Training and productivity in African manufacturing enterprises

Abstract

This paper focuses on the private learning mechanisms by which firms build up their technical capabilities and create competitive advantage. Specifically, the authors examine efforts inside the firm to promote technical learning, such as worker training and direct acquisition of superior foreign know-how in the form of technology licence agreements, and measure their effects on enterprise productivity. In terms of public policy, knowledge of the extent to which private learning mechanisms contribute to enterprise productivity, is a prerequisite to assessing the need for any kind of public support. Demand for public support is, among other things, a function of the extent and effectiveness of existing private initiatives. Where private learining mechanisms are doing the job of raising firm capabilities to adequate competitive levels, public support programs are in lower demand. But they can also be complementary. Even where existing private learning efforts are working well, markets often fail to provide a socially optimal amount of investment in private technical efforts, like training. In such cases, public support services can complement private initiatives to increase training further toward optimal levels.

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