The identification and application of knowledge capital within small firms

Purpose – Research has shown that employers in small businesses may not provide, or fund, off‐the‐job training for reasons including that they believe that no training was considered necessary in their business. The research reported in this paper aims to focus on a study of software‐related companies that form part of an important sector for potential growth. Design/methodology/approach – This article reports findings from a study of 20 software related small‐ to medium‐sized enterprises (SMEs). The overall purpose of the research was to establish a model whereby companies within the cluster could identify the training and development needs of their employees, and also of their management team(s). Interviews were held with owner managers and senior staff, and a training needs analysis was conducted in each organisation. Findings – A number of factors were hindering the development of managerial talent in the sample. These included their small size, a lack of resources and availability of personnel for release to undertake development programmes as well as a shortage of specialist human resource management (HRM) expertise. Originality/value – This research contributes to the growing body of knowledge in the field of strategic human resource development in SMEs. However, the identification, understanding and development of knowledge capital are vital to compete within international markets and the knowledge economy. The approach suggested by the research provides a framework for improvement by identifying requirements for a “toolkit” that meets the needs of organisations and bridges the gap within the existing literature and empirical evidence.