Firm Size and Skill Formation Processes: an Emerging Debate

Recent research has established that small firms tend to develop and acquire the skills they need in different ways to those employed by larger organisations. More specifically, due to certain characteristics inherent to their small size, small firms generally display greater informality in their learning processes. As such, it is now broadly accepted that they cannot normally be expected to learn in the highly formalised and structured ways more often pursued by their larger counterparts. However, this enlightened perspective has, in certain parts of the literature, arguably led to a neglect of formal training as a means of developing skills. Small firms can and do benefit from formal training – some more than others – but this is at risk of being ignored. Based on a critical review of the relevant research, the paper aims to bring a measure of clarity and structure to this emerging debate. In doing so, it draws on the concept of ‘learning architecture’ (Jenlink 1994) to illuminate the connection between firm size and learning processes.