INTRODUCTION
Research background
The Cultural & Creative Industries (CCI) has evolved from being an emerging concept in the 2000s to one of the fastest-growing economic sectors globally Initially recognized in developed countries, CCI has now established its significance and impact on the global economy.
According to the UNESCO and World Bank report (2021), the Creative and Cultural Industries (CCI) generate global sales of $2.25 trillion and exports exceeding $250 billion annually, providing jobs for around 30 million people worldwide, particularly benefiting those aged 15 to 29 more than any other sector In 2013, CCI accounted for 3% of the global GDP, a figure that has surged to 9% and is projected to reach 10% in the near future (EY, 2015).
Culture serves as the foundation of politics and society, with creativity at the core of humanity In today's economy, creativity is increasingly recognized as a vital source of competitive advantage Over the past twenty years, knowledge-based and technology-driven economies have emerged, shifting developed economies from service-based to knowledge-based models This transition highlights the importance of fostering creativity and innovation for industries and nations to gain a competitive edge Cultural and Creative Industries (CCI) play a crucial role in nurturing innovative ideas and growth opportunities, making them essential for the success of a knowledge-based economy Many countries are actively working to support their economies in this transition, recognizing the significant potential of CCI The rise of CCI has captured the attention of policymakers, culminating in the UN General Assembly's declaration of 2021 as the International Year of Creative Economy.
Sustainable Development In order to catch up with this trend, countries are trying to come up with policies to encourage and promote CCI
In September 2016, the Prime Minister approved Decision No 1755/QD-TTg on the Strategy for the development of Vietnam's cultural industries to 2020, with a vision to
By 2030, the Creative and Cultural Industries (CCI) will be officially recognized as a strategic development sector in Vietnam From 2012 to 2016, the cultural sector nearly doubled, with cultural industries contributing 2.68% to GDP in 2015 Following the implementation of the Strategy from 2016 to 2018, these industries generated approximately $8.081 billion in revenue, representing 3.61% of total GDP (General Statistics Office, 2022) In Hanoi alone, cultural industries generated US$1.49 billion in 2018, accounting for about 3.78% of the city's GRDP (Hanoi Party Committee, 2022) This data indicates significant growth, with modern creative industries dominating the sector while traditional cultural activities hold a smaller share Although CCI may not be the largest contributor to Vietnam's economic growth, it boasts the highest average growth rate among sectors and plays a vital role in driving demand across services, industry, and agriculture.
Vietnam's labor force currently falls short of the qualifications needed to support the growth of strong cultural industries Limitations in professional skills, foreign language proficiency, and business acumen hinder the potential of human resources in this sector, which primarily rely on quantity and low wages Additionally, the number of certified and degree-holding workers remains insufficient.
The Vietnamese government, through Prime Minister's Decision No 1755/QD-TTg on September 8, 2016, has prioritized the development of craft art as a key component of its "Strategy for Development of Vietnam's Cultural Industries to 2020, Vision to 2030." This sector is expected to play a pivotal role in boosting the economy and supporting the growth of other cultural industries As Vietnam undergoes industrialization and globalization, the emphasis on small-scale industries and traditional handicrafts is essential The international market continues to show a strong demand for Vietnamese handicrafts, with the craft sector experiencing an impressive average export growth rate of around ten percent annually in recent years.
In 2019, the country's export revenue saw a significant increase, with total handicraft exports amounting to $2.35 billion USD Key contributors included ceramic products, which generated $539 million USD, followed by rattan, bamboo, and sedge carpet products at $484 million USD, and embroidery and handwoven items contributing $139 million USD.
Resolution No 09-NQ/TU, issued by the Hanoi Party Committee on February 22, 2022, emphasizes the importance of developing highly qualified human resources as a crucial strategy for transforming Hanoi's cultural industry into a leading economic sector This initiative is part of a broader plan for cultural industry development from 2021 to 2025, with orientations extending to 2030 and a vision for 2045, particularly in the face of current climate change challenges.
Hanoi is home to 292 recognized craft villages, contributing to Vietnam's 4,757 traditional handicraft industries The region boasts a diverse business landscape, including 2,063 joint stock companies, 4,562 limited liability companies, 1,466 proprietorships, and 164 cooperatives, along with over 175,000 production and business households This vibrant sector employs more than 739,000 individuals, representing one-third of the country's craft villages The extensive network of craft villages, ranging from urban to rural areas, is enriched by numerous artisans and skilled workers, positioning Hanoi as a central hub for innovation and the promotion of creative product ideas.
Traditional craft villages employ around 20 million individuals, representing 24% of the rural workforce, yet 90.4% face labor shortages Only 30% of workers hold permanent positions, while 70% are seasonal, and merely 12.3% possess formal training Workers are categorized into two groups: irregular workers with minimal skills and regular, highly-skilled artisans in high-end production Vocational training is largely based on family tradition and hands-on experience, with a significant reliance on short-term classes for minors Additionally, many household business managers lack essential business acumen, jeopardizing the sustainability of craft villages.
Many traditional craft villages face a shortage of skilled artisans and stylists, leading to a lack of design diversity and competitiveness in the market As consumer aesthetic demands continue to rise, these villages struggle to meet expectations, resulting in stagnation rather than growth While they may be sustained in their current state, without innovation and improved training, traditional craft villages cannot flourish in comparison to domestic and international counterparts.
Research significance
In Vietnam, cultural and creative industries contribute just 3.61% to the GDP, with a labor rate of only 3.51% (Tap Chi Cong San, 2022) Experts attribute this low contribution to a significant shortage of human resources, underscoring the critical importance of developing talent in this sector.
In a highly competitive market, Hanoi's craft villages urgently require qualified human resources to drive product innovation and sustain competitive advantages However, these villages face a significant shortage of skilled workers Training and education emerge as crucial strategies for fostering sustainable development within these communities Despite this, there is a lack of empirical research to assess how these educational initiatives influence firms' ability to innovate and maintain their competitive edge.
Despite the recognition of humans as central to the Creative Cultural Industries (CCI), research on Human Resource Development (HRD) within this sector remains limited The importance of education and training for cultivating a skilled workforce is clear; however, the empirical link between education, training, and product innovation for competitive advantage in CCI is yet to be established Existing literature and legal documents often emphasize the role of skilled artisans, overlooking the impact of managers and firm owners This study aims to investigate how the education and training of managers and owners influence the product development process, addressing this critical gap in research.
5 product innovation and training will also be discussed, which make this research unique.
Research scope
This research explores the correlation between the education and training of managers and owners and the product development of firms, specifically in the craft villages of Bat Trang and Ha Thai in Hanoi Training is quantified by the frequency of training activities, while product development is assessed through strategic direction, external integration, development speed, planning processes, and target market identification.
Operationalization
Human resource development refers to "organized learning activities over a particular amount of time that improve the likelihood of job performance advancement" (Nadler and Nadler, 1989)
Innovation, as defined by the OECD (2005), involves the introduction of new or improved products, methods, instruments, or marketing strategies It should be understood as both a product and a process, representing an outcome and a mindset (Kahn, 2018) The outputs of innovation are driven by a process that is significantly influenced by a creative and innovative mindset.
Competitive advantage refers to a firm's ability to effectively sell its products and services within a specific market (Shabbir, 2015) It is established through a strategic management system that aligns with the innovation process, necessitating ongoing promotion, maintenance, and growth through various business strategies (Ciocanel and Pavelescu, 2015).
Sustainable Development, as outlined in the 1987 report "Our Common Future" by the World Commission on Environment and Development, refers to growth that meets current needs while ensuring that future generations can also fulfill their own requirements.
In 2015, the United Nations adopted the Sustainable Development Goals (SDGs), a global initiative aimed at eradicating poverty, safeguarding the planet, and ensuring prosperity and security for all by 2030 These seventeen interrelated goals highlight the interconnectedness of various sectors, emphasizing that progress in one area can influence outcomes in others, and that sustainable growth must harmonize social, economic, and environmental considerations (UNDP, 2018).
Human resource development for SDGs
In response to negative economic trends, organizations are increasingly focusing on strategies to enhance human resource participation The global economic crisis and the COVID-19 pandemic have underscored the importance of effective human capital management, as highlighted by Batarlien et al.
(2017), human resources are the most vital and valuable factors for business performance
Formal training involves structured classroom instruction led by a qualified trainer, often following a specific curriculum While it may provide a certification upon completion, participation requires trainees to pause their usual work activities to engage in the training sessions.
Informal learning is described as "primarily non - structured, experiential, and non- institutionalized" as people making sense of the experiences they meet while conducting their everyday job (Marsick & Volpe, 1999)
Formal education is a structured system of learning that is intentionally designed and implemented by both public and private organizations, forming a nation's educational framework Recognized by national educational institutions and collaborating organizations, formal education primarily encompasses basic education, while also including vocational training, special needs education, and certain adult education programs as integral components of the official education system (ISCED, 2011).
Research structure
This paper is organized as the following order
Chapter 1: Introduction The first section presents an introduction to the background, significance, scope, operationalization, and structure of the research
Chapter 2: Literature review The research contains keywords such as: Creative
The exploration of cultural industries reveals significant competitive advantages driven by innovation and training, as highlighted in previous studies However, these studies also exhibit limitations, leaving certain perspectives underexplored Addressing these gaps could enhance our understanding of the interplay between cultural industries and their broader economic impact.
Chapter 3: Data and Methodology In this chapter, the research design and methodology are introduced
Chapter 4: Data analysis In this part, the result of analyzing process and findings from testing the data and interviews are indicated
Chapter 5: Conclusion and discussion In this part, the findings and results are discussed Some implications and limitations of this research are also mentioned in this part
LITERATURE REVIEW
Creative Cultural Industries
The definition and scope of Cultural and Creative Industries (CCI) remain subjects of ongoing debate among researchers Cultural industries encompass not only traditional cultural realms but also cultural products and services, forming a significant sector known as cultural areas This sector is shaped by the intersection of media, information, and the arts, highlighting the importance of both cultural production and consumption that embody symbolic and expressive qualities Within these cultural sectors, a diverse landscape exists where large multinational corporations operate alongside numerous small and medium-sized enterprises.
The concept of creativity gained prominence among psychologists in the mid-twentieth century, but its significant rise between 1980 and 2010 was driven by management analysts and economists seeking the keys to innovation as a competitive advantage This led to a global trend favoring the development of creative industries, which encompass diverse sectors such as architecture, designer fashion, and film, with software also recognized as a high-growth area Despite the term 'culture' being perceived as abstract and complex, particularly in the UK, it became increasingly difficult for policymakers to oppose the notion of creativity, as it was viewed as a more palatable alternative The term "creative industries" now encapsulates a vast array of products and services generated by cultural sectors and those reliant on innovation.
The UK government refers to cultural industries as "creative industries," highlighting the importance of diverse models in understanding cultural production within the economy Six primary models are frequently utilized in research and policy discussions: the DCMS Model, Symbolic Texts Model, Concentric Circles Model, WIPO Copyright Model, UIS Model, and Americans for the Arts Model.
In Decision No 1755/QĐ-TTg, the Vietnamese Prime Minister outlines a strategy for the development of cultural industries (CCI) by 2020, which encompasses various sectors including advertising, architecture, entertainment software and games, craft arts, design, film, publishing, fashion, performing arts, fine arts, photography and exhibitions, television and radio, and cultural tourism This classification model serves as the framework for the current study on CCI.
According to Clause 2, Article 3 of Decree 52/2018/ND-CP, a craft village is defined as a locality, typically encompassing one or more residences in rural areas, where traditional business activities are carried out These villages are characterized by a majority of residents engaging in specific occupations that have been passed down through generations, reflecting a distinct cultural and ethnic identity Craft villages serve as hubs for handicraft production, where artisans and households specialize in traditional crafts, operating within a guild-like system of small to medium-sized businesses that produce similar goods.
Competitive – Innovation
The idea that human resources can give businesses a competitive edge is well-established, with foundational insights from researchers like Huselid (1995) and Pfeffer (1998) Effective human resource management strategies are recognized as key drivers of competitive advantage The concept of 'Human Resource Development' (HRD), introduced by Leonard Nadler at the 1969 Miami Conference of the American Society of Training and Development, further emphasizes the importance of investing in human capital for organizational success.
Human Resource Development (HRD) lacks a universally accepted definition, with Rao (1985) describing it as an ongoing process for businesses to assess and enhance the skills and knowledge of their workforce to meet current and future job demands According to researchers like Hassan (2007) and Potnuru and Sahoo (2016), HRD consists of three key components: training and development, organizational development, and career development This study focuses specifically on the training and development aspect of HRD.
According to Peters (1997), the business sector is trapped in a continuous cycle of instability, where ongoing innovation is crucial for survival for both individuals and companies Utterback (1994) emphasizes that successful businesses must regularly abandon past achievements to embrace innovation, even if it means sacrificing traditional advantages Therefore, innovation is vital for business success, requiring strategic decisions about resource allocation.
Innovation is recognized as a key driver of growth, with human capital being the most critical factor in the innovation process Firm-sponsored training can enhance human resources, leading to increased innovation (Dostie, 2018) While innovation typically requires highly skilled labor, organizations primarily focus on training to elevate employee skill levels Despite its importance in achieving innovation (Klein & Sorra, 1996; Klein et al., 2001; Marler et al., 2006; Sawang & Unsworth, 2011; Ballot & Taymaz, 1997), the relationship between innovation implementation and training actions remains underexplored in scientific literature Only a few recent studies have acknowledged training as a vital component of effective human resource management systems (Chen & Huang, 2009; Shipton et al., 2006), and there is a lack of research examining the direct impact of training on innovation.
While few scholars have integrated the principles of innovation studies into the creative industries, there remains a lack of systematic exploration between innovation and creative sectors This gap may be attributed to the dominant focus on aesthetic considerations and evaluative criteria within creative products.
Recent studies have explored aesthetic and content innovation through various research methodologies, with Stoneman (2007) presenting a notable case He highlights that while the creative industries may employ traditional technological innovations, they also exhibit distinct characteristics in their innovation processes Stoneman categorizes these aesthetic advancements as "soft innovation" and distinguishes between two types of this soft innovation.
Innovation in the creative industries, such as music, books, and films, often focuses on products that are primarily aesthetic in nature This innovation can involve the development of novel goods and unique production techniques, enhancing the overall artistic experience.
Innovation often emerges in sectors where the results may not be visually appealing but are highly functional, such as in automobile designs, culinary products, and electrical appliances Historically, the definition of a technological product or process (TPP) has focused on functionality, leading to a perception that such product differentiation lacks innovation However, Stoneman posits that many of these functional advancements should indeed be recognized as innovative activities.
Policymakers and scholars often overlook the innovation activities of creative businesses, as these processes are typically less structured than in high-tech industries Unlike high-tech sectors, specialized divisions or experts are uncommon, and innovation is usually integrated into product or project development or occurs during routine work Consequently, many innovations that arise during the development of new products remain unnoticed and unreplicated.
12 creative industries necessitate innovative solving issues, but the majority of novel solutions are unique
Organizational renewals, particularly product innovation, are crucial for firms aiming to thrive in today's economic landscape (Baumol, 2004; Danneels, 2002) As the first step in product life-cycle management, product innovation plays a vital role in determining product features and production costs, significantly impacting a company's competitive edge (Parry et al., 2009; Slack et al., 2006; Cooper and Chew, 1996) However, managing product development processes poses operational challenges (Krishnan and Ulrich, 2001) The inherent uncertainty in product innovation calls for continuous improvement cycles and a high degree of adaptability (Cooper, 1992).
Product innovation refers to the creation and execution of new or improved products, encompassing technical design, research and development, and marketing efforts (Nakata and Sivakumar, 1996; Alegre, 2006) This process is distinct from production and later stages of the product life cycle, characterized by high variability that complicates the prediction of outcomes and quality (Clark and Fujimoto, 1991) Consequently, product innovation processes are complex, necessitating adaptability and often incurring high costs per unit (Slack et al.).
In 2006, it was highlighted that systems of product innovation are crucial for industrial firms, emphasizing that the development of a new product involves more than just design It requires comprehensive strategies for manufacturing processes, factory layout, distribution, sales, and an integrated production and sales unit (Lofsten, 2014).
Product innovation plays a crucial role in driving future revenue for businesses, despite its inherent complexity and cost (Brown and Eisenhardt, 1995; Clark and Fujimoto, 1991) As competition intensifies and product lifespans shorten, the capacity to consistently deliver new product innovations has become essential for enhancing overall business performance.
Companies that quickly and effectively deliver products tailored to the needs and desires of their target consumers are more likely to gain a sustainable competitive advantage This strategic alignment with consumer expectations allows them to outperform their competitors in the marketplace.
1995) In the view of Freeman (1982), product innovation entails the technical design, which is R&D, manufacturing, management, and commercial operations associated with the promotion of a novel (or enhanced) product
Product innovations require the successful execution of several complex processes, including research, design, construction, production, and advertising (Betz, 1993; Freeman, 1982) Each phase is fraught with uncertainty, such as whether research will generate new ideas, if technological designs can be developed from those ideas, the feasibility of manufacturing the design financially, and whether consumers will accept the new products (Allen, 1985; Souder and Moenaert, 1992; Parthasarthi & Hammarstedt, 2002).
Training and Innovation
Baldwin and Johnson (1996) highlight the strong link between education, labor skills, and innovation, while Bauernschuster, Falck, and Heblich (2009) emphasize that ongoing training provides access to the latest knowledge, thereby enhancing a company's innovation potential Their research demonstrates that company-sponsored training significantly boosts innovation Sung and Choi (2014) argue that investments in training foster a culture of continuous learning, which encourages creativity and the generation of new ideas (Lau and Ngo, 2004; Bring, 2017) Kaloudis et al (2008) and Naess et al (2009) also identify a notable connection between training activities and innovation efforts in Norway and the EU Furthermore, Demirkan, Srinivasan, and Nand (2022) assert that employee training is essential for developing the skills necessary for new product development (Hatch and Dyer, 2004; Beugelsdijk, 2008) The OECD (2011) states that on-the-job training enhances businesses' technological capabilities, positively correlating with innovation Lastly, Neirotti and Paolucci (2013) conclude that training is a crucial predictor of innovation, facilitating the assimilation of new external information.
The initial empirical findings on the relationship between training and innovation reveal notable limitations, particularly in failing to differentiate between formal (classroom) and informal (on-the-job) training Formal education typically focuses on general skills, while on-the-job training emphasizes specific skills, each having unique impacts on efficiency Research shows that the extent of on-the-job training offered by companies often surpasses that of formal training, highlighting the need for a clearer understanding of these training types and their effects on organizational performance.
17 classroom training (Pischke, 2005), and therefore may have a bigger effect on a business's ability to innovate
In 1992, Watkins and Marsick proposed a theory of learning in businesses that distinguishes between formal and informal learning While many scholars have categorized informal learning in contrast to formal learning, a universally accepted definition remains elusive (Clarke, 2004) Informal learning is characterized as a spontaneous and unstructured process that occurs outside traditional educational settings.
Informal learning is primarily non-structured and experiential, occurring outside formal educational settings, as individuals interpret their daily work activities In contrast to structured, instructor-led formal learning, informal learning arises from personal experiences and interactions in the workplace Workers actively pursue informal learning, either individually or collaboratively, to gain the knowledge and skills needed to achieve both personal and organizational objectives.
Increased training leads to enhanced product and process innovation, with both informal and formal training playing crucial roles; however, this impact tends to decline over time (Dostie, 2018) Dostie also highlights that on-the-job training is equally effective as classroom training for various types of innovation Formal education often fails to meet the specific needs of individual workers and struggles to keep pace with rapidly changing competency requirements In contrast, informal training allows employees to choose when and what they learn, resulting in documented benefits such as improved efficiency, cost savings for companies, and enhanced employee skills (Dale & Bell, 1999; Ellinger & Cseh, 2007; Leslie et al., 1998; Berg & Chyung, 2008; Jeon & Kim, 2012) This adaptability is particularly vital in an era of shifting job demands and digitalization.
Informal training is essential for helping personnel develop the skills necessary for their job duties and ensuring long-term employability (Froehlich et al., 2014; Kyndt & Beausaert, 2017) According to Nazarov and Akhmedjonov (2012), increased investment in education does not guarantee improvements in a firm's innovation capacity Instead, on-the-job training plays a vital role in enhancing this capability The researchers argue that in transitioning markets, formal higher education is not the main driver of innovation; rather, it is the training provided by companies that fosters innovation.
Over the past few decades, organizations have predominantly focused on sending managers to formal educational courses, including conferences, seminars, and online training, to enhance their management skills Historically, significant resources for business growth have been allocated to formal learning initiatives.
Many businesses and HRD professionals believe that investing in formal training leads to improved management efficiency and increased profits (Bassi & Van Burren, 1999) However, critics argue that such programs often fail to adequately prepare managers for the evolving workplace and do not provide sufficient practical experience (Hartley, 2000; Sheckley & Keeton, 1999) This reliance on formal training may risk eroding competitive advantage if managers struggle to apply their learned skills Additionally, an overfocus on formal training can undermine the value of informal learning opportunities that enhance managerial competence Conversely, informal learning can also be detrimental if it results in the adoption of incorrect practices (Dale & Bell, 1999).
The findings suggest that formal learning is not ineffective; rather, combining formal and informal training maximizes developmental benefits Researchers recommend that managers strike a careful balance between these two training types in their planning systems Individual training in the workplace thrives on the continuous interaction of both formal and informal methods.
Integrating formal and informal learning is essential for developing competence, as neither type alone is sufficient Research indicates that effective learning combines the structured knowledge acquired through formal education with the practical insights gained from informal experiences This holistic approach enhances overall skill development and understanding.
Research by Rowden (2002) and Westbrook and Veale (2001) indicates that individuals with higher levels of formal education and training engage more in self-directed learning activities This suggests that those with substantial professional expertise are likely to enhance and support informal learning initiatives more effectively.
Formal learning can enhance informal learning, as the skills and methods gained from structured educational courses help individuals better integrate informal learning experiences in the workplace.
Research by Rowden and Conine (2005) and others indicates that workplace learning is often linked to various events Formal learning enhances problem-solving and self-directed learning skills, which are essential for thriving in challenging work environments (Brockman & Dirk, 2006; Burns et al., 2005) Additionally, it boosts individuals' capacity and motivation for independent learning (Lohman, 2003).
H1: Managers’ informal training has positive impact on product development process of firms
H2: Managers’ formal training has positive impact on product development process of firms
2.3.2 Small-medium enterprises and household businesses context
Despite signs of growing consolidation in the sector, small, independent family businesses remain the dominant structure Training and development are crucial for achieving high efficiency (Bryan, 2006) Additionally, Storey (1995) noted that certain HRD initiatives tend to be more sustainable once implemented in smaller organizations.
The challenges and needs of small businesses are significant, highlighting the importance of initiatives aimed at their support Leonard Nader emphasized in 1970 the critical issue of fostering human resource growth in small enterprises (Walton, 1999) Research has consistently shown that innovation is essential for the survival and success of small businesses (Acs and Audretsch, 1988; Verhees and Meulenberg, 2004; De Massiss et al., 2018) To effectively compete with larger, established companies, small businesses must prioritize maintaining their innovative edge (Rosenbusch et al., 2011).
Education and innovation
Education, training, and hands-on experience are essential for administrators to enhance their skills and understanding Practical experience, often referred to as "learning by doing," allows leaders to develop new expertise through real-world tasks According to Porter et al (1975), the expectancy hypothesis suggests that individuals are motivated by expected outcomes based on their past experiences with specific tasks and the results achieved.
According to Kenney et al (1979), training targets are closely linked to workplace behavior, making them more efficient to achieve compared to learning goals, which require more time As a result, training is often job-centered, focusing on specific workplace techniques and company processes In contrast, person-centered learning emphasizes individual development, offering broader educational lessons that are more theoretical, aimed at enhancing analytical and critical thinking skills.
Innovation is influenced by two types of knowledge: explicit and tacit, with the latter being crucial due to its complex nature that cannot be easily acquired or conveyed (Cavusgil et al., 2003; Polanyi, 1962, 1966; Nonaka, 1991; Nonaka & Takeuchi, 1995) Dulaimi (2005) emphasizes that hands-on training surpasses traditional academic education in effectiveness Furthermore, Watson (2006) asserts that technological advancements in education enhance innovative capabilities Research indicates a strong link between education and innovative performance (Nazarov & Akhmedjonov, 2012; Sozbilir, 2018), supporting the notion that education positively influences innovation outcomes (Frosch, 2011).
The hypothesis that follows was devised to determine whether or not education influences PDP
H3: Managers’ education has positive impact on product development process of firms
H4: Integration of managers’ training and education improves the product development process of firms
DATA COLLECTION AND RESEARCH DESIGN
Research Design
This research established a model with one dependent variable (DevP), three independent variables (Inf_T, F_T, Edu) and three control variables (Sec, Exp, Size)
Table 3.1 Variables – Definition and measurement
Inf_T measures the frequency of informal training that an owner or manager engages in to acquire new skills or knowledge at work This variable is based on an eight-item scale developed by Lohman in 2005.
Variable Definition and Measurement five-point response frequently scale (1= Never, 2= Rarely, 3 Sometime, 4= Often, 5= Always)
The variable F_T indicates the frequency of formal training that owners or managers pursue when they need to acquire new skills or knowledge for their work This is measured using a five-point scale, where responses range from 1 (Never) to 5 (Always).
DevP This variable is represented for the average product development process of firms
SD This variable measures the strategic direction of firm with regard to new technology application, talent recruit and workers collaboration
TM This variable is represented for the extent to which target market and potential customers are defined
Pla This variable measures the product development planning process of firm with regard to production quantity, time and design
This variable assesses the degree of a firm's operational relevance to external stakeholders, including suppliers and customers, through effective communication, collaboration, and coordinated efforts Responses are rated on a scale from 1 (strongly disagree) to 5 (strongly agree).
Spe This is the average new product development time of firm
Sec The village firm operates This variable takes the value 1 if the village is Bat Trang and takes the value 0 if village is Ha Thai
Edu This variable indicates the job-related educational experience at educational institutions such as vocational school and university of owner/manager measured by dummy variable
Exp This variable is represented for the number of years that the managers/owners work in this sector
Size This variable is represented for the number of employee in this firm
3.1.3 Research objectives and research questions
Understand the training and education situation of firms managers in craft villages
Analyze the connection between managers‘ training (particularly formal and informal training) and education and product development process
Research Question 1: How does managers' education affect the product development process of firms in craft villages?
Research Question 2: How does managers' training affect the product development process of firms in craft villages?
How does formal training affect the product development process of firms?
How does informal training affect the product development process of firms?
Research Question 3: Does integration of managers‘ training and education improve the product development process of firms?
Model for testing the hypotheses is as follow:
Hypothesis 1: Managers’ informal training has positive impact on product development process of firms in craft villages
Hypothesis 2: Managers’ formal training has positive impact on product development process of firms in craft villages
Hypothesis 3: Managers’ formal education has positive impact on product development process of firms in craft villages
Hypothesis 4: Integration of managers’ training and education improves the product development process of firms
Research Methodology
Mixed methods research is particularly suited for complex social science studies, as it combines qualitative and quantitative approaches to provide a more comprehensive understanding of research problems (Cresswell, 2009) This study employed an explanatory sequential mixed methods design, consisting of two phases: first, surveys were conducted to collect data on the training and education of firm administrators and their influence on product development; second, in-depth interviews were used to elaborate on the quantitative findings The main goal of this sequential explanatory design is to link quantitative results with qualitative insights (Cresswell, 2018) While this approach is straightforward to implement due to its staged process, a notable limitation is the time required to gather data across two distinct phases (Cresswell, 2009).
Bat Trang village, one of Vietnam's oldest and most renowned pottery villages, boasts a rich history in traditional craftsmanship It is celebrated for its high-quality ceramic products that cater to both domestic and international markets In recent years, Bat Trang has also emerged as a popular tourist destination, drawing visitors eager to explore its unique artistic heritage.
Ha Thai village is renowned for its lacquer products and is one of only two traditional handicraft villages in Vietnam recognized by the Japan International Cooperation Agency (JICA) as a key player in sustainable craft development since 2010 This recognition stems from the village's commitment to preserving both the material and cultural values of its crafts With approximately 7 companies, 35 production facilities, and 250 households involved in creating worship products, handicrafts, and home decorations, Ha Thai generates an average annual revenue of 150-200 million VND per household, amounting to a total revenue of 20 to over 30 billion VND for the village Notably, 70% of this revenue comes from international markets, while 30% is from domestic sales The lacquer industry in Ha Thai has also provided employment for over 4,000 workers in recent years.
Case studies are essential for identifying effective strategies to tackle complex real-world issues (White et al., 2013) According to Barnes (1960), the case-history method is a key aspect of modern sociological anthropology The case studies of Bat Trang and Ha Thai exemplify the training and education of managers, highlighting the current state of business administrator training while also addressing the challenges and obstacles faced in implementing such educational programs.
This research focused on the owners and managers of small and medium-sized enterprises (SMEs) and household businesses within craft villages A non-probability sampling method was employed, utilizing both purposive and snowball sampling techniques In the snowball sampling process, participants were encouraged to refer additional individuals who are also part of the target group.
The survey, conducted onsite using a paper-based questionnaire in Vietnamese to accommodate the limited English proficiency of firm owners and managers, aimed to gather data on the frequency of informal and formal training as well as the product development processes within firms The questionnaire, which was carefully translated from English to Vietnamese and back to English, included three primary sections: the frequency of informal training, the frequency of formal training, and the product development process, utilizing Likert-scale questions for accurate measurement.
In-depth onsite interviews were carried out with owners and managers of firms to gather detailed insights that complemented the quantitative findings The semi-structured interview format proved to be ideal for exploring the complexities of training implementation in traditional craft villages These interviews were conducted in Vietnamese and later translated into English for analysis.
After successfully collecting and calculating the data, the author use Stata software 16 to analyze the correlation between all variables and run the regression models
To enhance the clarity of the collected data, the author integrates interview interpretations with narrative excerpts While adhering to a structured interview guide featuring open-ended questions, spontaneous insights often emerge The recorded interviews are transcribed and incorporated into a data set, with respondents' and companies' identities encoded to maintain confidentiality and transparency.
FINDINGS
Training and education situation of managers in craft villages
Table 4.1 Training and education situation of managers
1.2 Receive training from peers, family or instructors 81
1.3 Trial and errors / Reflect on your actions 92
2.1 Attend an external training program in the training center
2.2 Attend an internal training program 11
2.3 Attend job-specific seminar/workshop 7
2.4 Attend a training program through online course 2
3.1 Attended job-related course in vocational school 6
3.2 Pursuing a degree with a job-related major 14
In craft villages, education and training predominantly occur through traditional or informal apprenticeship systems, which are mainly limited to handicrafts This type of training often lacks the integration of technological advancements and business growth, focusing instead on the transmission of skills and knowledge from experienced artisans to apprentices.
Traditional crafts are often passed down through generations within families or groups, relying heavily on word of mouth for their transmission This informal training is accessible to individuals outside of familial connections, highlighting a long-standing practice that has existed for thousands of years The vocational skills acquired through this method are largely unstructured and experiential, emphasizing the importance of hands-on learning in traditional craftsmanship.
A recent survey revealed that 95% of respondents learn new skills by observing others, highlighting the effectiveness of observational learning Additionally, 92% of participants reported using "trial and error" as a self-learning method, underscoring its popularity While collaborative training methods like "talking with others" also received significant support, the more focused approach of "collaborating with others" was noted by only 41% of respondents These training methods are particularly beneficial for beginners, as they help establish foundational skills.
Informal training in craft villages often involves coaching from peers, family members, or instructors, typically without a formal certification The specifics of training can vary significantly based on the trainer, with programs sometimes adhering to regional standards in format and duration, often established through agreements between local business patrons and learners Generally, this training is work-based and may follow a loose training plan Peer-led training usually consists of observe-and-repeat methods, lasting one to two weeks, while family-based training often starts in early childhood, allowing trainees to gradually acquire skills through observation and participation in chores.
The study revealed a significant lack of formal training opportunities, such as internal or external programs, online courses, and workshops External training centers typically offer specialized hard skills, like drawing, over basic skills, with courses lasting 3-5 months and incurring tuition fees Internal training programs, available to only 11% of respondents, focus on specific skills relevant to the organization rather than fundamental skills This scarcity of training options is largely attributed to limited human resources within firms.
In craft villages, opportunities for professional development such as job-specific seminars and online training programs are infrequent due to a lack of available workshops, language and information barriers, and the age demographics of trainees Most participants in these online courses and seminars tend to be between 25 and 34 years old, highlighting the need for more accessible educational resources to enhance labor market mobility.
Only a small percentage of individuals pursue education beyond high school, with 6% attending vocational schools and 14% earning degrees in job-related fields Interestingly, those over 50 years old are more likely to have attended vocational schools, while younger individuals under 40 typically opt for bachelor’s degrees Older respondents shared that they attended vocational schools 20-30 years ago when these institutions offered highly skilled instructors, relevant curricula, and strong job prospects In contrast, modern vocational schools struggle to adapt to rapid market changes and the increasing accessibility of bachelor’s degrees, contributing to the decline of vocational education.
Results from survey
In this section, the author employs descriptive analysis to present the collected data, as detailed in Table 4.1 This table offers a statistical overview of the model's variables, highlighting key metrics such as the number of observations, mean, standard deviation, minimum value, and maximum value for each variable.
Variable Obs Mean Std Dev Min Max
4.2.2 Valid test with factor analysis
This study employed principal component analysis for dimension reduction, utilizing varimax rotation and suppressing small coefficients with an absolute value below a specified threshold Additionally, the results include the KMO and Bartlett's test of sphericity.
Table 4.4 Validity test for independent variables Inf_T
Sig (Bartlett's test of Sphericity) 0.077
Table 4.5 Rotated Components for independent variables Inf_T
The KMO value of 0.502, exceeding the threshold of 0.5, along with a Bartlett's Test significance value of 0.077, which is below 0.1, indicates that the data is appropriate for factor analysis.
Table 4.6 Validity test for independent variables F_T
Sig (Bartlett's test of Sphericity) 0.001
Table 4.7 Rotated Components for independent variables F_T
The KMO value of 0.557, exceeding the 0.5 threshold, along with a Bartlett's Test significance value of 0.001, indicates that the data is appropriate for factor analysis.
Table 4.8 Validity test for dependent variables DevP
Sig (Bartlett's test of Sphericity) 0.000
The validity test for five indicators of DevP, including SD, TM, Pla, Spe, and Ext, revealed that the relevance and explained result for Ext was low, leading to its removal from the test.
The KMO value of 0.642, as shown in Table 4.3, exceeds the threshold of 0.5, indicating the data's appropriateness for factor analysis Additionally, Bartlett's Test yields a significance value of 0.000, which is less than 0.01, further confirming the suitability of the data for this analysis.
Table 4.9 Rotated Components for dependent variables DevP
A Pearson correlation analysis was performed to evaluate the relationships between the variables The correlation coefficient ranges from -1 to +1, with values closer to +1 indicating a stronger correlation among the variables.
The analysis reveals a strong linear correlation between the independent variable Edu and the dependent variable DevP, with statistically significant correlation coefficients (p|t| [95% Conf Interval]
Table 4.13 One-tailed test results
Hypothesis 4 is that the integration of training and education improves product development process The result can be seen in Table 4.11 and 4.12 as above The null hypothesis to be tested in the regression analysis is the coefficient of Edu and DevP equals zero or negative, the null hypothesis is rejected at a 5% level The upper 5% point and the coefficients of Edu with DevP are significantly positive at a 5% level This means that the integration of training and education improves product development Thereby this result supports hypothesis 4 However, Inf_T has no significance effect on DevP when considering with interactive terms although their relationship is significance without interactive term
The combination of education and informal training (Edu x Inf_T) significantly impacts personal development practices (PDP) with a significance level of 0.0165 In contrast, the effects of education combined with formal training (Edu x F_T) and formal training alone (F_T) on PDP are relatively weak This notable significance may be attributed to the small sample size of the data used in the analysis.
Results from interviews
A total of 21 in-depth interviews were conducted with managers and owners of craft village firms, yielding insights categorized into three key areas: the impact of training and education on product innovation, the necessity of integrating both training and education for effective product development, and the challenges faced in implementing training within craft villages The findings reveal common advantages and drawbacks, alongside shared challenges related to these processes.
Table 4.14 Demographic characteristics of interview participants
ID Village Gender Age Experience
4.3.1 Effect of training and education on product innovation development
Product development process in craft villages is normally designed solely by the owners/managers Therefore, owners/managers should have both practical production
43 skills as well as management skills This part will examine both types of skills transmitted through training and education
Informal training is favored for its numerous benefits, including enhanced productivity, reduced organizational costs, and improved individual skills Participants in interviews noted that it allows for faster learning, direct practice, and time savings By absorbing tips from trainers, learners can sidestep common mistakes Given the practical demands of craft village production, informal training is essential for developing the necessary knowledge and skills It significantly boosts the chances of promotion from unskilled to skilled positions and leads to higher wages in small businesses compared to informal employment without training Mastery in crafts and the ability to establish or acquire a business in these fields often require years of experience and training (Aggarwal et al., 2010; Nübler et al., 2009) Combining informal and traditional training with current skill requirements and work procedures enhances the employability of trainees in the informal sector For school dropouts, informal training often serves as the sole pathway to vocational skills (Walther, 2011).
Informal training effectively communicates the significance and value of cultural products, which possess unique symbolic meanings compared to other industries While the core concept remains consistent, individual perceptions of a product's symbolism vary greatly This personal interpretation is fundamental to driving product innovation.
Business households in craft villages often possess unique trade secrets, particularly in their techniques for blending colors, textures, and materials, which contribute to the distinctiveness and competitiveness of their products Respondents believe that informal training is essential for learners to acquire the specialized skills necessary to maintain these unique qualities.
44 product attributes Additionally, informal training is stated to enable trainees to quickly reach the real-world marketplace and comprehend customer requirements
During the interviews, respondents infrequently mentioned formal training in management skills like target market identification or planning processes, instead focusing primarily on specific production stage skills It was revealed that management skills are often acquired informally through observation and conversations, relying heavily on personal experience Additionally, interviewees indicated a tendency to adhere to traditional business methods while gradually accumulating experience, a process fraught with uncertainty and a lack of clear market strategy understanding.
Formal training courses at training centers are essential for developing advanced skills tailored to specific stages of the production process In Bat Trang village, for instance, drawing is recognized as a crucial hard skill for pottery production These drawing courses equip students with the ability to create innovative designs and products Typically self-organized and led by experienced artisans, these courses provide learners with valuable hands-on experience Moreover, their accessibility ensures that anyone interested can participate in these enriching learning opportunities.
Internal training courses offered by companies prioritize firm-specific skills over basic competencies, making them exclusive to employees These courses are customized to reflect the unique characteristics of the company's environment and product traits, enabling learners to swiftly acclimate to the internal setting.
Regarding the management skills or market strategies, respondents said that formal training has no clear effects, since formal training often focus on practical skills of production stages
Younger managers in craft villages tend to possess higher education levels, often holding bachelor's or vocational degrees related to traditional professions This educational background plays a crucial role in driving innovation within their firms.
Training within the formal education system offers learners foundational knowledge and insights into the industry, particularly through academic education This type of education equips trainees with essential analytical skills to understand the broader market dynamics Notably, most interviewees with academic qualifications emphasize that the ability to learn effectively is the most vital skill to acquire.
Interviewees highlighted that their education significantly shortens the development time for new products Furthermore, they emphasized that the planning process for new product realization is usually thorough and well-structured.
“Although the time spent to create a product doesn't really become any shorter,
I spend a lot of time concentrating on intricate and distinctive product design
As a result, there are more stages involved in producing a new product, but each step takes less time overall.” (Interviewee ID19)
4.3.2 Is the integration of both training and education necessary for product development?
The opinion about integration clearly divided into 2 sides: supporters and opponents The approval and disapproval ratings were not excessively distinct, with fifty seven and forty three percent respectively
Supporters believe that formal education lays the groundwork for trainees to enhance their learning abilities, thereby promoting effective learning While training equips learners with essential practical skills necessary for job performance, business owners and managers seeking to innovate and expand require a robust foundation for sustainable growth The advantages of formal education can be categorized into two key areas: production skills and management skills.
Job-related education equips learners with essential production skills, enabling them to utilize the latest technology for creating high-quality, innovative products and materials Additionally, fine arts graduates possess superior aesthetic judgment and art product evaluation skills compared to those without formal education.
Traditional apprenticeships offer a cost-effective way to share skills, but they are insufficient in today's context Engaging in formal education allows craftsmen to deepen their knowledge of pottery and art, enhancing their aesthetic sensibility and enabling the creation of more beautiful designs.
Studying architecture at university enabled me to develop materials and designs that are more resilient to forces and temperatures compared to those used in my father's time, who only had on-the-job training.
Encouraging children to pursue higher education is crucial, as traditional apprenticeships alone do not provide sufficient knowledge The wisdom passed down through generations is limited, highlighting the need for research and discovery of new information Attending college establishes a solid foundation of formal knowledge, which is essential for effective informal learning and personal development.