5.1. THE NATURE OF THE FINDINGS
This report has focused on the impact of external pressures on African small and micro enterprises and the role that education, training and enterprise development practices and policies can play in responding to those pressures. The focus has been on identifying areas through which enterprises can move forward to new, more competitive positions, thus contributing to economic growth and poverty reduction. In this chapter, we will highlight some of the major issues this research raises.
5.2. THE IMPORTANCE OF LEARNING-LED COMPETITIVENESS
Given the pressing concerns of much of the debate on Africa with poverty, war and famine, it may seem that a focus on learning-led competitiveness is insufficiently grounded in African realities. This is not the case. Whilst it is vital that pressing problems be realistically identified and addressed, it is equally crucial that African countries seek to avoid falling further behind in developmental terms. If African countries do not address the challenges of globalisation carefully then there is every likelihood that they will pay a considerable cost in economic, political and social terms. The small and micro enterprises of Africa are often faced with significant obstacles to their growth and survival at present. Nonetheless, it is important that these are seen as obstacles to be overcome by targeted effort, not barriers to future success.
Globalisation pressures increase the priority for these African enterprises of developing strategies that can maximise their competitiveness. Globalisation also reshapes the nature of competitiveness strategies. In particular, it heightens the importance to enterprises of capturing the benefits of institutional and individual learning. Whilst education and training do not determine enterprise success, it is clear that they can play an important role in such success.
5.3. THE LEARNING ENTERPRISE AND THE OBSTACLES IT FACES
There is evidence, from all three project countries, of SMEs that are highly successful and that are practising learning-led competitiveness strategies. New niches are being exploited, such as in fashion and design in Ghana, low cost capital goods in Kenya and West African clothing in South Africa. In several cases, new processes and technologies can be seen in action. A number of SMEs in each country are engaged in exporting and in supplying products and services to large manufacturers and retailers.
However, part of the reason for qualifying the significance of education and training's impact on enterprise performance relates to the very real obstacles that stand in the way of enterprises that seek to learn to compete. There is evidence from across many parts of Africa that macroeconomic policies have too often disabled rather than enabled enterprises and that macroeconomic trends have a mixed impact on SMEs. High levels of corruption and low levels of trust also undermine enterprises' ability to grow and, crucially, to network. This is important given the importance of information and technology in shaping positive responses to new challenges. This problem is intensified by weak infrastructure and inadequate capital, which may prevent entrepreneurs from becoming more competitive even where their learning strategies are appropriate. It is misleading, however, to assume that all SMEs are driven by entrepreneurial goals and are actively seeking to find sustainable niches. Programmes predicated on such an assumption run the danger of mis-specifying the challenge of supporting a large number of SMEs.
5.4. LOOKING BEYOND THE INDIVIDUAL FIRM
This report reflects the recent trend in small enterprise development thinking to stress the importance of the relationships between enterprises as well as the internal development of the enterprise itself. This has led this report to consider two major elements of such relationships: business linkages and informal sector associations.
Business linkages come in many forms but have in common the ability, where functioning correctly, to enhance individual enterprise competitiveness and efficiency. This can occur through the sharing of resources, information and custom across enterprises of the same size. Equally, it can be through mechanisms such as sub-contracting that bring together enterprises of differing sizes. The growing understanding of the importance of such relationships has led to a focus on how they can best be supported. This report argues that a crucial element not yet emphasised in this approach is the role of learning in business linkages.
The report also notes the role that informal sector associations are playing in strengthening inter-firm relationships and providing services to their members. Whilst many such associations are still weak, their role in the SME sector is becoming increasingly acknowledged. They may well have considerable potential to coordinate competitive responses to new economic, political and technological challenges and have already become involved in some cases in the development of training programmes to this end. However, it is important to note the fragility of such associations and the need for extreme caution in intervention.
5.5. POLICY SUPPORT FOR SME DEVELOPMENT
In all three project countries, there is considerable lining up of national small enterprise development policies (whether currently in draft or final form) with "international best practice". However, there are concerns about the fit of these policies to national circumstances and aspirations. Moreover, the world of policy makers remains far from that of SMEs and communication and understanding between them is still inadequate. One of the most crucial challenges for policy lies in better stakeholder consultation. If this is achieved, then problems of implementation are also likely to be reduced.
Policies have done much in recent years to address the lack of an enabling environment for SMEs. More enterprise-friendly legal frameworks are developing in each of the project countries. Policies for small enterprise development are becoming better integrated with economic development policies more generally. Major strides have also been made in widening access to credit. Each of these areas will continue to require attention. However, globalisation challenges highlight the need to focus policy more squarely on the promotion of competitiveness. This report has argued that the core of such a focus should include a consideration of how learning can contribute to enterprise competitiveness and growth.
5.6. EDUCATION FOR COMPETITIVENESS
This report has revisited the literature on education's contribution to economic performance. It concludes that education is an important factor in enterprise success, but is not a sufficient condition for such success. There is not enough evidence to justify the assumption that a basic education alone will have a significant impact on individual productivity and enterprise performance. Rather, it seems that higher levels of education will often be necessary and that market conditions will need to be such that educational impacts can accrue to enterprises.
This conclusion leads us to argue that the international commitment to universal primary education (UPE) by 2015 should be better articulated with considerations about the nature of the education provided and its likely use. Where the provision on offer is perceived by parents, students and employers to be delivering improved quality at affordable cost, then it is likely that downward pressures on enrolments can be reversed. At the heart of the quality debate must be a consideration of relevance.
We suggest that education providers' ability to deliver a curriculum for competitiveness is a major element of the UPE challenge, and is the major educational response required to globalisation. Whilst the current resources and performance of African education systems are poor and the focus of UPE primarily has concentrated on enrolment, it is imperative that the curricular debate be continued.
A learning-led competitiveness perspective suggests that a lean curriculum, based around a handful of core subjects, may not be the most appropriate response to the majority of African countries' educational challenges. Whilst this approach seems to allow the most concentrated focus on quality and efficiency, such a narrow curricular focus threatens these countries' prospects for economic competitiveness. Literacy and numeracy will necessarily form part of education's contribution to individual, enterprise and national development. However, education provision needs to build a stronger focus on the other essential elements of knowledge and skills for development and international competitiveness in the context of globalisation.
Such a broader curricular vision has the potential to be an important element of national strategies for both economic development and poverty alleviation. It points to the importance of looking beyond basic education in order to consider the appropriate modalities through which individuals can access an expanded notion of basic learning needs for competitiveness.
5.7. TRAINING AS A RESPONSE TO GLOBALISATION
As with education, training's importance is heightened by globalisation. Globalisation places greater pressure on economies and enterprises to become competitive, and higher levels of skill are seen as being at the core of the necessary response. The imperative towards competitiveness also affects individuals who are expected to become better skilled in order to contribute to the competitiveness drive. The downside of this is that those who lack access to upskilling opportunities are increasingly unlikely to be able to develop sustainable livelihoods based on either wage or self-employment. Thus, lack of skill becomes an important characteristic of poverty. In the light of this, and the highly differentiated nature of access to opportunities for skills development, it is striking that training is absent from the current model of poverty eradication.
Pressure towards international competitiveness and the imperative of poverty eradication have given self-employment a far higher visibility in planning circles in the last decade. This has been reflected in considerable policy attention to training for self-employment, and a wide range of projects directed at this end. From all three project countries, there are examples of new policies and innovative institutional practice and improved outcomes of provision. Nonetheless, the research carried out by the project team suggests that there is still insufficient responsiveness of institutional programmes to demand. Selection of trainees and a focus on labour market outcomes are equally inadequate. In large part, this stems from inadequate consideration at the policy level of issues surrounding training for self-employment, and in particular the relative merits of such training being provided before versus during self-employment.
Globalisation emphasises the importance of responsiveness in a number of ways. One element of this is an increased need for training providers to be able to respond to the needs of students and enterprises. The learning-led competitiveness perspective leads us to emphasise the challenge to providers to focus more sharply on how their training gives their clients a competitive edge. In light of earlier comments about inter-firm cooperation, it is worth considering how training providers can follow the lead of small enterprise development and shift their own focus to better reflect the possibilities to support business linkages. However, responsiveness seems to be undermined in too many cases by funding mechanisms and bureaucratic regulations that encourage inflexibility and non-reactive provision.
5.8. SKILLS DEVELOPMENT WITHIN SMALL AND MICRO ENTERPRISES
The report concurs with the argument that Africa's indigenous apprenticeship systems have been highly successful sources of skills transfer, where they occur. However, the focus on globalisation and competitiveness requires questions to be raised about the ability of such systems to develop the appropriate skills to access new, high value niches and respond to important technological changes. The report also notes the negative effect that adverse economic conditions can have on skills transfer and technological progress within the SME sector. Nonetheless, there is also evidence that certain niches are being developed where the technological frontier is being advanced.
Although there are grounds for caution regarding the ability of indigenous training systems to respond to globalisation, it cannot be assumed that planned interventions in the system are the answer. The evidence for many such interventions to date has been poor. Among the main strengths of the indigenous system are its degree of self-reliance and its ability to self-replicate. At the heart of the difficulties with interventions is their sustainability. Moreover, they can threaten the self-replication of the existing, indigenous system, particularly when they flood the system with donor funds. Nonetheless, there may be a case for continuing to pursue the possibilities of interventions given the existence of concerns about the indigenous systems. It may be that the best chance for success lies in interventions that reflect the expressed needs of masters and apprentices; include informal sector associations (perhaps in conjunction with local chambers of commerce and industry) in a wide range of activities; and combine modest external funding with a realistic strategy for financial sustainability. These suggest even greater difficulties in developing synthetic versions of indigenous apprenticeship in countries where it is absent.
5.9. SKILLS TRANSFER FROM LARGER ENTERPRISES
There appears to be a mixed picture concerning the transfer of skills and personnel from larger to smaller firms. It has been suggested that this process is in decline and that the large scale retrenchments from public service across Africa have not had the anticipated effect on small enterprise development. Nonetheless, there is evidence, most strongly from Kenya, that the transition of workers from larger to smaller firms and from wage to self-employment is continuing. Where this emerges from a purposeful move to take advantage of perceived market opportunities, then it appears to be an important source of learning-led competitiveness for the SME sector. Evidence about the pathways to self-employment of successful entrepreneurs continues to suggest a high road from school to training (often a mixture of formal and informal, crossing enterprise- and institutional- based modalities) and thence to wage employment, before ending in sustainable self-employment. Such a road is a long one, making interventions difficult. It is also a route on which major barriers prevent many from beginning the different stages of the journey. As such, it cannot be the primary route to skills and technological development for small and micro enterprises. It may also be time to consider that straddling between wage and self employment is for many not simply a transitional phase but a core livelihood strategy for both profit and subsistence. Policies and programmes that take explicit account of this current reality may well have a greater chance of success.
5.10. THE CONNECTEDNESS OF THE CHALLENGE
Although we have looked sequentially at enterprises, education and training in this report, it has been our contention throughout that they are in fact interconnected. Moreover, they cannot be seen in isolation from broader issues of development. These insights are at the heart of the notion of learning-led competitiveness. There are signs in all three project countries, and amongst the international agencies who are their partners, of a greater concern about the connectedness of policies and programmes. However, it is clear that this is an area where commitments, as yet, outstrip actions. The challenge of human and institutional development that can facilitate trans-sectoral analysis and action appears to be a crucial one for national and international agencies.
