We used the number of employees to account for the effect of differences in the size of the firm.
Knowledge-Intensive Work. The Academy of Management Journal, 47 (6), 928-937 Damanpour, F. 1996.
or a new organizational method in business practices, workplace organization or external relations†(OECD, 2005.
contribution of SMES to job creation and value added constitute a large share of both EU and Romanian economy
million people providing for 66,5%of jobs from the total employment and contribute more than half of the total
the †80s in many types of industries, this growth in number and importance combined with employment problem
and job creation by SMES issues generated an interest in the study of entrepreneurship (Wennekers & Thurik, 1999
of the economy and a decrease in unemployment (Koellinger & Thurik 2012) so a more analytic approach toward
ensuring an important part of employment and innovation Acs and Audretsch, 1990 Early theories regarded the small enterprises as being â€oeoutside of the domain of innovative activity and
than half of the Romanian SMES work to improve their products and services 3. 3 Main approaches to innovation for Romanian SMES
Least mentioned was the lack of adequate human resources (8. 49%)(see figure 3 3. 5 Use of IT in SMES
Lack of adequate human resources 517 Nelu Eugen Popescu/Procedia Economics and Finance 16 (2014) 512 †520
for economic growth, job creation and innovation can come from SMES (Wennekers & Thurik, 1999) so ensuring a
This work was supported by the strategic grant POSDRU/159/1. 5/S/133255, Project ID 133255 (2014), co
-financed by the European Social Fund within the Sectorial Operational Program Human resources Development 2007 †2013
EMPLOYMENT DEVELOPMENT (LEED) OF THE ORGANISATION FOR ECONOMIC CO-OPERATION AND DEVELOPMENT (OECD Marco Marchese, Jonathan Potter
A review by the Local Economic and Employment Development (LEED) of the Organisation for Economic Co-operation and Development (OECD
been undertaken by the Local Economic and Employment Development (LEED) Programme of the Organisation for Economic Co-operation and Development (OECD) in collaboration with Red de
and comments of RETA€ s management and staff. In particular, special thanks go to Mr. Felipe Romera, Ms. Lourdes Cruz, Mr. Daniel Gonzalez-Bootello
the Investment Promotion Agency (EXTENDA; the Andalusia Institute of Technology (IAT; the Andalusia Technological Corporation (CTA;
team consisted of the following experts: Prof. Jaime del Castillo, University of the Basque Country
Human capital and the labour market, by Karen Chapple and Sergio Montero -Muã oz ï Chapter III:
Human capital and the labour market...6 Contribution of research organisations...7 Entrepreneurship...9 SME development...
HUMAN CAPITAL AND THE LABOUR MARKET...32 Introduction...32 Policy issues...32 Assessment of the region...
Human capital and labour market...128 Contribution of research organisations...128 Entrepreneurship and start-ups...130 SME development...
The OECD Local Economic and Employment Development Programme (LEED) has undertaken a review on entrepreneurship, SMES and local development in Andalusia, Spain, working in
The study was carried out by an international review panel consisting of 6 international experts and 2 members of the Secretariat of the OECD LEED Programme.
i) the impact of human capital and the labour market on entrepreneurship and SME development; ii
Human capital and the labour market The Andalusia labour market is affected by structural weaknesses High levels of unemployment, large numbers of temporary workers and low productivity
undermine the performance of Andalusia†s labour market. Although the overreliance of the region on the construction industry and the subsequent housing bubble has contributed clearly to these problems
even the sectors that employ highly educated workers are affected by structural problems Regional human capital needs to be upgraded
Despite the recent catch up effect driven by higher levels of business activity (e g. in the agriculture, construction and tourism sectors) and increasing levels of GDP per capita (now 80%of the
EU average), the quality of human capital has improved not proportionally. The region has actually experienced a reduction in post-compulsory school and university attendance,
to work for at least four years. By 2009 the program had funded about 500 young Andalusians and
Attendance of vocational training is on the rise In Andalusia a total of nearly 95 000 students attend vocational training, less than half the
number that attend public universities. The II Andalusia Plan for Vocational training, currently being prepared by the Ministry of Education, seeks to adapt vocational training to the new economy and new
demand of jobs and occupations. This will involve expanding online training; cooperating more closely with businesses, unions and others through advisory councils;
teaching more foreign languages; and creating at least one vocational centre of excellence in each of the eight Andalusia
Vocational training has been very successful in the last decade in placing students in a job. That has resulted in an increased number of students during
programmes that makes it difficult for businesses to obtain appropriately trained labour and, most pertinent for innovation, develop the pipeline of highly skilled workers that help transmit knowledge
in regional clusters. This schism manifests itself in three ways: a poor connection between the regional
with entrepreneurship, education, and employment; and the lack of a workforce strategy tied to business cluster strategies
but they lack sufficient and adequate staff Support for university research is provided through a range of institutions,
However, the function of OTRIS is hampered by limited staff to keep sufficient contact with local
to an intermediate profile between academic and administrative staff that does not do research, but
These staff limitations make it difficult for OTRIS to work with small firms and prompt them to focus their efforts on working with more
R&d-intensive firms. This is an issue that needs to be addressed in the future to improve the relationships of universities with SMES in the region
determining how benefits should be shared in the course of contractual work National regulations have imposed also restrictions on the mobility of university researchers
University staff are prevented from holding more than a 10 per cent interest in private companies, from being a member of a board of directors, or
taking a temporary leave from the university to form a private company. The act governing
view to creating knowledge ecosystems that support local development, employment and social cohesion. Two projects from Andalusia †one jointly presented by the University of Seville and the
researchers, skilled workers, etc. and investment (national and foreign Entrepreneurship Entrepreneurial culture is improving in the region
the natural route to the labour market, the sharp economic downturn in Andalusia may stimulate a greater willingness to embrace self employment and other forms of entrepreneurship.
This is clearly something to build on in the region via a greater focus on developing a culture of entrepreneurship at
innovation, and employment. In the future Andalusia is likely to lose its Objective 1 status and, in consequence, the level of EU structural funds will decline markedly beyond 2014.
employees. This places it well below both the Spanish and the EU averages. Of even greater
-sized firms between 50 and 500 employees demonstrates an underlying structural problem in growing local enterprises to a level that can contribute more significantly to employment creation and regional
growth Business internationalisation is at an incipient stage but on the rise It is estimated that only 1. 4%of Andalusian firms are involved in export markets,
The employment impact is certainly significant in a region that had hitherto been lagging in terms of new technology sectors;
The past work of RETA should be capitalised on for the future development of the region in at
ii) the work of ICT literacy of SMES; iii) the survey of the innovative needs of local small firms.
and for a stronger sectoral flavour to their work. Secondly, through the NOVAPYME programme RETA has introduced small and peripheral firms to the use of simple ICT solutions (e g. electronic
) This work could be followed up by ICT-specialised organisations that could assist small firms in introducing more complex solutions such as e-commerce.
Human capital and labour market ï Link training programmes more effectively with sectors in order to improve firm productivity and
ï Work across the silos of business and employment agencies by connecting business incentives with job creation in strategic sectors
ï Refocus entrepreneurship education along the models of the best business schools, trying to attract immigrants and to exploit the advantage of Andalusia†s geographical location
ï Establish cooperative education programmes engaging university students in alternating work terms with study terms throughout their undergraduate degrees
through self employment programmes ï Setup a business incubation monitoring and evaluation system that assesses the performance of
ï Look increasingly at workforce development and skills upgrading as channels for the promotion of
geographical parts of a country achieve similar levels of employment, skills development, business formation, economic growth and infrastructure development.
badly with sharp drops in both gross domestic product (GDP) and employment Andalusia†s European economic identity mirrored that of Spain just before the economic crisis as
accounting also for large numbers of self-employed workers in the construction and tourism industries In part it also suggests a degree of buoyancy in the construction sector
problem in the labour market. Temporary, low skilled jobs cannot find shelter in the storms of
SMES and Local Development has been carried by the OECD Local Economic and Employment Development (LEED) Programme in partnership with the Andalusian Technology Network (Red de
Human Capital and the Labour market It is recognised now well that the set of technical, cognitive, facilitative and operational skills
labour market and more generally in the development of an economy. This fact has acquired a particular poignancy in recent times in our so-called knowledge economy where †brain power†and the
manual, semiskilled and technically skilled labour The higher the level of human capital the greater is the return for both the firm (in terms of
the Labour Market Research and Development Institutions Framework and Governance Start -Ups/New Firm Formation
dependent on the skills levels of its employees and its owner-managers. A combination of the two
there are four labour market-related factors most critical to entrepreneurship in all its forms:(1) higher education;(
extensive work experience;(3) interaction with a variety of actors in the regional innovation system
forms of sustainable job creation Methodology This report provides advice from an international perspective on how to strengthen SME and
i) human capital and labour market issues affecting entrepreneurship and SME development ii) the contribution of research organisations to entrepreneurship and SME development;
The OECD Secretariat led an international panel of experts in a one-week peer review visit in
i) human capital and the labour market; ii) contribution of research organisations; iii entrepreneurship and new start ups;
A final chapter summarises main conclusions and policy messages on entrepreneurship promotion and SME development for the region of Andalusia
Secondary education as%of labour force (2008) 20.7 16.8 Tertiary education as%of labour force (2008) 29.8 24.9 High-tech manufacturing as a%of employment (2008) 4. 8 2
Knowledge-intensive services as%of employment (2008) 28.9 26.9 Active population (thousands)( 2008) 31 143 5 562
Labour market participation rate (2008) 73.4 68.9 Employment rate (2008) 65.1 56.6 Unemployment rate (2008) 11.3 17.8
Youth unemployment rate (2007) 18.1 23.3 Source: OECD Regional Database The socioeconomic context Andalusia is the southernmost region of peninsular Spain
and has lagged traditionally behind the rest of the country by most economic variables. The table above shows that Andalusia†s GDP per
capita is only 77%of the national one and generally depicts a scenario of lower than average
performance in R&d and innovation, education, and employment. Nevertheless, thanks also to generous support from the EU Structural Funds, the performance of Andalusia in most of these
indicators has been improving over the last decade; the 2008 crisis has imposed a halt to such general
mainly low-skilled workers. This has come to reinforce labour intensive sectors such as tourism construction, and partly agriculture.
Fig. 1 illustrates population growth during the last eleven years and shows how the immigration process has interested mainly the coastal areas (darker in the map
influx of low-skilled migrant workers, but also a consequence of the growth of low added-value
Labour utilisation and labour productivity The recent economic crisis has struck Spain severely, and Andalusia has been no exception
Whilst between 1997 and 2007 regional employment had increased at an annual rate of 6. 6%,higher
since 2008 the labour market situation has deteriorated strongly, with unemployment rising from 11%to 27.2%in early 2010(+16.2%)compared to+12.7%for Spain as a
whole. The rapid soaring of unemployment has been the result of the industrial and labour market structures of the region.
On the one hand construction, which had been one of the main sectors driving the economy in the booming period, has also been one of those hit hardest by the recession,
new employment contracts over the last decade had been fixed of-term nature, many of which have been discontinued once the crisis has reached Andalusia.
Arguably, large regional unemployment also conceals a remarkable share of labour informality, which negatively impacts on labour productivity
Andalusia is ranked 14 th amongst the 17 Spanish regions (i e. Autonomous Communities) with regard to labour productivity.
This is the outcome of the local industry structure but also of low levels of formal tertiary education (see Table 1). Low labour productivity has also a dent on regional GDP per
capita, which we have seen being much lower than the national value. According to estimates by Reig
2010), differences in labour productivity accounted for 83%of spatial variation in GDP per capita in
Micro firms (less than 10 employees) dominate the economy, representing over 90%of the total. This
1. Employment in the Andalusia construction sector decreased in 2008 on annual basis by 13.6%,as
At present the regional government is geared mainly towards the promotion of the sectors listed below. Whilst some are new to the regional economic landscape,
workers employed The R&d system Andalusia underperforms Spain as whole in most R&d-related indicators.
for employees were also relatively common, involving between 15%-25%of the surveyed enterprises Between 5%-15%of the firms contracted R&d projects, use university facilities or exchanged staff
whilst only less than 5%licensed patents or undertook joint start-ups with university staff (Fernandez -Esquinas et al.
2008 Three main conclusions can be entailed from these results. Firstly, a large number, indeed the majority of innovation-oriented firms †i e. firms that had received some public support to introduce
Innovation, fall some of the main regional organisations committed to the promotion of economic development, among which the regional development agency IDEA, the trade promotion agency
EXTENDA, the entrepreneurship agency ANDALUCIA EMPRENDE, the R&d-oriented CTA Corporaciã n Tecnolã gica de Andalucã a) and RETA (Red de Espacios Tecnologicos de Andalucã a
promotion of business clusters in strategic sectors for the region; attraction of domestic and international investments;
Through its network of 21 promotion offices in 19 countries, it provides information, consulting training and funding for business internationalisation.
the restructuring of labour-intensive sectors such as shipbuilding, chemicals, metalworking, etc mainly with a view to preserving jobs and improving the competitiveness of large companies.
HUMAN CAPITAL AND THE LABOUR MARKET Introduction Human capital development and labour market dynamics play a key role in a knowledge-based
global economy. Yet, one of the greatest challenges in regional economic development is developing a coherent set of policies and programmes that link a region†s complex educational and training
particular focus on the labour market characteristics of successful regional innovation systems. It then outlines the complex landscape of education and training,
Though the system is hampered by many redundancies in training programmes, it also is experiencing gaps among different types of institutions,
A rich literature debates the role of human capital formation and labour market dynamics in fostering entrepreneurship and innovation.
particular focus on the role of education and labour policy in regional innovation. We first examine debates about human capital generally, then turning to the debates about labour market preparation for
entrepreneurship. A final section describes the Spanish context Role of human capital in the knowledge economy:
Higher levels of human capital create returns not only in terms of worker productivity but also of higher wages (Becker, 1965.
altered the labour market (Aoyama & Castells, 2002. In this new informational mode of development †the source of productivity lies in the technology of knowledge generation, information processing
expertise, resulting in rising demand for college-educated workers relative to their supply (Katz &
bid up for those workers who possess high levels of human capital while, due to falling demand
wages fall or stagnate for less educated workers. Yet, institutions also play a role: national policies
The technical qualifications of employees among other factors) even affect a company†s attitude toward innovation (Coronado, Acosta, &
Human capital that combines education and experience gives employees the adaptiveness so key to entrepreneurship (Wright, Hmieleski, Siegel and Ensley, 2007.
Work experience is important to innovation in part because a long career path brings broader
Increasingly, researchers interested in regional innovation have focused on the role of labour mobility, particularly transnational immigration patterns.
To wrap up, the four labour market-related factors most critical to entrepreneurship appear to be 1) higher education;
2) extensive work experience; 3) interaction with a variety of actors in the regional innovation system;
movement of students, researchers, faculty and staff within European universities. The Bologna Process is linked to the broader Lisbon Strategy,
The Spanish labour market differs somewhat from that of most European countries. Immigration to Spain from Latin american and EU15 countries has increased rapidly in the last decade.
a 1985 immigration law restricts the ability of immigrants to work, forcing them to obtain a job offer
before seeking work visas and residency permits. A 2005 opinion survey of the Spanish public found
significant opposition to loosening immigration laws for workers, particularly among less-skilled Spaniards (Martã nez i Coma and Duval-Hernã¡
unemployment benefits constitute a disproportionately large share of its social benefit package relative to the EU15 countries on average
Historically, Spanish labour market regulation has been notoriously rigid; the high costs of terminating employees are in part responsible for a shift towards temporary hiring contracts,
which are easier to end. As of June 2010, major labour market reform became provisionally effective; this will
reduce the cost of permanent contracts and increase that of temporary contracts. Employers will also
have more flexibility in reducing working hours (and salary) of employees. These reforms may force
Spanish labour market regulation to begin to converge with that of its northern European neighbours Although labour and immigration policies and programs come under the purview of the national
government, regions can still take action to attract immigrants by fostering a positive climate. For
instance, the regional government of Madrid produced a business plan supportive of immigrants called †New Madrileã os, Future Entrepreneurs†after they realized that one out of four applicants for
Local labour market conditions The Andalusian labour market contains several structural weaknesses that distinguish it from the
rest of the Spanish economy, namely: the high level of unemployment, large reliance on temporary
workers, and low productivity. Although the overreliance of the region on the construction industry †and the subsequent collapse of the housing bubble †clearly contributes to these factors, even the
sectors that employ highly educated workers are experiencing structural problems. Andalusia presents an example of †badly used human capitalâ€:
as the educational attainment of resident workers has increased, this is not employed appropriately enough to contribute significantly to economic growth
Cuadrado-Roura, 2010 At present, Andalusia is experiencing an unemployment rate above 26.5%(as compared to 18
Already by 2009, unemployment among young adults (16-24) was considerably higher (38), %and among those with just a high school diploma, the unemployment rate stood at 56
impermanence of much of the labour market: in 2007,45%of employed residents were in temporary jobs, 13.5%above the national average (Granados-Cabezas, 2010
last decade has seen students increasingly selecting traditional vocational training rather than university education (Junta de Andalucã a, 2009.
In addition, the changing demographic structure in the region has affected labour market dynamics. The regional workforce is aging,
from a region from which uneducated workers out-migrate to one which attracts immigrant workers to
work in unskilled occupations. The immigrant population has increased from less than 1%of the total population in the early 1990s (mostly British and German retirees) to 8. 8%in 2009, mostly Latin
Americans (32%),African (24%)and EU-15 (20), %but also Romanians and other Eastern European countries members of the EU (17%.
Ministry of Employment; and the Ministry of Economy, Innovation and Science In the mid 1980s, after education policies were transferred to Andalusia, the Regional Ministry of
technology transfer and the promotion of public-private partnerships between Andalusia public universities (dependent on the regional government) and companies.
and non-university education were separated in the Andalusia government, with vocational training and non-university education remaining in the Ministry of Education.
Finally, the Regional Ministry of Employment has a less visible role in the Andalusia system of
despite having responsibility for employment policies, skills training for unemployed and employed workers (Formacã on Profesional por el Empleo †FPL), entrepreneurship
education (partly), and integration of immigrant workers Figure 8. Regional Agencies involved in human capital development
Source: Personal elaboration based on the competencies of the three regional ministries as listed in www. juntadeandalucia. es
international universities, on the condition that they return to the region to work for four years.
Vocational training and apprenticeship programs The different systems of vocational training in Andalusia are as follows 5 Erasmus is the EU flagship higher education program enabling 200 000 European students to study in
a university from another member country each year ï Vocational training (Formaciã n Profesional or FP) serves young people as a professional
alternative to the Baccalaureate and university education. Managed by the Regional Ministry of Education, it includes skills training of one-two years for youth unable to graduate high
ï Vocational training for employment (Formaciã n Profesional para el Empleo or FPE) serves either dislocated or incumbent workers.
Initially conceived as an employment policy, it is now managed by the Regional Ministry of Employment in coordination with the Ministry of
Education. Unions also collaborate in the training of workers with the Ministry of Employment 6
Recently, the government has created a new institution to regulate vocational training in the region: the Andalusia Institute for Occupational Qualifications (Instituto Andaluz de Cualificaciones
Profesionales). ) The Institute will be in charge of integrating the different vocational training systems FP and FPE) based on a common system of occupational qualifications in collaboration with the
national government and unions In Andalusia, a total of 94 710 students attend vocational training †less than half the number that
attend the public universities. The II Andalusia Plan for Vocational training, currently being prepared by the Ministry of Education, seeks to adapt vocational training to the new economy and new demand
of jobs and occupations. This will involve expanding online training; cooperating more closely with businesses, unions and others through advisory councils;
teaching more foreign languages; and creating at least one vocational centre of excellence in each of the eight Andalusia provinces to
improve public support and connections with businesses Vocational training has been very successful in the last decade in placing students in a job.
That has resulted in an increased number of students during the 1990s and 2000s just as the number of
university students in Spain has been decreasing and number of dropouts increasing (Laurent, Periã¡Ã ez and Petit de Gabriel, 2010.
6. The two biggest unions in Andalusia (UGT and CCCO) offer vocational training and apprenticeships both autonomously and in coordination with the Regional Ministry of Employment.
They conduct sector-based training in sectors they identify as in need for training or with growth expectations (such
an initiative of the Regional Ministry of Employment to train more than 1 000 students, workers and
redundant workers of the aeronautic sector 7 Spanish Minister of Education discourse in the Congress on February 2010, available at
Vocational training will address several gaps in the system that can help link vocational training better to innovation and entrepreneurship †for instance, offering expanded on-line and foreign
the university offerings focus mostly on connecting high-tech workers and start-ups to entrepreneurship skills, a variety of other programs help traditional businesses and low-skilled workers
gain the capabilities they need to innovate more effectively. Below is a description of what some main
but it also targets students (in high school, vocational training schools and universities) and women. ANDALUCIA EMPRENDE has more than 200 business incubators
programs, and vocational training schools, teaching students how to create and manage cooperative firms. For the highest level of vocational training students, ANDALUCIA EMPRENDE offers a
business plan competition in which the winners spend three days training in the business incubators. In
vocational training schools and secondary schools. Their training is based on improving the skills of employed people (in collaboration with the Ministry of Education) and inspiring young people to
business education at vocational training centres; and 2) a university program promoting entrepreneurship, held at all public universities in Andalusia.
Yet, such disconnects may hinder communication, foster more redundancy, and prevent training programs from adopting appropriate curricula â€
that makes it difficult for businesses to obtain appropriately trained labour and, most pertinent for
innovation, develop the pipeline of highly skilled workers that help transmit knowledge in regional clusters. This schism manifests itself in three ways:
entrepreneurship, education, and employment; and the lack of a workforce strategy tied to †clusterâ€
While hiring Phd-level workers might be key for highly innovative companies in IT or biotechnology sectors, the reality is that most SMES in Andalusia are highly dependent on
or a new organizational method in business practices†workplace organization or external relations††takes place at these low-tech firms
Ministry of Economy, Innovation and Science, there is only one vocational training diploma in Andalusia included under the Energy and Water professional family.
workers trained in energy efficient technologies. Bolstering the production chain of the cluster via training strategies will allow the expansion of the local market for these services and products †a
Employment Second, as noted above, the regional ministries have undergone multiple reorganizations in the past decade, with the Ministry of Science and Innovation taking responsibility for universities away
The Ministry of Employment remains separate. This new configuration clearly reflects and structures how regional actors think about labour markets, innovation,
and training in the region. The regional innovation system separates itself from the general education and employment
systems, suggesting that the official view of innovation is exclusively about R&d. It is not clear how
instance of vocational training and industry clusters. In fact, many agencies in other parts of the world
development that tailors training to employer needs in specific industry sectors (Zandniapour and Conway, 2003;
which taught SME executives how to develop innovative ideas for their businesses Digital Cluster Program:
schools as well as a network of 250 consultants. The main IT solutions offered were antivirus (to 29%of clients
Despite the challenges †the redundancy in overall education and training system, the lack of
Vocational training, which will link training better to the new economy, also presents an opportunity for RETA to provide input
The university system is committed to support labour policy, technology, and entrepreneurship. While most effort of the regional government to promote entrepreneurship and
In the area of human capital and the labour market, the most important contribution RETA can
helping to link vocational training to the many other efforts. In addition it might join forces with FUNDACION EMPRENDE, already the leader in regional entrepreneurship training, to promote
restructuring employment practices in a way beneficial to both employers and low-skilled workers Marano and Tarr, 2004.
Connect business incentives with job creation Work across the silos of business and employment agencies by connecting business incentives
with job creation in strategic sectors. Fostering entrepreneurship alone does not guarantee that Andalusia can capture the benefits for its distressed labour market.
During economic crisis, it is particularly important to stimulate business to create more jobs. RETA might help the regional
government identify examples of programs from other countries (such as the East Bay Green Corridor Partnership described below) that link incentives to job creation,
and then help businesses participate in the program, particularly in the technology parks. Again, given its role as innovation system
disadvantaged people access employment opportunities, while economic development programmes must help businesses become more competitive and expand, often through productivity increases that
will require high-skilled workers. Training workers can take months or years, while firms need quick
and flexible access to labour to compete in the global market Despite these issues, regions are seeking to link workforce development to economic
development more systematically, in part to create jobs in a stagnant economy. In the U s.,cities and
wages and advancement potential for workers, but also try to change internal labor market practices such as management and mentoring in order to make workers more productive (Giloth 2000
Because they focus on a single sector, these types of programs offer economies of scale and scope They organize groups of firms that require similar worker skill sets,
obtaining economies of scale by working across a variety of different firms in one industry. Additional synergies come from bringing
employers together to share concerns and best practices, as well as help design appropriate curricula When employers are involved directly in programs,
curricula focus on the most appropriate skills trainees become more familiar with workplace practices, and the intermediary may act as an
employment broker, introducing workers to prospective employers. An impressive set of evaluations has shown that these initiatives have significant and positive impacts on the employability, wages, and
upward mobility of their participants (Chapple, 2005; Elliott et al. 2001; Zandniapour and Conway 2003). ) These initiatives are seen as demand-responsive, i e.,
many different green workforce development initiatives, raising awareness of redundancies and potential synergies The new market demand for energy efficiency will foster job creation in different ways.
First initial energy audits and the simplest home improvements are performed by disadvantaged youth from the eight cities trained at the Rising Sun Youth Center.
advanced work receive incentives if they hire locally. Ideally, they will be able to train and hire
combination of spinoff firms from local corporate parents and technology staff mobility (Dahlstrand 1999 The Gothenburg model of entrepreneurship training is based an action entrepreneurship
Andalusia, there is also much redundancy. The Gothenburg model provides a useful model for a region that has struggled to launch entrepreneurship programs at the universities.
multilingual websites that work in different national contexts. However, only a few localization training programs exist, leading to a human capital deficit in this area.
Employment and Occupational Structures of G-7 Countries. International Labour Review 141,1-2: 123-159
Bates, T. 1990. Entrepreneur Human Capital Inputs and Small Business Longevity. The Review of Economics and Statistics, 72,4: 551-559
Self employment Entry Across Groups. Journal of Business Venturing 10,143-156 Becker, G. 1965. Human Capital.
Employment Initiative. Philadelphia, PA: Public/Private Ventures Florida, R. 2002. The rise of the creative class:
and how it's transforming work, leisure, community and everyday life. New york, NY: Basic books Giloth, R. 2000.
of Sectoral Employment Development Programs. WASHINGTON DC: Aspen Institute CHAPTER III: THE CONTRIBUTION OF RESEARCH ORGANISATIONS
particular, research spin-offs and industry-university knowledge transfer (labour mobility, research collaborations, technology transfer agencies, university technology licensing programs, etc.
as well as to the †thickness†of the local labour market (Gertler and Vinodrai, 2005 ï Second,
promotion of an atmosphere of intellectual diversity that tolerates different approaches to the solution of technical problems;
The DUI mode of innovation builds upon the skills and knowledge of employees throughout the firm, not just its research department.
these disciplines and for the recruitment of highly trained personnel. The life sciences and biotechnology industries draw directly upon analytical knowledge bases
i) the promotion of the knowledge economy; ii) entrepreneurial development and innovation. Total expenditures on these two
focus of PAIDI is on technology transfer and the promotion of public-private partnerships between
adequate staff to maintain contact with local businesses, as well as by structural impediments in national policies governing patenting
benefits should be shared in the course of contractual work National regulations have imposed also traditionally restrictions on the mobility of university
professors on staff and 40 000 students. The university has 270 active research groups, which is the
work for one year and also offer additional support to the companies in the form of economic
as providing support services to facilitate work experience for its students in enterprises and the
medical research as well as training technicians for later work in hospitals. Citius has a number of joint
The Office for Technology Transfer has twelve people on staff with strong technical qualifications. The office has three divisions, one for technology commercialization, one to support
national regulations governing university employment which had been raised previously. Professors cannot leave the university and go to work for a start up company with any assurance that they will be
able to return from that employment to their university position A related problem that was identified concerns the issue of intellectual property rights (IPR.
The university has found that companies want to retain all the rights to intellectual property when they sign
The staff limitations of the technology transfer offices make it difficult for universities to work with small firms and,
as a consequence, they focus their efforts on working with the firms that engage in R&d.
amount of activity related to the training of human resources, both in terms of the specific training of personnel provided by the researchers for firms and internships of university researchers in private
had few employees with higher education degrees and few of them had R&d departments. Among the remaining 305 firms that
percent engaged in some form of consultancy relationship with university staff, 5 to 15 per cent of the
Consultancy work 21.8 Patent exploitation 4. 6 Joint ventures with Universities 3. 7 Commissioning of R&d
Use or renting of facilities 8. 1 Training of firm workers by the Universities 15.2 Other types of collaborative
organization in the region, such as CTA, the Employers association and even the universities, and provide complementary services that meet the needs of the tier of innovative SMES it is mandated to
consultancy arrangement works out to the firm†s satisfaction, studies indicate that they often move on to the next level of involvement with the university researcher or research team in terms of engaging in
the universities revealed that the universities themselves are much happier when RETA works with them to bring individual firms to the research office
sets in demand by the second tier of innovative companies that RETA works with. This could be rolled
usually involves engaging university students in alternating work study terms throughout the course of their undergraduate or first degrees.
from their work terms into the university classroom. This example is discussed in further detail in one
administrations in locating work placements for their students. In successful coop programs, this is usually accomplished through the provision of several dedicated university personnel to the task of
identify the firms that would be interested in providing work placements for students in a cooperative
employees. At the same time, Canada has relatively fewer large R&d performers than most other OECD countries and the total share of business expenditures on R&d from firms with more than 250
employees is significantly lower than the OECD average. As a corollary, the relative contribution of
administered by staff of the NRC, IRAP is in many respects a stand-alone program run by its own
student body) and 3 000 employers, 281 of them local, involved in the program each year.
that spun-off from the original WATCOM Corporation, with over 250 employees in its Waterloo
campus alone, 15 per cent of its current employees are Waterloo co-op students, and more than half of
evaluate their performance in the workplace before hiring them. The Co-op Program is attributed with †putting knowledge on the streetsâ€,
find firms willing to take the students on work placement Relevance to Andalusia The key lesson to be drawn from this experience is that the patient investment of resources in a
coop education initiative in finding the work placements for students For further information http://www. cecs. uwaterloo. ca/about
work that has recently been carried out on the future evolution of technology parks. However, it is
entrepreneurship in terms of its contribution to job creation and growth, competitiveness, unlocking individual potential and wider benefits to society as a whole
employment, innovation, economy, social cohesion, and environment. However, by 2005 it was apparent that the goal was overly ambitious.
Europe becomes a more attractive place to invest and work 1. Extend and deepen the internal market
8. Attract more people into employment and modernise social protection systems 9. Improve the adaptability of workers and enterprises,
and the flexibility of labour markets 10. Invest more in human capital through better education and skills
The recent global crisis has however called for another major rethink of the Lisbon Strategy. The
targets were set to boost growth and employment (EU, 2010 ï Raise the employment rate of the population aged 20†64 from 69%to at least 75
%ï Invest 3%of GDP in R&d by improving the conditions for R&d investment by private
in terms of growth, consolidation of the business framework, innovation, job creation, technological changes and increase in productivity.
The crisis has taken a toll on local employment. The unemployment rate has risen steeply to 27.2 percent compared with 20 percent in Spain as a whole.
The youth unemployment rate is much higher: while it is 43 percent in Spain, estimates indicate that 39 percent of the registered youth unemployed are located
which require employees to have completed a year of full employment before qualify. Many under-25s are unable to demonstrate 12 months†worth of
unbroken employment (The Leader, Andalusia Suffering Most from Unemployment, 21.11.2009. The above synopsis indicates that the rapid economic growth
and other gains experienced in recent decades, which have resulted in the region approaching national averages,
access to physical infrastructure, promotion of growth, government programmes, and commercial/services infrastructure ï Lowest scoring aspects:
anecdotal evidence, the impression is that young Andalusians continue to prefer the relative labour market security of the public sector. Nevertheless,
and the number of enterprises and employment has gone also up. At the same time, the analysis illustrates that the region has been hit severely by the crisis,
unemployment, notably youth unemployment, are being impacted severely. Moreover, the region has a relatively limited entrepreneurial where people enter public sector employment as their preference
That said, there is a certain degree of willingness to engage in future entrepreneurial activity and the
including self employment and start-ups, but this is likely to be hampered, to some extent, by the relatively low levels of human capital in the region.
need for broader support to entrepreneurship and job creation Institutions and policies for entrepreneurship Prior to assessing the challenges
ï Create and consolidate enterprises and employment through advice and support to firms business training,
employment, turnover, etc. the approach could be improved. Major constraints include legal barriers and a lack of incentives for academics to engage in entrepreneurial activity.
and youth unemployment, suggest a need for a wider focus on entrepreneurship, including education, vocational educational training, self employment, assistance to all forms of start-ups,
not only those connected with R&d&i ï Secondly, there is a clear divide between policy-making (the responsibility of the new
Firstly, the region must cope with the very high levels of unemployment (average of 27.2 %peaking at almost 32%in Cadiz in April 2010), particularly youth unemployment,
which has risen steeply in recent years. This is a trend that is not expected to be reversed in the short term.
levels of unemployment require the region to support all forms of entrepreneurship and start-ups in all
whether or not in employment, needs to be upgraded Despite the recent catch up effect driven by higher levels of business activity (e g. construction and
levels of youth unemployment, a slow down in the number of migrants, emigration by EU ex-pats, etc
about possible layoffs and responds by increasing savings at the expense of consumption. In this context, demand for local products and services is affected.
traditionally seen the public sector as the natural route to the labour market, the sharp economic downturn in Andalusia may stimulate a greater willingness to embrace self employment and other
forms of entrepreneurship. This is clearly something to build on in the region via a greater focus on
The high and rising levels of general and youth unemployment necessitate the harnessing of all ideas, talents, sectors, etc. for the future of the region
Moreover, the focus on entrepreneurship should not be restricted to future labour market entrants The region could promote the establishment of dedicated (re) training programmes for existing
business people (in employment and/or recently made unemployed), focusing on new business models and approaches, combining elements of local skills and strengths,
already in the labour market with the latest business concepts, tools and techniques. Dedicated re) training programmes could be established using existing institutions, such as university faculties
of people entering the unemployment register will require rapid retraining and start-up support to engage in new forms of activity.
Promote self employment to tackle unemployment and diversify the economy The rising levels of unemployment, the need to diversify the economy (e g. away from
construction, real estate, etc. combined with the population†s latent interest to establish a business GEM, 2006) call for a greater focus on providing opportunities for people to establish their own
businesses though self employment or creation of firms. Such an approach should not be driven solely by R&d&i considerations:
-employment is typically the simplest and quickest way to start a business. There is generally little
stimulation of self employment. It is unlikely that new institutions will be required (if anything institutional streamlining is needed.
take responsibility for a more targeted programme of support for self employment. However, this would require an evaluation of its current effectiveness in creating businesses,
or regional employment office in order to ensure that the social security system is aligned with the new regional priorities designed to facilitate a higher
the prospects of strengthening innovation and employment generation; they assist the general process of stimulating entrepreneurial activity and diversifying the regional economy.
employment and opportunity Rationale for the intervention Although the Andalusia region has recognised the importance of entrepreneurship and has
Their main role was to commission work from a range of different organisations to ensure the delivery
i) the very high and increasing levels of general and youth unemployment; ii) the levels of human capital relatively low compared with elsewhere in Spain;
Transiting from unemployment into self employment Description of the approach Germany has suffered from persistently high unemployment rate, as well as low self employment
rates. Consequently, a programme known as the †Start-up Subsidy†(SUS †Existenzgrã ndungszuschuss) was introduced in 2003 under
have received in unemployment benefits for a period of six months plus a lump sum to cover social
Germany had one of the lowest self employment rates in Europe (fluctuating between 10-11 percent) and yet experienced persistently high levels of unemployment (between 7-9 percent.
To overcome this constraint, the German government prioritised active labour market policies, including vocational educational training, employment subsidies, job creation schemes and self employment
schemes targeting the registered unemployed. The policy has been successful in terms of uptake whereas in 2002 3. 5 percent of the unemployed received the subsidy (37 000 start-ups), this increased
to 9 percent (250 000 start-ups) in 2004 (Baumgartner and Caliendo, 2007. Research leads to the
both the probability of being in self employment and/or paid employment and the personal income are
significantly higher for participants. †(Baumgartner and Caliendo, 2007, p. 26 Reasons for success Business experts must examine the start-up concept
and determine its viability. Such experts could include the Chambers of Industry and Commerce, Chambers of Crafts, Professional
Organisations, Expert Associations such as Business Development Service Providers and Financial Institutions. The new entrepreneurs also need to be given support both before the start-up phase
entrepreneurship training, business plan, etc. as well as after initiation of activities (coaching mentoring, consultancy, etc Relevance to Andalusia and considerations for adoption
unemployment is concerned, calls for a much greater emphasis on assisting the unemployed into self -employment through training, start-up grants, etc.
The emphasis should be on allowing the potential entrepreneurs to determine the market need and attempt to fill-it, regardless of sector or other policy
However, incubators are not a panacea for entrepreneurship and job creation. The experience of incubators in the EU has been mixed.
Number of management staff 2. 3 managers 1 †9 managers 2 managers min Ratio of incubator staff:
tenants 1: 14 1: 2 †1: 64 1: 10-1: 20 Percentage of managers†time advising clients 39%5%†80%50
ï Overall, business incubators are a very cost-effective instrument for the promotion of public policy
contribute to high-growth firms or the employment impact in terms of job creation), this suggests the necessity for an evaluation of the Andalusia incubator practice so far.
Baumgartner, H. J. and Caliendo, M. 2007) Turning Unemployment into Self employment Effectiveness and Efficiency of Two Start-up Programmes, DIW, Discussion Papers 671
SME development and growth is critical to fostering entrepreneurship, job creation and economic development in Andalusia as a result of the dominance of SMES in the regional economy.
employees (see table below. This places it well below both the Spanish and the EU averages (Romero
between 50 and 500 employees, demonstrates an underlying structural problem As policymakers within the region recognise, an imbalanced economic base and firm structure
enterprises to a level that can contribute more significantly to employment creation and regional growth. The imbalances in the regional economy were exacerbated further in the boom period from
particularly of capital and labour, from the more productive and internationally competitive sectors of the economy.
Self employed (no employees) 51.57 0. 38 1-9 employees 43.48-4. 3 Small firms (10-49) 4. 31-13.95
Medium sized firms (50-499) 0. 55-11.68 Large enterprises(+500) 0. 08-37.46 Total 100.00-2. 44
for existing SMES are the Andalusia Employers association (CEA), the main independent business association subdivided into territorial and sectoral associations,
The employment impact is certainly significant in a region that had hitherto been lagging in terms of new technology sectors;
although its strategy is to work with firms in particular sectors (e g. aeronautical biotechnology, renewable energy) which are important in terms of targeting rather than risking a lower
RETA€ s model of work, the broad objective of having †technology agentsâ€, providing †one-stop†shop
-launching this professional profile may want to widen the circle of advisers to include those with more
Like most other European regions Andalusia has developed a well external trade promotion agency which has been charged with enhancing the internationalisation of SMES.
vocational training programmes. Perhaps more could be done to understand the more immediate and routine needs of SMES for improving the productivity of the sector and developing information about markets and best
basic vocational training and technical support in areas such as product development, process innovation and marketing. With both of these kinds of initiative, decision-making should be devolved
The availability of alternative employment in the growing economies of the nearby cities of Florence, Siena and Pisa resulted in an outflow of the
farming population attracted by less arduous and more economically rewarding forms of employment By the early 1990s, modernisation efforts were judged to have failed with attempts to make the
forms of traditional skill and knowledge of products embodied in the workers and owners of SMES
The promotion of high quality, small-scale food production also coincided with a wider trend of more environmentally conscious and †slow-food†based consumption patterns.
dominated with over 2 000 independent producers in a labour intensive sector that has 3 000 direct
employees but around 25 000 indirect jobs in supporting and dependent industries (e g. auction and
associations and trade unions in what is referred sometimes to as the †negotiated economy†(Amin and
Maskell, 1998): 80 percent of workers are in trade unions while members of employer associations account for 55 percent of private sector employees (Anderson and Mailand, 2005.
High levels of knowledge exchange between SMES are underpinned by close-knit business communities in each sector. Denmark is characterised by a plethora of networks and strong industry associations
that involve lending material and equipment and even labour in some cases (Maskell 1998 Christensen, 2010
vocational training and apprenticeships; Danish firms spend 2. 1 percent of their wage bill on training
long term specialist apprenticeships †between 5 and 10 years †has continued through the 2000s despite increased competitive pressures on firms from foreign low cost competition (Christensen
) While most vocational trading is administered outwith the state, through collective agreement between the social partners, the Danish labour market model †often referred to as †Flexicurity††also
provides generous provision for vocational training and retraining both for those in work and the unemployed.
This allied to the generous unemployment benefits available as part of the system is also seen as important in encouraging entrepreneurial
and risk-taking behaviour (Anderson and Mailand 2005 Additionally, new firms tend to be established by skilled workers already with a background of
working within particular industries, rather than those with professional managerial experience or entrepreneurial motives from the outside,
European, Denmark†s employment remained relatively stable up until 2007 but with the economic downturn and collapse of global demand in many key markets, unemployment has climbed from 3. 6
percent to 5. 9 percent in 2009, forecast to rise above 7 percent in 2010.
although its †flexicurity†labour market model †whereby employers are given flexibility over the hiring and firing of labour
while employees are given generous social protection and rights to retraining †has been attributed as a major factor in the resilience of Danish SMES through past crises
Anderson and Mailand, 2005, Madsen, 2006 Relevance to Andalusia and considerations for adoption The Danish model is apposite for those Andalusia firms that we have identified as type 2 in the
autonomy from the state but involve the key stakeholders in different sectors (e g. businesses, labour
vocational training, information gathering and more practical forms of business support For further information http://ideas. repec. org/p/aal/abbswp/96-6. html
new firm formation and employment creation (Birch and Cumbers, 2009. The UK has one of the
have produced generations of well-trained graduates to service the life sciences labour market: indeed Scotland produces a proportionately larger number of graduates from its universities than other parts
recruitment to firms. The skills and experience such returnees bring to firms are invaluable when operating in the global economy.
Sciences Modern Apprenticeship scheme which provides subsidies for SMES to take on trainees Relevance to Andalusia and considerations for adoption
Employment Observatory, Working Paper, University of Aalborg Maskell, P. 1997 Learning in the village economy of Denmark.
employment rose at an annual rate of 6. 6%,as compared to only 4. 7%nationally between 1997 and 2007;
over the same time span, unemployment decreased at 4. 7%annually, halving the number of the unemployed from 442 000 to 212 000.
earmarked EUR 2. 38 billion (nearly one quarter of the total) for the promotion of the knowledge
i) human capital and labour market; ii) research organisations; iii) entrepreneurship and start-ups; iv) SME development.
unemployment has soared from 11%to 27.2%,only 3. 5%below the 1996 value preceding the †phenomenal decadeâ€
Human capital and labour market Three key issues have emerged in the area of human capital and labour market:
i) today†s knowledge-based economy put a premium on education; as a result, the regional government should
Conversely, unemployment among young adults (aged 16-24) with just a high school diploma stood at stunning 56%at the end of
based on the promotion of R&d and industry-university technology transfer, the regional government is missing the possible contribution of vocational education to innovation through a more qualified and
This is shown, for instance, by the fact that the ministry of employment is not actively involved in the design of regional innovation and entrepreneurship strategies,
responsible for vocational education, self employment programmes, and even for some entrepreneur training schemes. A by-product of this divide is that workforce development is aligned not as with
research contracts, collaborative research, training of human resources and supervision of graduates are also important modes of knowledge transfer that OTRIS should consider more than has done so far
of RETA€ s work. The collaboration between OTRI and RETA should not just focus on R&d-intensive
Entrepreneurship promotion is therefore rightly at the top of Andalusia†s concern, and one organisation in the regional institutional
%threshold, it would be important to capture the potential of self employment programmes for both reducing joblessness and increasing business activity rates;
self employment programmes. Self employment has the potential to alleviate unemployment, enhance the long-term income of participants,
and positively impact on their career prospects by improving employability. Currently, however, self employment programmes are in the remit of the regional
ministry of employment. As a result, co-ordination and co-operation between the ministry of
employment and the Ministry of Economy, Innovation and Science would be crucial in this domain This is all the more true
because the success of self employment schemes is highly dependent on the training of participants, who are often unfamiliar with business management practices
Incubators are one of the most favoured tools of business development promotion in Andalusia Only within the Malaga technology park (PTA) there are six of them.
Surprisingly, though, a regular evaluation mechanism of their performance has not yet been set up. At least in the PTA, which is the
area, but again the effects of the crisis might change the scenario and prompt more redundant workers
and employees to set up their own businesses. Here, the regional government could work closely with
enterprises (less than 10 employees) accounted for 95, %and small firms (10-50 employees) for 4. 3
%of the whole enterprise population, thus making up altogether over 99%of the total. The paucity of
medium-sized firms (50-250 employees) points to an excessive business fragmentation that undermines the competitiveness of the region.
instruments for the promotion of business modernisation, the underlying rationale being that clustering of technology-intensive firms enhances their growth and expansion.
focus has mainly been on export promotion, whereas foreign direct investment of local firms (e g
RETA€ s future will also depend on its ability to learn from its previous work. The experience of
Some of the work started by RETA could also be resumed and brought forward by other
This work could be followed up by ICT-specialised organisations assisting small firms to introduce more complex solutions such as e-commerce.
To summarise, the work done by RETA over the last years should be capitalised, if anything to
yet there is only one vocational training diploma in Andalusia included under the Energy and Water professional family.
benefit from skilled workers trained in energy efficient technologies. Identifying and implementing programmes across the production value chains should help identify opportunities for new products
and this is where careful planning of the work of intermediary agencies can be particularly useful
This is evinced in the increased recruitment of R&d personnel, the quality improvement of traditional products,
the problem of high levels of unemployment, especially youth unemployment in Andalusia Entrepreneurship works when new firms are formed,
when new skills are developed and deployed, and when new talent is able to work with new products and services.
However, harnessing talent among these communities for work in growing sectors could open up opportunities for new products and markets.
Human capital and labour market ï Link training programmes more effectively with sectors in order to improve firm productivity and
ï Work across the silos of business and employment agencies by connecting business incentives with job creation in strategic sectors
ï Refocus entrepreneurship education along the models of the best business schools, trying to attract immigrants and to exploit the advantage of Andalusia†s geographical location
ï Establish cooperative education programmes engaging university students in alternating work terms with study terms throughout their undergraduate degrees
through self employment programmes ï Setup a business incubation monitoring and evaluation system that assesses the performance of
ï Look increasingly at workforce development and skills upgrading as channels for the promotion of
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