Industrial Training and Technological Innovation

A Comparative and Historical Study

Howard Gospel

• Publisher: Routledge
• Year: 2010
• Print ISBN: 9780415580304
• eBook ISBN: 9781136929144
• Edition: 1
• Topic: Business
• Subtopic: International Business
• Index: Business

Taking an international and comparative perspective, this book focuses on the relationship between industrial training and technological change in three major global economies – the UK, USA and Japan. The contributors, an international group of leading researchers, look at the origins and development of training in these countries, and analyse the benefits resulting from the interaction of a skilled workforce and technological change. This analysis of training in major industrial nations reveals the full complexity of the relationship between labour and technological change. It shows the value of an approach which is both historical and comparative, and highlights the importance of education and training as a necessary basis for successful innovation.

Chapter 1
Industrial training in Britain and Japan: an overview

Howard F.Gospel and Reiko Okayama

Innovation (be it as a result of either indigenous development or transfer) requires a background of knowledge and skills for its successful implementation. Conversely the lack of appropriate knowledge and skills represents a significant obstacle to successful innovation and economic performance. This chapter provides an overview of training systems in Britain and Japan from the late nineteenth century into the post-Second World War period. It focuses mainly on manufacturing industry and on training at three levels: managerial (defined as those with strategic and operational responsibilities, from top down to supervisory level), technical (engineers, chemists, and other technical specialists), and operative (maintenance and production workers).

The notions of external and internal labour markets are used in the chapter. An external or occupational labour market exists where employers compete for workers and workers compete for jobs. Mobility between firms is facilitated by information on skills, often signalled by formal, externally validated, qualifications. An internal labour market may be said to exist when the employer deliberately recruits from outside only to certain limited points of entry and seeks to fill other vacancies by promotion or transfer of existing staff. Thus, within an internal labour market, there will be movement between jobs within the same firm, but little movement to or from other firms. As a consequence externally validated qualifications are less important except at the point of entry into the firm.¹ A related distinction, used here, is the notion of general and specific skills. The former skills are those useful to a variety of firms and which workers can transfer in the external labour market. The latter are skills more specific to one internal labour market and which have less value outside that organisation. Economists argue that employers are reluctant to bear the cost of training in general skills but will finance training in firm-specific skills. Having made the latter kind of investment, there is an incentive for employers to retain workers trained in such skills.² Likewise, there is an incentive for workers to stay with the firm in order to secure maximum compensation for the skills they have acquired and which they cannot easily transfer.

The chapter also uses the notion of organisational capability.³ By this is meant the existence of corporate structures and managerial hierarchies which enable the firm to plan and coordinate its activities, including the training and development of staff and their successful integration into the production process. In the area of training, this is a simultaneous process: organisational capability facilitates training and human resource development, and such development, especially at the managerial level, creates organisational capability. It will be argued that the large Japanese firm, especially in the post-Second World War period, has developed a greater organisational capability than its British counterpart and that this has made training and human resource development more effective.

Background: nineteenth and early twentieth centuries

The development of training must be set against the industrial and educational backgrounds of the two countries. Here we would wish to stress a number of factors. In industrial terms, late nineteeth century Britain bore many marks of her early start—a predominance of small firms, family owned and controlled, differentiated product markets, a commitment to traditional labour-intensive technologies, and well-developed external labour markets. Japan, as a late developer, relied very much on technology transferred from the West, and the state played a major role in promoting industrial development for national purposes. All modern businesses in Japan were based on imported Western technology and, for their successful introduction, required specially trained and skilled labour which could not be readily acquired in the external labour market.

The educational system of nineteenth century Britain was highly voluntaristic and fragmented, with many different types of schools and colleges and little national coordination. Compulsory primary education was introduced in the 1880s and legislation at the beginning of the twentieth century created a framework for secondary level schooling. Technical education was mainly left to local initiatives and consisted of a patchwork of schools and institutions. At the higher levels, in the 1880s and 1890s, there was a significant development of new university colleges and technical institutes as described elsewhere in this volume by Guagnini. However, throughout the period, the elite private schools and Oxford and Cambridge universities retained a considerable influence in setting the ethos of the educational system and in providing the education of significant elements of Britain’s top business families.

In Japan there was much more direct state intervention in the development of the educational system. A decree of 1872 determined a framework for educational institutions, primary to tertiary, which emulated Western systems. Initially use was made of the traditional facilities such as the temple schools of the Tokugawa period. School attendance in 1873 was 40 per cent for boys and and 15 per cent for girls. In 1886 four years’ schooling was made compulsory, and the percentage of attendance increased to 47 on average, 62 per cent for boys and and 29 per cent for girls. Just before the First World War attendance had risen to over 90 per cent, though the number who actually completed a full elementary or secondary education was much lower. Equally, as will be shown later, the government was involved from the early Meiji period in promoting tertiary education. By the First World War the annual enrolment of students in colleges was 50,000.⁴

Management education and training

A separate category of managerial employees emerged only slowly in nineteenth century Britain. By 1907 the ratio of administrative, technical, and clerical staff to production workers in manufacturing industry was 8.6 per cent, smaller than in the US and Germany, though larger than in Japan at the time.⁵

In considering the education and training of management in nineteenth century Britain, it is useful to distinguish between founders of businesses, managers, and inheritors.⁶ Broadly speaking, founders who had received a formal training beyond school level were most likely to have served an apprenticeship, either of the craft or premium type (under the latter a sum was paid for a higher-grade training aimed at preparing the apprentice for a managerial position). At the end of the nineteenth century a growing proportion, though still a minority, had attended a technical college. Where firms had grown sufficiently large to employ non-family managers at senior levels and where these had a formal training, it was most likely to have been some kind of apprenticeship or pupillage. In the decades before the First World War only a small number of university graduates occupied management postions even in the largest British firms. Further down the managerial hierarchy, middle managers had often served an apprenticeship and similarly foremen were usually craftsmen promoted from the shopfloor.⁷ The inheritors were most likely to have received what Jeremy has termed an ‘inappropriate training’. Though there were differences according to industry and size of firm, a growing proportion who inherited the top positions in larger companies had gone to private schools where they received for the most part a classical and liberal education. Of the minority who went on to university or college, an increasing proportion went to Oxford or Cambridge, which likewise were not oriented to business (let alone industry)⁸ By the late nineteenth century a divide was appearing between owners and family managers, who had an education fit for a ‘gentleman’, and other managers, who prided themselves on ‘practical’ training and experience rather than formal education. As Coleman has observed, a situation was evolving where ‘Training was for Players; Gentlemen were educated’.⁹ Overall, then, a smaller proportion of British managers were educated to college or university level than their counterparts in the United States, Germany, or even in the embryonic Japanese large firm, and very few had received any formal technical education.¹⁰

In Japan, the state realised the crucial importance of the relationship between higher education and economic development and recognised the need to develop Western technologies. The Meiji government inherited a small number of educational institutions and used these as the basis on which to develop a government educational system. In 1876, one of these became the Imperial University of Tokyo. This national university at first developed slowly because of financial problems, but by the mid-1880s other private colleges had been promoted offering courses in law, commerce, and foreign languages. By the early twentieth century, Japan had more than fifty educational institutes, both public and private.¹¹

Because of the discontinuity in production and commercial techniques between the Tokugawa and Meiji eras, Meiji entrepreneurs had to recruit talented managers conversant with Western techniques. Before the mid-1880s, modern industrial ventures were rare and unstable. Over the decade from the mid-1890s onwards, however, the number of factories w...

Table of contents

• Contents
• Tables and figures
• Contributors
• Preface
• Industrial training and technological innovation: an introduction
• Chapter 1 Industrial training in Britain and Japan: an overview
• Chapter 2 The development of engineering education and training in Britain and Japan
• Chapter 3 The fashioning of higher technical education in Britain: the case of Manchester, 1851–1914
• Chapter 4 ‘A certain short-sightedness’: metalworking, innovation, and apprenticeship, 1897–1939
• Chapter 5 Japanese technical manpower in industry, 1880–1930: a quantitative survey
• Chapter 6 The education of engineers in modern Japan: an historical perspective
• Chapter 7 In-firm training at Mitsubishi Nagasaki shipyard, 1884–1934
• Chapter 8 Technology and labour in a dual economy: from natural rubber to synthetic resin
• Chapter 9 The persistence of apprenticeship in Britain and its decline in the United States
• Chapter 10 Organisational capabilities in American industry: the rise and decline of managerial capitalism
• Index