SME CONSORTIUM

Objective

The SME Training Consortiums program aimed to combat unemployment and improve the productivity of SME workers by helping groups of SMEs organize themselves to launch and manage in-service training of their workers. Each consortium formed an operating committee to manage its training tasks. The operating committee was composed of representatives of training consortium member enterprises, the local chamber of commerce, the Ministry of Labor field office, and training experts, and met periodically for the planning and management of the consortium member enterprises’ training affairs. The project provided each consortium with two training specialists financed by a levy grant fund (one of three employment insurance funds) to relieve the organizational, informational, and financial constraints that SMEs face in developing their human resources. Individually, each SME could not afford to recruit its own training specialist (Lee 2006).

Description

The Ministry of Labor opted to launch the pilot SME in-service training consortium project. However, the project implementation was entrusted to the Korea Chamber of Commerce and Industry (KCCI). The pilot project was launched in June 2001 and completed in December 2002. The Ministry of Labor and the KCCI selected three industrial cities for the project—Busan, Incheon, and Kwangjoo—and the ministry’s field office and the local chamber of the KCCI in these cities were instrumental in the implementation of the project.

Each local KCCI chamber helped a group of 30–50 SMEs in the same area and industry to organize themselves into a training consortium, and also financed two training managers for each consortium. The two training managers played a key role: they were to act as the training specialists for the member SMEs. “They were to establish an information network among consortium members (e.g., home page, email systems, and periodic meetings); conduct a training-needs survey of each member SME through interviews with managers and workers, and through job analysis; plan and program training activities of member SMEs; contract outside training institutions to train workers collectively as much as possible; collaborate with training institutions to develop training programs and materials; monitor their training activities; and conduct an evaluation study upon completion of major training courses on behalf of the member SMEs” (Lee 2006).

IMPACTS

This evaluation of the achievements and impacts of the pilot project focuses on (i) the organization and operation of the training consortium; (ii) participation in in-service training; (iii) training levy rebates to SMEs; and (iv) other outcomes (such as promotion of SME productivity, prevention of unemployment, shift to a demand-driven training system, enhanced competition and cooperation in training markets, and strengthened partnership between public and private entities in training affairs). 

Upon mainstreaming of the program in 2003, the number of SME training consortiums multiplied every year. Today, together with training programs for unemployed workers, the Training Consortium Program for workers employed by SMEs is the bellwether program of the Ministry of Labor in the Republic of Korea. In 2011, the Training Consortium Program trained 229,000 workers from 112,750 SMEs with the training levy rebates of 98.7 billion won.