Academic journal article Journal of Small Business Management

Small Business Training as a Strategy to Assist Displaced Workers: An Ohio Pilot Project

Academic journal article Journal of Small Business Management

Small Business Training as a Strategy to Assist Displaced Workers: An Ohio Pilot Project

Article excerpt


Cet article decrit et analyse six programmes pilotes recemment etablis dans l'Ohio dans le but d'evaluer les strategies de formation de d'assistance aux travailleurs recycles, dans le cadre de la creation de petites entreprises. La discussion porte entre autres sur la raison d'itre de ces initiatives, leur mode d'organisation et d'operation, et les raisons ayant limite leur expansion. Suivant un commentaire sur les lecon it tirer de cette expdrience, les auteurs de cette etude concluent en declarant que bien que ce type de formation de futurs petits entrepreneurs independants puisse etre, dans certains cas, utile aux travailleurs recycles, une enquete plus approfondie serait legitime.

Firms with fewer than 100 workers employ about 50 percent of all private nonfarm workers in the United States. They account for over 90 percent of all U.S. companies and generate 38 percent of the nation's Gross National Product.' These companies also generated 52.6 percent of net employment growth from 1976 to 1982. In 1983 there were approximately 7.5 million self-employed individuals in the United States, and an additional 5.5 million who mixed self-employment and wage and salary employment."

Between May 1979 and May 1983 incorporated self-employment grew by 33.3 percent; part-time unincorporated self-employment grew by 19.2 percent; and self employment among wage and salary workers grew by 468 percent. In contrast, full-time wage and salary employment fell by 5.7 percent during the same time period. David Birch of MIT's Program on Neighborhood and Regional Change reports that during the past five years, the top 5 percent of companies ranked by employment growth rate have created 83 percent of the jobs added by all companies that existed at the start of that five-year period. Of this top 5 percent of companies, 63.7 percent had fewer than twenty employees at the start of the period.

This remarkable difference in employment growth between small and large firms has prompted some public policy decision makers to look to selfemployment and small business training as a possible intervention strategy for addressing the problems of the nation's unemployed. While historically little of state and federal employment and training funds have been directed toward entrepreneurial training, recent trends in employment growth have fostered renewed interest in this area.

This article reports on one recent innovative effort in providing entrepreneurial small business training to a population experiencing labor market difficulty. Instead of providing access to transfer payments for individuals who are attempting to create their own small businesses (as tried in France and Britain), the Ohio project decided to focus on helping individuals to acquire the skills needed to initiate and operate a small business enterprise.

The Entrepreneurial Training Pilot Project of the JTP-Ohio Division of the Ohio Bureau of Employment Services, under the auspices of Title Ill of the Job Training Partnership Act, sought to test the viability of self-employment training for dislocated workers. The Act, which is the country's major legislation for meeting the education and training needs of the unemployed, defines a displaced worker as:

(1) an individual who has been terminated or laid off or who has received a notice of termination or layoff from employment, is eligible for or has exhausted his/her entitlement to unemployment compensation, and is unlikely to return to his/her previous industry or occupation;

(2) an individual who has been terminated, or who has received a notice of termination of employment, as a result of any permanent closure of a plant or facility; or

(3) an individual who is long-term unemployed and has limited opportunities for employment or reemployment in the same or similar occupation in the area in which the individual resides. …

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