Papeles de trabajo

Introduction

The quantitative aspect of this thesis is based on an investigative telephone survey o f 2000 small businesses in the West Midlands region o f Great Britain. The firms in the research sample were randomly selected, using a computer-generated numerical table, from the Yellow Pages Business Database for 1993. My choice of this particular database was based on past user experience and the knowledge that it contains the largest number o f business records in Great Britain The statistical information that it contains is kept up to date by a continuous programme o f validation (Yellow Pages, 1993a 10-11). During January 1993, while considering its usefulness for a wider research programme involving 10 regions in Great Britain, 1 checked its comprehensives by focusing upon three locational sub-samples within the West Midlands For comparison purposes I randomly selected three groups of 300 firms from Coventry, Birmingham and Wolverhampton These samples were compiled from various business sources. Without exception all the firms selected were also present in the Yellow Pages Business Database (1993b). Furthermore, while the details o f a small sub-sample o f firms varied between different sources, these were accurately recorded in the Yellow Pages database

The completeness o f the records contained in this database can be attributed to a long-standing Yellow Pages policy o f free registration and display o f company details supplied by sole traders or business organisations located in Great Britain Larger, more detailed displays as well as customised or enhanced advertisements can also be included, at a cost, in local book directories. These, in turn, are updated and distributed, annually and free o f charge, to households and businesses within specified geographical areas. An extensive range o f related services is available from Yellow Pages and, to the prospective researcher, these further add to the attractiveness o f this comprehensive database Detailed, locational and/or sectoral selection o f target firms is possible by postcoded address data records are available nation-wide, by country (England, Wales, Scotland or Northern Island) or by county boundaries (Yellow Pages, 1993a). Standard or more specific data can be obtained in a wide range o f presentation forms: self-adhesive labels, laser printed customised letters, record cards or on magnetic media (Yellow Pages, 1993b) Although primarily targeted at sales- or marketing-oriented strategies I have found that the Yellow Pages database was also ideally suited for my proposed investigative research. Its only drawback was its initial high cost, a factor mitigated to a large extent by its in-built flexibility and time-saving properties

The Pilot Studies

Two pilot studies were carried out before commencing the main quantitative survey in the West Midlands. The same questionnaire was used in both a mail drop involving 100 small firms and a telephone survey o f a further 100 small businesses, both sets located in the East Midlands region o f Great Britain. Even though a self- addressed, stamped envelope was included in the postal survey, at the end o f a period o f thirty days after posting, only 7 percent o f prospective respondents returned a completed questionnaire A reminder was sent out to the non-respondent firms but only two more replies were received in the following thirty days. At this stage, having only achieved a response rate o f 9 per cent 1 decided not to use the postal survey method for my investigative work and concentrate upon my alternative strategy.

In contrast, my pilot telephone survey achieved a more satisfactory response and 69 owner-managers consented to answer my questions. Furthermore, as a result of suggestions received during the pilot telephone survey two major and a number o f minor modifications were made to my initial questionnaire Arguably, these changes could have proved beneficial to a postal questionnaire should I have continued with that particular strategy It was, however, during telephone conversations with owner/managers that important improvements were suggested In view o f the insights that I gained from my tw o pilot surveys I decided that 1 would prefer to use telephone interviews as they represented a more effective and direct research strategy

Even though I had carefully planned and constructed my initial questionnaire it became obvious that respondent feedback offered an opportunity to improve upon the potential response rate Firstly, it became apparent that my questionnaire w as too long and that it was unreasonable to expect an owner/manager to spend more than twenty minutes on a telephone survey. Secondly, it was suggested on a number o f occasions that it would be much better to ask training-related questions in the first part o f the interview; the personal and firm-specific information could be collected during the second and concluding part o f the survey. Following further suggestions, I also made minor modifications to the length and order of individual questions. Editing the original questionnaire posed a serious challenge, as each question appeared to be equally important and indispensable to the success o f my investigative survey In the event, a streamlined, three part questionnaire proved a more effective research tool.

The West Midlands Survey (1993)

According to the West Midlands Regional Office ‘Summary of Key Statistics’ (WMRO, 1993:4) the region covers a geographical area o f 13,013 square kilometres, representing 5 4 percent o f the total area o f United Kingdom At the time o f the survey its population comprised 5,223,372 individuals (or 9 36% o f the total UK population) Although during the late 1980s service firms and related employment exhibited a tremendous growth (similar to other regional economies in Great Britain) in 1993, traditional manufacturing industries still contributed significantly to regional economic

activity Indeed, just over half o f all jobs were concentrated in four manufacturing sectors (Table 1.1). A brief comparison, in percentage terms, o f the employment provided by the top six sectors in West Midlands and Great Britain is provided below:

Table 1.1- Employment in the Top Six Manufacturing Sectors in West Midlands and Great Britain

WEST MIDLANDS GREAT BRITAIN

Mechanical Eng. 17% Electric/Electronic Eng 17%

Metal Goods M anf 15% Mechanical Eng. 15%

Motor Vehicle Manf 11% Food/Drink/T obacco 10%

Electric/Electronic Eng. 10% Paper & Printing 10% Manufacturing - Materials 8% Metal Goods M anf 6%

Manufacturing - Other 8% Chemical 6%

Adapted Irom W M (K ), 1993:2 - ‘Industrial Trends'

The top six manufacturing sectors in the West Midlands region account for 69 per cent o f its employment as compared to only 64 percent overall in Great Britain. At the time o f the survey, Motor Vehicle Manufacturing still accounted for 11 percent o f employment: an important proportion o f the region’s working population was still linked to one o f Britain’s fastest declining manufacturing sectors. Metal Goods and Materials manufacturing represented a total o f 23 per cent as compared to only 6 percent across Great Britain. It should also be noted that Food/Drink/Tobacco, Paper and Printing and Chemical sectors, while cumulatively representing over a quarter o f manufacturing in Great Britain, do not figure in the top six sectors in West Midlands The specific manufacturing mix characteristic to West Midlands appears to be unique

to this region and could significantly influence training outcomes in small firms located within its boundaries

Blanket generalisations, such as found in some government-inspired comparative surveys, must be viewed with caution, in particular when they are based on relatively limited regional samples. The results o f a survey of 2000 firms located in a specific geographical area are more likely to reflect the individual characteristics of a location as well as its particular social, cultural and economic mix Detailed comparison with similar surveys, conducted in all the other officially designated regions o f Great Britain, could identify subtle variations and differential factors that have mostly evaded comparative research to date. My wider research study, o f which this survey forms an integral part, sets out to identify and analyse such regional differences in training attitudes and their influence upon actual provision Its long-term aim is systematically to gather and analyse training-related data across ten regions in Great Britain over a period o f twenty five years

The West Midlands has been divided into 10 TECs o f various sizes, each individually funded and responsible for its own territory. Amongst these there is considerable territorial variation, in relation to both their territory and the size o f their working population For example, Staffordshire and Birmingham TECs vary considerably in the size o f their territory, yet each incorporates a population o f nearly one million individuals Birmingham TEC covers an almost exclusively urban territory while the geographical area that Staffordshire TEC covers is mainly rural in character The ethnic composition o f the population of individual TECs also varies considerably

Just over 17 per cent o f Birmingham’s population is o f ethnic minority origin, while Staffordshire TEC oversees one o f the lowest ethnic minority proportions (2 per cent) in the region. Furthermore, in the case o f Coventry and Warwickshire TEC the ethnic minority component o f its population varies considerably within two well-defined geographical areas. The urban/rural component of this particular TEC is enforced not only by a distinct manufacturing/service divide but also by inherent ethnic differences: 11 percent o f the population in Coventry is o f ethnic minority origins, as compared to only 3 percent in Warwickshire (Table 1.2).

Table 1.2 - The West Midlands Region: TECs Territory, Size and Population

Training and Enterprise Council Size O f Territory (Hectares) Total Population (Persons) Ethnic Minority (%) Birmingham 26,399 993,000 17 Central England 64,918 467,000 5 Coventry/Warwickshire 207,535 787,000 *7 Dudley 20,059 311,000 9 Hereford/Worcester 345,575 413,000 2 Sandwell 8,561 295,000 15 Shropshire 345,895 413.000 2 Staffordshire 254,033 988,000 2 Walsall 10,595 260,000 12 Wolverhampton 14,228 287,000 13

Within the ten TECs in the West Midlands region, considerable further differences can be noted in regard to the size o f their working population and related unemployment rates Birmingham, Staffordshire and Coventry & Warwickshire TECs, although covering similarly large working populations, yet exhibit significantly different rates o f unemployment. Their individual average duration o f unemployment also differ considerably With an unemployment rate o f 13.4 per cent, Birmingham TEC has the worst record in the region. Furthermore, long-term unemployment, at 62.8 percent, and an average unemployment duration o f 38.7 weeks have consolidated Birmingham TEC’s position at the bottom o f the regional league Staffordshire and Coventry & Warwickshire TECs show lower unemployment rates and long-term unemployment periods. Average duration o f unemployment was recorded significantly lower at 24.7 and 27 0 weeks respectively.

On average, TECs with a larger urban population appear to be worst affected by long-term unemployment both in terms o f numbers and duration. Although total size o f the working population does not appear significantly to affect unemployment rates there appears to be a positive correlation between its ethnic minority proportion and long-term unemployment Birmingham, Sandwell, Walsall and Wolverhampton TECs have populations with an ethnic minority component in excess o f 12 percent significantly, average unemployment durations in these locations were recorded at over 32.5 weeks and long term unemployment affected more than half o f all out-of-work individuals The position o f the unemployed individuals in Coventry and Warwickshire TEC is masked, to a great extent, by the lack o f individual statistics for its two very

different geographical components: however, cumulative figures available for trend analysis place this TEC in the higher unemployment bracket.

Table 1.3 - Working Population and Unemployment by West Midlands TEC Territory

Training and Enterprise Council (TEC) Total Working Population (Persons) Total Unemployed (Persons) Percentage Unemployment (%) Long-Term Unemployed (%) Birmingham 526,000 70,687 13.4 62.8 Central England 192,000 19,612 10.2 49.7 Coventry/W arwickshire 468,000 39,172 8.4 5 1 0 Dudley 129,000 15,219 11.8 52.5 HerefordAVorcester 225,000 14,648 6 5 42 1 Sandwell 155,000 19,227 12.4 59.1 Shropshire 187,000 14,686 7.9 45.3 Staffordshire 483,000 39,705 8.2 47.9 Walsall 122,000 14,723 12.1 56 1 Wolverhampton 137,000 17,708 12.9 54.3 Source: WMRO 1993:71-77

Interestingly, Hereford & Worcester, Shropshire and Staffordshire TECs, with their predominantly service-oriented, rural economies, exhibited not only lower unemployment rates but also shorter average periods o f unemployment The Central England TEC, which covers a territory almost three times larger than Birmingham TEC but just over half the population, contains a smaller proportion o f ethnic minority population within a larger rural area In line with the trends observed previously, unemployment rates and average duration o f out-of-work periods arc considerably

lower in Central England TEC than in Birmingham TEC. It would be useful to know to what extent such variations affect the funding that is made available by central government to the more handicapped TECs in the region. It is acknowledged, however, that some o f the most disadvantaged urban areas in the region have been in receipt o f some regional and European aid It would be interesting to target some of the recipient firms in this sample for further, in-depth analysis Perhaps this could show if at least some o f the funds have been used to improve the quality o f the workforce or to provide for better working conditions.

The Research Sample

In total, 2247 firms were approached by telephone to achieve a respondent sample o f 2000 owner/managers. The resulting response rate o f 89.01 percent is considered to be high enough to allow generalisation o f results (Ref.) at least for the West Midland region O f the 247 owner/managers that have declined to answer any questions 174 (representing 70.45 percent o f the sample) gave ‘researcher harassment’ as their main reason for doing so: apparently they have been approached with similar requests (by academic and commercial researchers) at least five times in the last six months Normally, they do not have any further contact with researchers once they have provided them with the requested data None o f their promised feedback or follow-up has ever materialised and, consequently, these owner/managers have decided that neither they nor anyone else in their organisations should participate, as a matter o f internal policy, in research projects A further 69 owner/managers gave

confidentiality concerns as their reason for non-participation, only 4 cited lack of time as a barrier to participation

In my research, respondent confidentiality is a priority and has been taken into consideration at the questionnaire design stage: after the pilot survey, however, minor adjustments still had to be made in order to reassure owner/managers that their identity and company details would not be disclosed There were no feedback promises made to any respondents nor did 1 attempt to bargain with non-respondent owner/managers O f the initial 247 non-respondents just under two thirds eventually agreed to be interviewed. These responses were not included in the quantitative survey in order to avoid any possible statistical distortions. They were important, however, because these replies were very similar to those given by the other respondents. Thus, it would be reasonable to assume that the non-respondent 11 percent o f the sample could not have significantly aff ected the outcome o f this survey

The Yellow Pages Database sub-divides its sample o f firms into 7 size bands Conveniently, the first five bands ( coded from A to E, inclusively) coincide with my own working definition o f small businesses, band F and G could be used, respectively, as a guide to the medium and large firms in Great Britain Just under 78 per cent o f the sample could be classified as micro-enterprises (Band Code A and B) - a content marginally higher than that found in the Yellow Pages Database The number o f very small businesses (Band Code C) was also marginally higher than the national average at 12 6 per cent. Interestingly, small firms (Band Code D and E) amounted to 8 9 per cent as compared to 10 0 per cent nationally. Although marginal, this difference could

reflect both the concentration o f very small manufacturing firms still present in the West Midlands region and the lower number o f service-oriented micro-enterprises.

Table 1.4 - Sample Comparison Between Yellow Pages Database and the West Midlands Survey BA N D N U M B E R NO O F PERC EN TA G E NO OF P ERC EN TA G E CODE OF B U S IN E S S E S B U S IN E S S E S B U S IN E S S E S B U S IN E S S E S G R E A T G R E A T (WM (WM E M P L O Y E E S B R IT A IN B R IT A IN SA M P LE ) SA M P LE ) (N= 1,595,387) (%> (N=2,000) (%) A 1-5 979.567 61.4 1,242 62.1 B 6-10 237,713 14.9 314 15.7 C 11-19 193,042 12 1 252 12.6 D 20-49 127.631 8.0 134 6.7 E 50-99 31.908 2.0 44 2.2 F 100-199 12.763 0.8 8 0.4 G 200+ 12.763 0.8 6 0.3

Thus, in percentage terms my sample is very similar to the Yellow Pages Database, at least in the first five band codes (Table 1.4). In the medium- to large-firm categories the sample is much smaller than its national equivalent. This could be a result o f post-recessionary restructuring o f larger organisations or a reflection o f regional economic policy The research team at the Warwick University SME Centre has noticed a similar trend and have tentatively attributed it to the nature o f their data samples Further research is needed into regional SME size differences before any definitive conclusion can be reached but such discrepancies could prove significant in comparative studies

A sectoral breakdown o f my sample (Table 2.1) revealed that 5171 percent o f all small businesses could be classified as manufacturing firms; service firms represented 40.38 percent o f the sample and cumulatively, construction, agriculture and forestry & fisheries accounted for 7.91 per cent. The proportion of manufacturing firms in my sample was somewhat lower than 1 had expected, given this sector’s significant contribution to employment in the region. Conversely, service firms amounted to a larger segment o f the sample than 1 had expected Although 1 suspected that agriculture and forestry & fisheries establishments would not be present in significant numbers, the rather low representation o f businesses in the construction sector came as a surprise to me. On average, the construction sector can be expected to represent about 10 percent o f the region’s micro-firms Perhaps the prolonged recessionary conditions have disproportionately affected the survival of sole traders (who usually employ 2-3 casual ‘jobbers’) involved in the housing business Alternatively, the relatively large number o f service firms present could reflect the ‘push-pull’ effects o f the recession or the low capital requirement for new firm formation in this particular sector

Table 2 .1 - Sectoral Breakdown o f the West Midlands Sample

SECTOR NUMBER OF FIRMS (N= 1,986) PERCENTAGE (%) Manufacturing 1027 5171 Services 802 40 38 Construction 105 5 29 Agriculture 31 1 56

The size distribution o f my research sample (Table 2 2) also generated some interesting findings In the service, agriculture and forestry & fisheries sectors there was an obvious concentration o f establishments in the lower size bands Manufacturing