Comparative institutional disadvantage: Small firms and vocational training in the British manufacturing sector in comparative perspective

Abstract

This article asks why British manufacturing small and medium-sized enterprises (SMEs) struggle to meet their intermediate technical skills needs. While the comparative political economy literature typically attributes the failure to train in Britain to collective action problems, we complement this perspective by pointing at the ill-conceived policy design of the quasi-market for vocational education and training. In particular, we shed light on the role of training providers, as they respond to the incentive structure of the quasi-market, especially the output-based nature of standards and the system of funding distribution. To strengthen our argument, we compare the British case with the Italian statist system, which enables SMEs to access technical skills through school-based vocational education, and with the German collective system, in which SMEs develop skills through apprenticeships.