Even successful firms can become complacent, learn too little,and eventually fail.

Byline: Dylan JONES-EVANS 

IAM being joined in my quest to develop a major centre for entrepreneurship research at Newi by Dr So Jin Yoo,a brilliant researcher from South Korea, who specialises in the study of high technology entrepreneurship.

Working closely with universities in the Far East, we are developing a new theory of learning within organisations through detailed research into the most innovative high technology small firms within the South Korean economy (which will grow by an estimated 5.4% this year).

I hope this work will,over the next few months,develop a greater understanding of the importance of learning within smaller firms that will not only change the way we think about innovation within these ventures, but will also prove to be of enormous practical benefit to the competitiveness of businesses in North Wales.

The main reason for undertaking this particular type of study is very simple.

As many managers of North Wales firms know, within an increasingly complex business environment driven by changes in technology, competition, regulation and customer needs, organisations need to find new ways by which they can anticipate change.

Therefore, the ways in which organisations learn (and thus continuously adapt and change) has captured the imagination of many progressive managers who are trying to understand the increasingly chaotic environment in which their businesses exist and operate.

Perhaps the most interesting aspect of Dr Yoo's work relates to the barriers to learning that may exist within any organisation.

In particular, early detection and elimination of the factors that hold back learning within businesses is equally as important as developing the environment in which learning can occur.

For example, a culture that em phasises risk-taking,openness in communication and teamwork,and that ensures that these values are shared and rewarded throughout the firm, will facilitate greater learning and lead to better company performance.

On the other hand,if the values of the organisation do not support and promote openness to accessing knowledge from other sources outside the firm, then learning can be impeded by such a narrowly focused organisational culture.

Therefore,for Welsh businesses,perhaps one of the major barriers to learning is that of organisational inertia.

Many businesses find change a difficult process and often resist change even when they are threatened with extinction because previous actions have `worked well in the past'.As a result,even successful firms can become complacent, learn too little,and eventually fail.

Research has shown that greater organisational learning leads to improvements in performance, especially with regard to the development and launch of new products.

This is because product development involves the firm's ability to adapt to changing conditions and opportunities in the environment.

As a result,firms need to develop ways in which they are constantly scanning the environment in order to improve their development of new products and processes.

Perhaps there is a role for bodies such as the Welsh Development Agency to create a `knowledge centre' containing sources of information from which business can access the right type of information about their technology or market cheaply and quickly.