise that the essence of employability is about developing the quality and competencies in the small firm sector in particular, so that people can make progress and develop their capabilities over time.

Let us recognise that in Europe for most of the last 15 to 20 years we have singularly failed to mobilise the potential of the small and medium-sized firm sector. In one year alone in the United States, over 2 million new jobs were created by small firms when just over a quarter of a million were created within the European Union. If we go back just under 20 years, we will find that the European Union, 12 of the core without their recent new entrants, had a small firm population which was roughly the same size as the United States. As of 1997 our small firm population is a third less than the United States.

New Markets

That is not just a matter of jobs. It is undermining the competitiveness of Europe in areas like manufacturing; and here we vividly see the decline in European employment in manufacturing, which is reflected in the decline in European competitiveness in so many areas. That decline is being exaggerated in the new markets which are shaping increasingly the technologies of the future. Here we are talking about those new markets which are being created by new electronic information and communication systems. Whether it is business to business communication, whether it is retailing, what we are seeing here are dramatic increases in new industries and new markets.

Those dramatic increases are being driven by small firms and basically in Europe we are failing to capitalise on that process. We will continue to fail to be competitive, generate jobs and create a truly employable workforce, if we do not adapt to these new knowledge industries. Look at the growth of the Internet and the growth in the number of web servers. In the Internet, there are now something like 15 million users and user groups and a quarter of a million distinct web drivers.

Lifelong learning is central to that issue of competitiveness in small firms, in the new global economy which is information technology driven, human centred, based on enterprise, committed to sustainable development, fundamentally de-centralised and based on co-operation. Lifelong learning is the key to competitiveness particularly in small and medium-sized firms. There is a choice going on and we have had a great deal of talk about the knowledge revolution which is at the heart of this lifelong learning transformation of Europe. Here we see the characteristics, the choices we are having to make. We have to commit ourselves within Europe, driven through small and medium-sized firms, to lifelong employability, to maximising the opportunities from learning, committing ourselves to managing talent and developing an extensive view of stakeholders. We can only do that if we develop a strategy which links rewards to increased confidence and capability, if we emphasise the importance of capability and competence, particularly in the dynamic small firm sector, if we build within the new small frame universe an ability to cope with continuous discontinuity.

We can only do that if we have small and medium-sized firms which are capable of integrating learning and work and are capable of adapting to the new rules in the new knowledge based lifelong learning economy. Small firms are at the heart of this, not just because they account for over a quarter of all jobs within Europe, not just because there are within Europe now 40 million small firms, but because, in these new markets that are shaping the new economy, you need the drive, you need the capability and you need the commitment of the small and medium-sized firms sector.

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