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Lavoro presentato alla 9a Conferenza internazionale su Global Business and Economic Development, Seul, Corea, 25-28 Maggio 2005

HUMAN CAPITAL DEVELOPMENT IN A COMPLEX LEARNING SYSTEM:

THE VIRTUOUS INTERACTION BETWEEN INDIVIDUALS, ORGANIZATIONS AND COMMUNITIES

LUCIANO PILOTTI SILVIA RITA SEDITA

Working Paper n. 2005-17 SETTEMBRE 2005

Human Capital Development in a Complex Learning System:

the virtuous interaction between individuals, organizations and

communities*

Luciano Pilotti°, Silvia Rita Seditaºº

°Università di Milano; luciano.pilotti@unimi.it

ººUniversità di Padova ; silvia.sedita@unipd.it

Abstract

The aim of the paper is to find a framework for understanding dynamics of the learning process

at different levels, occurring through different forms of education. The purpose is to consider the

impact of formal, informal, non- formal learning on firms’ performance. For sure R&D expenses

and market are really important to foster innovation and drive firms towards better performances,

but they need to take place in a learning oriented environment.

Our target of analysis are micro and small firms learning processes, which we look at using

secondary data from different sources. The paper proceeds as follow. Firstly, the main aim of the

work and research questions are presented, secondly, we focus on the relationships between

human capital and innovation in SMEs. Thirdly, we illustrate what we mean for learning, paying

particular attention to the differences between education and learning. Fourthly, we propose our

interpretative framework, analysing in details its components.

Key words: knowledge, learning, education, human capital, SMEs, LPSs, ICTs.

JEL Codes: J24, I2, L00, D83.

* This paper has been presented at the “9th International Conference on Global Business and Economic Development”, Seoul, Korea, 25-28 May 2005; comments from participants are greatly acknowledged.

1 Introduction

The aim of this paper is to find a framework for understanding dynamics of the learning

process (changes in the stock of owned knowledge), at different levels (individuals, organization,

community), occurring through different forms of education. The purpose is to consider the

impact of formal, informal, non- formal learning, as they are defined in the 2001 Communication

from the Commission of the European Communities, on firms’ performance. For sure R&D

expenses and market are really important to foster innovation and drive firms towards better

performances, but not only. The wide spread of innovation by large scale of adoption and

redesign (best practices, meta-standard) in multiple context, in fact, is enormously relevant

overall in Europe, where systems of SMEs are dominant (20.415.000 SMEs vs. 40.000 large

firms in Europe1). It is in this environment that the virtuous paradox of European industrial

experiences takes place. We look at the innovation process as an ecological process [56], where

the focus is the relational ability of individuals and the high quality of human resources, building

a dynamic bridge between individual learning, organizational learning and network learning,

sustaining the creativity of individuals in general and human capital in the specific. Three main

categories determine an ecology system to build up a shared value between different actors:

a) internal/external interdependences (multidimensional identity – individual and

network)

b) compatibilities as standards sharing (communication);

c) connectivity (developing interactions towards the creation of a super- identity).

This multidimensional network of interdependences shape a peculiar ecosystem of both

actors and network interactions, able to foster competition and cooperation on the basis of their

specific competencies and inclinations towards a process of knowledge and value creation

[23][31]. From this perspective, we relay mainly on the work of Morin [41] [42], who defines an

ecosystem as a complex system of interactions characterized by two subsystems: an interactive

system and the environment.2 None of these subsystems plays a dominant role in the generation

of the ecosystem. The ecosystem is the dynamic and emergent outcome of the combinatorial

interaction between these two parts, that we could defines as a sort of genetic mechanism of

emergent ecology. A generative integration between systems - or system of systems - and

complex environment (materia l culture, traditions, habits and mental habits, intangibles or

specific coupling of tangibles and intangibles and so forth), building a flexible bridge between

local and global resources to enlarge learning capacities by varieties [3] [45] [23].

The paradigm of the knowledge economy (K-Economy) is definitely shifting to a new

paradigm: the learning economy (L-Economy) [35][22].The key factor of this new “Paradigm” is

the power of generating knowledge by knowledge. Inputs of productive process are technology

and knowledge, and outputs are technology and knowledge as well, deriving by learning capacity

of the agents of the value chain. New needs of innovative networks in a new industrial space

are:

a) connecting richness of learning organizations by interacting in evolutionary contexts

(through tacit knowledge sharing) and developing absorptive capacity as acquisition

of codified knowledge;

b) connecting networks of firms, new cores of infrastructure (ICT, ADSL, new media,

etc.), R&D institutions, High Education institutions (University, Business, School,

Middle School, etc. ).

c) connecting identity value of firms and identity value of network oriented to renew

and upgrade multiple levels of an identity core tree.

d) connecting private and public interests to the same channels for multiple values of

sustainable overall growth of non-scarce resources by creating meta-organizer .

We assume the innovation process as an ecology process where human resource needs are:

a) continuing education as long-life mobility intra-firms and inter-firms, intra-industry

and inter- industry up to trans-national education system for managers, technicians or

specialists, etc.

b) developing Innovation Support Organizations preferably oriented to SMEs network

for focalised filiere or industry, or Local Production Systems for new management

skills as “network manager” or “district manager”;

c) enlarged application of benchmarking methods for diffusing best practices (as

prospected for example in “European Trend Chart of Innovation” )

The paper addresses the crucial issue of the creation of new skills and the re- invention of

learning processes in Italian industrial districts or local production systems, through an emergent

intensification in the use and development of new customised information and communication

technology supporting new learning organization. This evolution implies the availability of

trained workers who can maximise the opportunity offered by new technologies as a basic

support to diffuse learning in action, to reinforce mobility, flexibility, adaptability and

innovation of knowledge local resources by coupling global ones.

2 From “knowledge economy” to “learning economy”

The paradigm of the knowledge economy (K-Economy) is definitely shifting to a new paradigm:

the learning economy (L-Economy) [22][35]. The competitive advantage of firms doesn’t reside

in the amount of owned “scarce” knowledge, but in their capability to learn. How do firms learn?

Do they learn through their employees? What is the relative impact of formal and informal

education on their learning capabilities? Is it a matter of cross- learning actions between

individuals and organizations? What are the principal types of learning? Those are the questions

that can be raised for facing competitive issues in a learning economy. Henceforward we will try

to provide some answers after giving some definitions and useful specifications.

Education is prevalently oriented to programmed knowledge meanwhile learning needs

both programmed and non-programmed knowledge (as we can define made by “structure and

semi-structure knowledge”), for facing the complexity of a not stable (internal/external)

organizational climate (see: environment). Learning presumes diffuse interactions and an

orientation to a system creativity of firms, where the engine is connecting human agents’ minds

through relationships of organizations, probably sustained by technology interfaces communities:

learning fuelling (micro/macro) ecosystem.

The process of interaction changes nature and structure of the environment, but structure

and nature of the environment themselves shape the structure and nature of the interaction: we

assist to a complex process of co-evolutive mechanism by interaction of the two semi-

autonomous levels of artificial life. The main resource of this interaction between two levels

(system and environment) is a communication normally media ted by technology as a distance

communication among both persons and systems creating a new social “virtual” space. We are

referring here to a space that differs from the traditional space of action or work, because agents

are not isolated but become active and creative parts of virtual communities. In a virtual

community emotions, tastes and preferences create glue to reproduce relationships within four

main leverages that operate towards an integrated ecology of value involving single and

networked systems:

a) instant relationships,

b) no sense of place or absence of space;

c) relevance of contents as emotional value;

d) competence passion as a sharing mission in a chain of learning games [23].

It is quiet well known that traditional teaching/learning approaches of highly structured

and polished lessons in pre-programmed classes suffer of flexibility shortage [39]. They are too

much stuck into fixed scheduling, offering a standardised form of education, which ofte n doesn’t

fit the real needs of individuals and firms (mostly SMEs). Education systems fail to foster self-

motivated learning, and the attitudes of openness, curiosity and responsibility needed to live and

prosper in a permanently changing world. As Shrivastava [56] underlines, carefully pre-

packaged knowledge resources (such as books, articles, case study analyses) sometimes become

obsolete even as they are under preparation. That is why new knowledge societies need ad hoc

education systems, where the past static classrooms have to be plugged into permanent and

continually updating knowledge instruments and networks. The classic hierarchical relation

between teacher and learner is moving towards the building of a knowledge ecosystem, which

can extend over the entire working life of the learner. The ambitious objective of a knowledge

ecosystem is to create and maintain strategic human resources, capable of enhancing the

competitive advantage of companies where they are employed, through different kinds of

knowledge applications (such as lifelong learning). In a static world, in fact, learning is not so

important, the accumulation of knowledge needed to perform reasonably well the tasks occurs

during the first ages of human life, through formal education. In an uncertain world, instead,

where changes are becoming day-by-day routine and the demand for flexibility is swelling, the

need to learn increases. Training is necessary throughout life. If theoretically this assumption can

meet an almost general agreement, practically it meets some difficulties, particularly in the case

of SMEs. The limited available time of managers and employees is a relevant obstacle to the

adoption of a lifelong learning point of view. New educational forms and channels are needed,

possibly involving distance learning and multimedia techniques [19], pushing the diffusion of

adult education, in an action learning prospective.

It appears as if Reg Revans [48] is the first to introduce the concept of action learning for

describing a type of learning that comes from concrete experience and critical reflection on it,

basically through group discussions that allow learning from each components experience3.

Particularly interesting is his “equation for learning” [49] that is: L = P + Q. Learning (L) occurs

through a combination of programmed knowledge (P) and the ability to ask insightful questions

(Q).

We can see at this type of learning as a three (at least) dimensions process, which

involves together different spheres of the worker life: individual, social and job-related one.

Considering the complexity of human interactions, we can speak about learning in action

as an overlapping layers learning system, where the single worker assumes a central position.

Learning and training authorities actually largely recognize this “learner centrality” point of

view, all over the world, as we can infer by reading several ILO (International Labour Office)

documents.

“The individual is becoming the architect and builder responsible for developing his or

her own skills, supported by public and enterprise investment in lifelong learning.“

With this exhaustive sentence the 2002 Report IV [27] of the ILO underlines the

emergent role of the learner in the emergent knowledge society. It is clear that the focus of

international policies is moving from traditional formal education to informal processes of

learning, where workers are been encouraged to be innovative and creative, where they learn to

learn, and not to absorb passively new knowledge. They become learning agents in dynamic

communities of learning.

Denmark, for example, is pioneering a learner centred approach to vocational education

and training by interaction. This attitude enforces the potentiality and the performances of its

enterprises [53]. In the Report IV4, in fact, it appears that Danish enterprises that introduced

process or production innovations combined with targeted training are more likely than non-

innovators to report output growth (11% vs. 4%), job growth (3% vs. 2%) and labour

productivity growth (10% vs. 4%). The difference existing between knowledge and learning is

not always clear, misunderstandings may occur. Following the definitions given by Gavigan et

al. [24], knowledge substantially describes a state or potential for action and decision in a person,

organisation or group. Learning, instead, is a dynamic process, which indicates permanent

changes in the state of knowledge, often manifested by a change in understanding, decision or

action. Knowledge mostly derives from a process where the amount of information achieved is

mediated by a context and by human beliefs. Two kinds of information can be identified: un-

probable and probable. According to the Information Theory [55], it is the un-probability that

defines the high value and usefulness of information, because un-probable information is mostly

embedded (in individuals or organizations) and, by definition, hard to unforeseen. On the

contrary, probable information is easily to forecast and therefore has a scarce or null value.

Learning capacity of individuals and organizations signs a deep gap between the two types of

information. The first one (un-probable) emerges by new contexts of interactions, the second one

(probable), instead, is normally codified and it is non-context specific (or inter-context).

Emergent innovation contexts need both types of knowledge: codified and non-codified. That is

why we need to facilitate an education process where both formal/codified and informal/non-

codified knowledge can coexist and interact, by fostering, for instance, a circular reproduction of

contexts that enable the generation of individual and organisation creativity.

In other words, learning can be seen as the capacity to integrate different types of

knowledge (both tacit and explicit) in an industrial or business activity. From the age of the

industrialisation to date, explicit types of knowledge and consequently stereotyped forms of

learning have been the only ones under the attention of policy action. In the emerging post-

industrial world, soft-tacit forms of knowledge and learning have come to dominate, allowing the

growth of a knowledge-based economy, characterised by high levels of adaptability, flexibility

and creativity at individual and collective level.

3 Types of learning

The scale of current economic and social change, the rapid transition to a knowledge-based

society and demographic pressures resulting from an ageing population in Europe are all

challenges which demand a new approach to education and training, within the framework of

lifelong learning5. Lifelong learning, in fact, is often encapsulated in the idea of the lifelong

development of human potential to empower the learner to adapt to continuously changing

circumstances. It is therefore generally agreed that lifelong learning marks a paradigm shift away

from an emphasis on the supply of education and training opportunities provided by systems and

institutions towards a demand for actual acquisition of learning in many different settings

reflecting changing needs over the lifetime of the individual. Many conceptualisations of lifelong

learning promote a multi- facetted aetiology consisting of active citizenship, personal fulfilment,

employability and social inclusion, and embrace learning at primary, secondary, tertiary as well

as continuing levels.

In the 2001 Communication from the Commission of the European Communities,

lifelong learning is defined as:

“all learning activity undertaken throughout life, with the aim of improving knowledge,

skills and competence, within a personal, civic, social and/or emplo yment-related perspective”.6

The breadth of this definition draws attention to the full range of formal, non-formal and

informal learning activity. In next paragraphs we are going to explain the conceptual contents of

these three categories, according to definitions given in the Communication.

Ø Formal learning

§ “Learning typically provided by an education or training institution, structured (in

terms of learning objectives, learning time or learning support) and leading to

certification. Formal learning is intentional from the learner’s perspective.” 7

• Formal learning mainly takes place in education and training institutions and are

leading to recognized diplomas and qualifications

Ø Non-formal learning § “Learning that is not provided by an education or training institution and typically

does not lead to certification. It is, however, structured (in terms of learning

objectives...). Non formal learning is intentional from the learner’s perspective.” 8

• Non-formal learning mainly takes place outside education systems at the

workplace and through learning activities provided by stakeholders, institutions

etc. within the civic society. Situated learning [32], and instructive learning [13]

belong to this category. They, in fact, are in practice a kind of efficient transfer of

tacit knowledge through apprenticeship.

Ø Informal learning § “Learning resulting from daily life activities related to work, family or leisure. It is

not structured (in terms of learning objectives, learning time or learning support) and

typically does not lead certification. Informal learning may be intentional but in most

cases it is non-intentional (or “incidental”/random).” 9

§ Informal learning is seen as the learning we experience through our daily life

activities as human beings.

4 Locus of learning (providers of education), contents and tools

Learning oriented activities take place in different ways and following different channels. We

distinguish among the locus of learning, i.e. the phys ical environment where knowledge is

transferred and learning mechanisms are activated. Basically the identify three natural places:

school, workplace and the Internet. As we can easily infer, each educational channel is

characterised by a different type of audience, and shows both advantages and disadvantages,

which we tried to summarise in the following.

4.1 Formal education à schooling

For formal education we mean the hierarchically structured, chronologically graded 'education

system', running from primary school through the university and including, in addition to general

academic studies, a variety of specialized programmes and institutions for full-time technical and

professional training.

Among the advantages of this type of education:

- it provides a system of easily readable and comparable degrees;

- it guarantees an educational base where to build next specialization.

Among disadvantages:

- long-term and general;

- credential-based;

- contents are standardized and input centred;

- the delivery system is institution-based, isolated from environment, rigidly

structured, teacher-centred and resource intensive;

- external / hierarchical control.

4.2 Training in line à workplace

Training in line includes every activities the enterprise develops for up-to-date the competencies

of its employees. They can be shaped in the form of classroom lessons or conferences and

seminars, as well as weekly/monthly meetings. This form of training is structured and is useful

for the transfer of specific knowledge related to practical issues concerning the production

system, as well as to technological issues concerning the enterprise communication and

information system.

Advantages:

- possibility to deepen ad-hoc topics strictly related to firm core-activities;

- opportunity to create occasion of ideas exchange between employees employed at

any level;

- reinforcing of the sense of belonging to the same work-community.

Disadvantages:

- very focused topics;

- scarce capacity to connect members outside the boundaries of the organisation.

4.3 On the job training à workplace

On the job training is an informal process of acquisition of professional skills, which is shaped

through the direct observation (on the field) of the activities that a just-employed should carry

out. By working next to an incumbent expert he has a great opportunity for absorbing gradually

his/her competencies [18]. It’s obviously a direct training tool (learning by doing), useful for

transferring not only abilities and information, but also tacit behavioural codes, allowing a

socialisation of competencies at an organisational level [43]. This form of learning can be

assimilated to a kind of apprenticeship, where the temporal horizon is limited and declared, and

the knowledge shared is mostly contextual.

Main advantages of the adoption of on the job training are:

- possibility to transfer knowledge (specific and tacit) regarding utilisation of

specific production processes, which imply both the familiarisation with the

technology and the specific behaviour typical of the productive context;

- orientation to workers employed at any level (from the lowest to the highest

ones);

- increasing horizontal intra- firm mobility of workers and consequently elevate

capacity to front complex problems related to interconnected areas of the

company;

- quick and easy inclusion of young workers in the firm context and enforcement of

the feeling of belonging to the new work community;

- perfect integration in the production activity, without breaking point.

Between the disadvantages we can consider:

- strong investment of the company in the process of training;

- subtraction of some of the most valid incumbent workers from their task during

the on the job training activity;

- risk of replication of past best practices, in a static learning context, where a kind

of path-dependency mechanism occurs.

4.4 Education on- line à society, communityàubiquification

Removing social, geographical, psychological barriers (by promoting, for instance, ICT) is a key

point in the process of facilitating access to learning opportunities. Workplace learning and local

learning centres are able to bring learning and learners together at times/paces and in places

suited to other people’s commitments. Education on-line is a technology-based category of

training, which allows instructor and student being separated geographically. Main efficient

vehicles for information exchange are multimedia tools, such as audio, video, and graphics. Both

synchronous (real-time training) and asynchronous forms of interaction are possible. Anyway,

the more is the reduction of temporal lag, the more we can assume the students can benefit from

this educational form. Proximity advantages of instant feedback can be re-created in the virtual

education environment, thanks to customised software for interactive individual and group

communication (Internet Relay Chat (IRC), Multi-User Domain (MUD), and MUD-Object

Oriented (MOO). We are talking about a distance type of learning, which is build upon an

interactive type of knowledge at the organisational level, and which can evolve towards a final

empowerment of workers thanks to the benefit of the enlargement of the number and expertise of

the learners involved. The shift from the organisational level to the community level implies a

growing process of knowledge sharing from which individuals, organisation and society can

benefit. ICT tools permit to go over the barriers of the single experience (both at the individual

and at the organisational level), and to exploit a network effect, where the pluralities of actors

and of their background joint together can be mutually empowered. Virtual communities of

practices, as described by Wenger [59] are one of the means that can be surprisingly helpful for

reaching the purpose.

Advantages in the implementation of distance learning for virtual office workers are

basically:

- possibility to chose a convenient location for both student and instructor, reducing

travel expenditures and wastes of time;

- availability of expert instructors independently from their geographic location;

- high interactivity due to the use of advanced communication technology, which

allows also the shyest student to express doubts and solutions (it is well known

how virtual interaction benefits from the sense of protection given by the web);

- global reduction of training costs, and consequently broader employee access.

Among disadvantages:

- absence of visual contact and connected difficulty to be concentrated, for the

student, and to give equal attention to all the students, for the trainer;

- difficulties to adapt certain topics to the distance learning format;

- initial difficulty to feel the sense of belonging to the virtual learning-community;

- basic computer skills are a prerequisite for accessing this educational channel;

- infrastructure costs, related to the acquisition of computer equipment and

communication services (specific software, fast connections and so on).

5 The pace of the learning activity: an interpretative framework

The number of the agents involved in the learning process determines the effectiveness of the

knowledge transferred and created among networks of different sizes. FIG. 1 shows the

relationship between the two forces that regulate the learning process, geographical power (in

terms of physical area covered), the relational power (in terms of number of agents involved) and

the resultant force, fruit of their interplaying: the effectiveness (in terms of amount and quality of

knowledge created and transferred) or knowledge intensity.

FIG. 1: SETTINGS OF LEARNING AND RELATED POWER.

SOURCE: OUR ELABORATION

The potential agents involved in the educational process10 can be grouped in three levels:

- The individual level orientates attention to the education and training of people;

- The organisational level refer to the co-operative and collective processes of

knowledge generation, management and learning within organisations and

between organisation in networks;

- The broader community or system level considers the overall coherence of

individual and organisational knowledge and learning processes, plus the

frameworks and incentives in place to further their development.

international

regional

national

community

workplace

family

individual

Relational power

Geographical power

Effectiveness/ Knowledge

intensity

We propose firstly a tri-dimensional framework, where different types of education, from

traditional (mono-directional and static) to technology-based (interactive and dynamic) ones,

give life to plural types of learning, which involve the participation of different agents.

FIG. 2: THE FRAMEWORK (FIRST STEP).

SOURCE: OUR ELABORATION

In FIG. 2 there is a graphic representation of the framework. In x-axes we find the

educational forms, in y-axes the learning types and in z-axes the agents involved. The best way

to read the graph is to start from the x-axes, and individuate for each educational form what is

the type of learning associated (y-axes). Finally, connecting the y-axes with the z-axes we can

have an idea of the impact of informal, non- formal, formal learning on the agents involved in the

process.

Let see what happens if we take in consideration the formal education: it implies a

structured and standardised type of learning, which involves learners at an individual level.

Scarce or null attention is given to interactions between the learner and the environment, in the

shape, for instance, of sharing experiences with other learners or of meeting the local working

demand. It’s basically routed on an instructive process, where little room is reserved to follow

and deepen individual proclivities, to foster personal involvement and to reinforce the

engagement.

Looking at the in- line training, we shift to a non- formal learning, based on participation

to internal courses or meetings, which are extremely focused in specific topics, which allow

workers belonging to the same organisation engaging together a learning experience, even if the

possibilities of mutual interaction are still low.

If we look at the on the job training, we assist to a non- formal learning process, which

doesn’t lead to a certification, which is deeply based on a strong peer-to-peer relationship

between the individual and the organisation. The sphere of interest here is enlarged, the number

of agents involved increases, and the goals of the training are in a way more reliable because

they are declined on the basis of a company’s needs.

Things completely change when we approach the on line education. Here, thanks to the

availability of modern information and communication technology, able to connect distant

location and to allow interactions between people both in an asynchronous and synchronous way,

learning process evolve towards a formal plus informal model. We enter the domain of the

virtual, which can be viewed as a place where employees meet together and share their

experience, but also a place where standard teachers and learners virtuously interact. The co-

existence of the offer of pre-packed curricula, on one side, and high versatile sections firm-

oriented or learner-oriented, on the other side, turns to be particularly useful to aid SMEs

embracing new challenges (in terms of technological change, innovation adoption, network

processes). In this case the standard becomes pushing flexible solutions that can broader involve

a plurality of agents, stimulating learners’ active participation and providing ad-hoc solutions.

By the way, this first framework can be extended including emergent issues in learning

types and focusing on the nature of the knowledge exchanged by different channels (or education

places). A representation of this enlarged framework can be found in FIG. 3.

FIG. 3: THE FRAMEWORK (SECOND STEP).

SOURCE: OUR ELABORATION

In the table presented in FIG. 3, out of the borders there are different types of learning

with their main characteristics and their level of impact (on individuals, organisations,

community), in columns there are educational forms, in rows there are educational channels.

Matching together this information we are able to describe the complexity of the inter-

relationships between the components of the learning system.

Here (FIG. 3) we can identify at least three strong forces that influences the dynamic of

the education process:

- the learning process;

- the capability to create knowledge by community;

- the knowledge resources.

Moving from the left to the right of the table, learning appears to be more and more un-

programmed, embracing the “informal” category, where explicit knowledge looses its weight

and the tacit knowledge prevails.

Moving top-down we meet a type of learning un-structured, which is able to affect an

enlarged number of actors and to build what can rea lly be called a learning-ecosystem, based on

knowledge sharing. Finally, if we follow the diagonal of the table, from the top- left corner to the

bottom-right one, we can individuate a pattern where value for the whole system is created. The

knowledge transferred in this case is focused in terms both of the task and the user, it is the fruit

of community interactions and it is mainly incorporated in individuals, as a mixture of tacit and

codified knowledge (derived by formal learning and experience).

6 Learning in SMEs and local production systems

Spatial proximity has been elected by some scholars as one of the most important determinants

for learning capability. They talk about economies of agglomeration, that is: net benefits of being

in a location together with other firms increase with the number of firms in the location.

Emblematic is the case of industrial districts, where non-market relations between firms, trust,

conventions, cultural structures and non-codified knowledge are seen as factors of spatial

binding, which promote innovation and entrepreneurship and help lowering transaction costs.

It is not the purpose of this work to recall all the types of local production systems, which

sometimes take the shape of a cluster [47], sometimes of an industrial district [9], some others of

a regional system of innovation [37]. The concept we want to take in account here as a reference

one is the local development, which involves simultaneously local firms, institutions, social

community, workers.

It is particularly relevant to give a careful look to the statistics concerning the pace of the

training activities of SMEs, which dominate the economic Italian landscape. ISTAT collected in

the second survey CVTS2 (Continuing Vocational Training Survey), performed in 1999, many

useful information on the learning structure of SMEs and large firms by interviewing directly

2.665 large enterprises and mailing 11.000 firms with more than 10 employees. The situation of

Italian enterprises can be compared at the international level with other countries (TAB. 1),

revealing a clear time lag that imposes a penalty on Italian SMEs development and

competitiveness.

TAB. 1: PERCENTAGE OF FIRMS THAT PERFORM TRAINING ACTIVITIES BY COUNTRY AND SIZE

SOURCE: ISTAT/EUROSTAT: CONTINUING VOCATIONAL TRAINING SURVEY - 1999

Country Total 10-49 employees 50-249 employees >249 employees

Denmark 96 95 98 100

Netherlands 88 85 96 98

Irland 79 75 98 100

Germany 75 71 86 98

Belgium 70 66 93 100

Spain 36 31 58 86

Italy 24 21 49 81

Portugal 22 17 46 78

The characteristics of the Italian business structure, dominated by small firms that

prevalently do not carry out any form of training activities pushes towards a serious reflection on

type, time, and place where to organise the necessary employees update.

We propose to look not only at the single firm, but at the network of relations locally

built and developed between public and private training institutions, trade associations and

chambers of trade, organizations and individuals, in search for a useful training planning,

organization and management (FIG. 4).

FIG. 4: THE TRAINING VALUE CHAIN.

SOURCE: ALBERTINI AND PILOTTI [4]

Besides, we individuate in the territory the first and natural place where to share training

investments, both between firms and workers. The specific local productive environment, with

its social and work-based relationships, constitutes a powerful layer where to insert instructive

initiatives, deploying the communication channels that already exist. We are referring to training

activities that benefit not only the single individual or firm, but also the overall local production

system, which is characterised by a lively local market for skill connected with a high level of

inter- firm mobility, which in turns fuel local knowledge transfer [54]. The existence of a district-

specific and not firm-specific labour market is unluckily not linked to a local institutional

engineering [14], able to plan customised training activities.

Despite the need of local learning policies [34][52], there is a lack of formal institutions

(trade associations, service centres, universities, research institutes, chambers of trade) or

informal institutional mechanisms developed between firms (inter-firm agreements, partnerships,

communitarian rules).

A inter- firm and communitarian place, not completely public nor private (firm specific),

should be created, where to access knowledge resources for labour force upgrading. We are

talking about a new locus of learning, which is rooted on the social and economic relational

tissue and whose benefit can be appropriated by all the agents of the local system, a meta-

organiser operating at a meso- level, just between the macro (government) and the micro (firm)

level. This new approach to the learning dynamics of local systems imply to shift the focus from

a supply- push to a demand-pull model, where the instructive technology adapt to the specific

needs of the system, to produce customised educational channels and contents, towards a

context-specific instructive value chain.

The flexible model of production, which is typical of the local production systems, has to

be coupled by an adequate learning structure, which is organised around the specific tasks to be

performed.

Stemming from the assumption that learning is a social activity, and derives from social

participation [32], we outline an environment that is marked out by the interplaying between

different agents.

Under this vision, territory can’t be no longer seen as a simple container of a lot of

elements (such as morphologic, social, economic, political objects), but it must be seen as the

locus of a fruitful interaction between them. ICT diffusion is one of the tools that can be

exploited to create quick and deep linkages between all the stakeholders of what can not be ever

named a “territory”, but which should be better defined as a “space system” (characterised by

dominating governance) or an “ecology system” (characterised by interdependence governance).

One of the heaviest problem a SME is finding a way to meet effectively time to work and

time to learn, that need to be viewed as different moments of a holistic process of growth. New

tools from ICT (Information and Communication Technology), which form the “knowledge local

infrastructure”, could be very helpful in this field, allowing the creation of alternative

educational channels, such as, for example, the distance education.

7 Conclusions

The paper aimed to enlighten on the complex learning environment which is created by the

interactions between different agents at different levels (individual, organization, community).

Looking for an interpretative framework, we propose our view for a possible schematization of

the places where learning occurs, the channels by which knowledge is transferred and the content

of the knowledge transferred. We basically distinguish between schooling, workplace and on-

line training. Our effort aims to produce a more policy-oriented contribution, able to overcome

the limits given by the theoretical controversy developed around the attempt to establish the

relative importance of tacit vs. codified knowledge and vice versa.

A particular attention is devoted to the analysis of learning activities occurring in local

production systems, where the territory and its properties (physical, social, economic) play a

fundamental role in planning training and instructive activities. The es tablishment or the

individuation of instructive meta-organizers avoid to keep knowledge transfer and accumulation

as an individual action.

The local production system behaves, in fact, as an ecology system, where the

interactions among the agents and between the internal agents and the environment, constitute a

natural field where to articulate modern education and training methods, that take in account of

the pre-existent networks of relations.

We pinpoint the need to customise the training offer according to the specificity of the

place and of the type of relations between firms, local institutions, labour market. Tools coming

from ICT appear to be a good chance to realize an educational network that can be rather flexible

in terms of time and space devoted to training activities.

Distance learning coupled with periodical encounters, such as fairs, meetings et al. could

be a solution to the largely diffused attitude towards routines and mental models driven systems

of running the business in micro and small firms.

The work is oriented towards the constitution of a complex learning system, which

empowers itself thanks to the local relations and which takes advantage from the fruitful

communication with global agents, in an evolving spiral of creation and conversion of both tacit

and codified knowledge through new connected educational platform, generating a multiplicative

effect of the learning efforts.

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End Notes

1 Source: Osservatorio Europeo 2002 sulle PMI. 2 Lanzara and Morner [31], referring to the work of Bateson [8], apply a similar definition. The ecology of open source, according to their perspective, is an interactive system. Part of the “rules” that “govern” the interaction in the ecology are in-scripted in the coordination technologies that parties use to coordinate their work. 3 Action learning can be associated, in a way, with the type of learning occurring inside Communities of Practices (CoPs) [60]. Here learning is viewed as a social process, where each member benefits from the interactions with other members, and where personal experiences and capabilities melt together with the experiences and capabilities of the whole community. Nevertheless, the main difference between the two types reside in the characteristics of the group (community, in the case of CoPs). CoP, in fact, constitutes a rather defined and fruitful environment, where to share knowledge and where to play action learning. 4 Source: Danish Ministry of Business and Industry. 5 At the national level, lifelong learning in Europe can be traced back to the 1970s where many countries, inspired by e.g. the UNESCO report on Learning to Be, paid substantial attention to ensuring lifelong education options based on humanistic concerns for their citizens by focusing on aspects linked to the "fulfilment of man". 6 “Making a European Area of Lifelong Learning a Reality”, Communication from the Commission of the European Communities, Brussels, 21.11.01 7 See endnote 6

8 See endnote 6

9 See endnote 6

10 The classification has been inspired by the considerations made by Gavigan et al.[24] in their Report on Knowledge and Learning prepared for the European Commission Directorate.