The European Commission (EC) is anxious to increase the innovation, and hence the competitiveness, of small and medium-sized enterprises (SMEs) in the depressed regions of the European Union (EU). To this end, the EC funds education and training for these firms, arguing that education and training will produce the desired innovation. In the north of England, the Yorkshire and Humberside Universities' Association (YHUA) was entrusted to provide appropriate education and training for the region's SMEs. In the year 2000, the YHUA asked the authors to analyse the effectiveness of this provision. The analysis concluded that the universities providing education and training services benefited from the scheme, rather than the participating SMEs. This article stands back from the basic analysis and considers why this was so.
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