Skills Training by SMEs

This chapter contributes to the review of the trajectory of government policies for training by SMEs. It is a fact that government policies aimed at promoting SMEs development role have evolved over time. In view of the fact that the socially optimal quantity of skills training is larger than the market-determined equilibrium quantity of training, governments are justified to increase the quantity of skills training by subsidising SMEs. In this programme, the Government of South Korea encourages geographically determined groups of SMEs and industry to organise a training consortium and provides it with financial support to hire training managers. These training managers provide consortium member SMEs with technical and institutional assistance to undertake voluntary occupational skills training. In contrast, those member SMEs that did not participate in consortium training programmes suffered a reduction in the total employment level by 8.8% (436 persons), aggravating the unemployment level of their workers.