Training needs of emerging industries

Key messages

• This study examined companies and organisations developing innovative products and services. Innovative companies pass through four distinct stages of development, each with different requirements for staff employed and the types of training needed.

• In the first stage, the organisation often consists of a few employees working almost exclusively on researching and developing a concept. These individuals usually include the originators of the idea and a few highly qualified or experienced specialists such as mechanical engineers, physicists, chemists and highly experienced tradespersons. In this stage, the company often 'buys in' the specialised qualifications, expertise and experience rather than engage in training.

• In the second stage, more people are employed to develop and refine processes and build and test prototypes. These new employees are generally experts in their fields, often with practically-oriented qualifications and experience.

• In the third stage, the organisation tentatively embarks on manufacture and sale of its products. At this point it requires employees for the more commonplace processes of production, administration and clerical support. Sales and marketing personnel may also be employed; however, these functions are often still handled by personnel originally involved in establishing the company.

• In the fourth stage, the organisation engages strongly in production, sales and marketing. Lower-skilled personnel are required for production, supply and distribution. Qualified and experienced personnel are needed for marketing, sales, finance and quality control, and also for management and human resource functions. Research and development often becomes a smaller part of overall operations.

• The majority of training needs of innovative companies did not differ greatly from those of ordinary companies. Where they did differ was generally in the areas of leading-edge technology in which they were working. In such cases they were often working with technology which was in advance of that taught by vocational education and training (VET).

• Vendors of products and materials were also often at the leading edge of their fields and provided training to innovative companies.

• Overall, no great change is needed in VET training to meet the needs of emerging industries. Changes that are required mostly relate to the currency of technological knowledge possessed by VET teachers. To be of greatest value to emerging industries, VET needs to:

  • upgrade and maintain currency. To do this VET should consider:
    • working collaboratively with innovative companies in determining training needs, and developing and providing customised training applicable to the leading edge technologies involved, and
    • working collaboratively with vendors of products and materials to innovative companies, to help the vendors develop specialised training, train vendor trainers in training delivery and provide access to training facilities.

Such collaboration potentially benefits, not only VET, in terms of maintaining currency of technological knowledge, but also innovative companies, in the form of customised, up-to-date training, and vendors, in the form of better provision of their specialised training.

Background and methodology

In setting out to examine the training needs of emerging industries, it was first necessary to define what constitutes an emerging industry. 'Emerging' implies something that is new and developing. So, for example, a new industry or segment of an industry could be developing, in which new client services were being developed and offered, or in which new technologies were being developed and applied.

For the purpose of this study, the focus was on industries in which new technologies were being developed and applied because it was felt that they would be the most demanding in terms of levels and extent of training. Companies involved in the development and application of new technology were referred to in the study as 'innovative companies'. Factors that were taken into consideration in identifying the industries and companies to be studied were: the rate and location of innovation in government, business and not-for-profit sectors; the extent of research and development activity; and registration of patents, trademarks and designs.

Respondents from 18 companies were interviewed at length. These companies came from a wide range of sectors and all of them were involved in developing or manufacturing leading-edge products and processes. A more detailed report on each of these company case studies is available on NCVER's website.

Evolving stages of development

It was possible to identify four stages of development as these companies progressed from embryonic organisations researching and developing a concept to mature companies engaged in manufacturing and marketing their products. Each of these stages had different requirements in terms of the staff they employed and the types of training required.

In the first stage, the organisation often consisted of just a few employees working almost exclusively on researching and developing a concept. These individuals usually included the originators of the idea and, depending on the industry sector, a few highly qualified or experienced specialist personnel such as mechanical engineers, physicists, chemists and highly experienced tradespersons.

The second stage required the developing and testing of concepts. More people were employed to develop and refine the processes involved and build and test prototypes. These new employees were generally experts in their fields, often with practically oriented qualifications and experience and included highly experienced tradespersons.

By the time the third stage had been reached the organisation was tentatively embarking on manufacture and sale of its products. At this point it required employees who were to be engaged in the more mundane processes of production, administration and clerical support. Sales and marketing personnel might also be employed, but often this function was still largely handled by employees who had been involved in establishing the company.

In the fourth and final stage, the organisation was substantially engaged in production, marketing and sales. Semi-skilled personnel were required for production, supply and distribution functions and qualified and experienced personnel were required to take care of marketing, sales, finance and quality control. By this time the company may have reached a size that also required specific personnel to handle management and human resource functions. Research and development was generally continued, but as a smaller proportion of the company's overall operations.

Knowledge and skills and attributes

As already noted, the workforce of a new innovative company often comprises a small, closely knit group, sharing ideas and combining resources to solve the myriad problems encountered in developing a new idea-often with some degree of secrecy to protect the company's intellectual property. In choosing employees to work in such an environment, employers therefore especially seek people with suitable values, attitudes, and dispositions.

These innovative companies sought to recruit highly skilled, qualified and experienced personnel for their research and development, technical, financial, and managerial functions. Where formal qualifications were not the main criterion for employment, they, like any other company, looked for people with proven track records, and relevant skills and experience.

There was an expectation that employees in the higher level knowledge occupations (for example, researchers, scientists, engineers, metallurgists, audiologists, technicians, accountants and marketers) would come with already highly developed fundamental skills and knowledge required for their occupations. The company would then build on these skills and knowledge to develop highly specialised expertise and customise work roles and processes to company requirements.

The type of work carried out by clerical, and general support workers in innovative and emerging industry companies was found to be no different from that which occurred in any other company. However, the focus for those involved in management, research and development, technical operations, marketing, sales and accounting could be much more specialised. The companies were often heavily dependent on the accurate targetting of niche markets at home and abroad, and they needed an ability to operate in an environment which required knowledge of how to protect intellectual property in an extremely competitive international environment. The international focus of many of the companies also required key employees, especially those who would be negotiating with people in other countries, to possess some facility with the appropriate foreign language and an understanding of the culture of the people with whom they were dealing. There was also an increasing need for accountants and directors to understand legal issues, including those relating to statutory declarations and intellectual property.

Training

The degree and higher degree level qualifications often sought by innovative companies for their research and development, technical, marketing and managerial functions are mostly available from institutions of higher education. However, emerging industry companies also need courses to develop the knowledge and skills of employees working in trades and other technical roles, clerical and administrative functions, and also manufacturing and production. They also require more specialised training in areas such as human resource management, computer operation, industry-specific and generic computer software packages (such as computer-aided design [CAD], word processing and spreadsheets), computer programming, project management, report writing, marketing, team building, language and culture, time management and quality assurance. These types of courses are already available in many vocational education and training (VET) institutions, or can be developed by providers who have experience in working with enterprises to customise training for specific needs.

Customisation and, where feasible, development of new courses by VET could play an important role in helping innovative companies to acquire the highly specialised skills needed to operate at the leading edge of technology and to access venture capital and compete in global markets. Areas of importance in this context include protection of intellectual property, application of patent law, and commercial and marketing expertise. Collaboration between VET and the companies in need of this specialised training could not only assist in the development of new training, but also enable VET teaching staff to gain increased understanding of new developments and directions in technology. Collaborative ventures might include the establishment of training facilities on-site to assist VET to deliver specialised training in the workplace.

Vendor training (training provided by the vendors of equipment and materials) was identified as one of the best ways for companies to access the most up-to-date training in their particular fields. VET providers and vendor providers might derive mutual benefit if they were to work co-operatively in providing training. VET staff would gain knowledge of latest developments, and vendor trainers would gain access to VET teaching facilities and expertise (for example, vendor trainers could access VET train-the-trainer courses).

Concluding remarks

Innovative companies in emerging industries have diverse and important training needs. While much of the higher level training and qualifications required is generally provided by higher education, VET also has a role to play in developing further knowledge and skills once experienced and qualified personnel are hired. Because these innovative companies are often operating at the leading edge of their technological fields, the further training they require is highly specialised and sometimes unique. Although VET is already well placed to provide customised training for employers, there may be extra opportunities for it to advance the currency of its knowledge by working closely with these companies to identify special requirements, develop programs to deliver the special training and extend the expertise and knowledge of its teachers.