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This is a preprint version of the article presented at the International Conference on
Business & Economics of the Hellenic Open University 2020 at June 27, 2020
Human resources development, educational needs, training, and
innovation: Facts from retail firms in the region of Eastern
Macedonia and Thrace
Dimos Chatzinikolaou
Department of Economics,
Democritus University of Thrace,
Komotini, Greece
Email: dimchatz@econ.duth.gr
Charis Vlados
Department of Economics,
Democritus University of Thrace,
Komotini, Greece
Email: cvlados@econ.duth.gr
Abstract
Innovation is a complex and systemic phenomenon that concerns multiple
organizational dimensions, one of which is the aspect of human resources. To this
end, most small firms in less developed business ecosystems appear to be facing
structural innovation problems, which also come from the human resources they can
employ and develop. This article aims to discuss how the retail firms in the Greek
region of Eastern Macedonia and Thrace perceive the issues of human resources
development, education, training, and innovation. It employs the results from a
questionnaire answered by a sample of 72 retail firms in this region, consisting of
Likert-scale questions and open-ended short answers. It uses the questionnaire to find
out the level of development and prospects of these firms over five years in the
aspects of human resources, education, and training in their effort to innovate. It finds
that these firms, although mostly small, desire to systematize their actions in these
areas, as all grades are on an upward “physiological” business trajectory. It concludes
that this field research could bear implications both for the level of innovation of the
specific firms and the less developed region as a whole.
Keywords
Human resources; Education; Training; Innovation; Eastern Macedonia and
Thrace; Less developed business ecosystem.
JEL codes: O15, M53, O32
1. Introduction
Especially in less developed local socio-economic systems, it seems that a positive
correlation should exist between better educated human resources and innovation
performance to enhance the overall socio-economic competitive potential (Uden et al.,
2017).
Socio-economic development has a parallel relationship with the ability of people
to learn (Hodge et al., 2016) that, in turn, is the result of a competitive national
educational system. Recent studies also highlight the correlation between
entrepreneurship training and innovation in small firms (Rosli & Mahmood, 2013)
and, more specifically, in weak localities (Diniz & Leitão, 2016). Both from the
“human capital theory” and the “human resources development” perspective, the
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This is a preprint version of the article presented at the International Conference on
Business & Economics of the Hellenic Open University 2020 at June 27, 2020
employees in an organization, irrespectively of the overall socio-economic system
that host the entrepreneurial activity, constitute “assets” that the firm must invest upon
(Nafukho et al., 2004).
Especially in the present times of crisis and global restructuring, it seems that firms
must invest systemically in training to improve their innovative capabilities (Diaz-
Fernandez et al., 2017). This need for investment in human capital derives mostly
from searching for more advanced strategic articulation (Akhtar et al., 2008), a
domain where small firms in less developed business ecosystems find it challenging
to improve (Vlados & Chatzinikolaou, 2019).
This paper presents field research conducted in such a less developed regional
business ecosystem: the Greek region of Eastern Macedonia and Thrace (rEMTH).
This region ranks among the least competitive regions in Europe (Annoni & Dijkstra,
2019; Boden et al., 2016) since it presents multiplier effects and specialization in
sectors with the slightest comparative value added (Vlados et al., 2019). The most
significant volume of production and value-added do not come from the tertiary
sector, which is also the most populous (Vlados et al., 2018).
With these developments in mind, this field research examines the extent to which
retail firms (“micro” firms mostly, that is, from one to five employees) in the region
“understand” some of the fundamental dimensions of human resources management
and development. The research signifies the level of education of human resources
and the initiatives undertaken by such firms to train their staff internally.
Therefore, this paper aims to present how some firms in a less developed business
ecosystem understand the need for training and education. The next sections will
present the conducted field research in a sample of firms in rEMTH by trying to
highlight, present, and interpret, in a first approach, the available facts. Finally, it is
worth noticing that this research discusses only some information based on the field
research, without aiming to suggest an overall explanatory framework.
2. Research framework
The research aimed to explore the perception of the respondent for the case under
analysis and identify their personal beliefs and appreciations. The analysis of the
research did not derive from any statistical means or other forms of quantification
(Baxter & Jack, 2008; Neergaard & Ulhøi, 2007) since it targeted to denote the ways
that the respondents deal with the subject. The sample of the research is 72 retail sales
firms in the region of Eastern Macedonia and Thrace without taking into account the
number of the employees they employ (Figure 1).
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This is a preprint version of the article presented at the International Conference on
Business & Economics of the Hellenic Open University 2020 at June 27, 2020
Figure 1: Research identity and profile of the respondents
From these seventy-two firms, 69.9% operates more than ten years, while 30.1%
from five to ten. The majority of these firms (52.2%) employ from one to five people,
while only 2.7% employs over 50 employees. The age of the business owner is mostly
at the class of “above fifty” (34.3%), while only 4.3% belongs at the 25-40 age scale.
The level of education of the business owner is mostly at the bachelor’s degree level
(40%), while 0% holds a Ph.D. degree. 77% of the business owners follow the career
path of entrepreneurship for more than ten years, while 23% follow the specific career
from five to ten years.
Concerning the profile of the firms (Figure 2), the regional capital unit of Rodopi
concentrates the vast majority (68.06%). The vast majority (20.83%) is also cafeterias
while in the “others” category, which means categories that appear for less than one
or two times, the percentage is at 34.72%. This statistic indicates a distribution in the
sample, which probably favors the quality of the information analyzed. Finally,
41.67% of these firms are single traders, something expected because they mostly
employ from one to five employees.
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This is a preprint version of the article presented at the International Conference on
Business & Economics of the Hellenic Open University 2020 at June 27, 2020
Figure 2: Research identity and profile of the firms
3. Questionnaire and research results
The questionnaire followed a Likert-type query method ranging from one to five in
three categories that also resulted in a short-form question of up to 100 words
(Batterton & Hale, 2017; Harpe, 2015). The descriptions of the grades were as
follows:
1) Very little
2) A little
3) Not too much, not too little
4) Quite much
5) Very much
Table 1 presents the first category of questions and average answers from the 72
sample firms on the subject of human resources.
Table 1: Human resources (A)
1. How important are the following characteristics for the better performance of an employee inside your
firm?
My today’s
appreciation
How I appreciated five
years ago
Change %
Age 3.64 3.57 2%
Experience 4.19 4.06 3%
Education 4.03 3.81 6%
Gender 2.76 2.76 0%
2. What are the major difficulties that a firm is facing in your sector (industry) in terms of human
resources?
High wage cost 3.76 3.22 17%
Insufficient specialization 3.91 3.29 19%
Work inexperience 3.85 3.71 4%
Overall negative working culture 4.49 4.38 2%
3. What reasons do you think made you change your views over the last five years concerning the human
resources you employ? In other words, what are the new conditions and challenges for your business that
contributed to changing your previous perception, and why?
The responses about the performance of an employee indicate a significant
increase except for the role of the gender. Practical experience matters most as it
receives the highest score over time. The most significant change occurs at the level
of education, although it was already high five years ago.
In terms of the difficulties the firm faces, the most significant change (19%) occurs
in inadequate specialization while the overall negative work culture occupies the
highest ratings five years ago and today.
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This is a preprint version of the article presented at the International Conference on
Business & Economics of the Hellenic Open University 2020 at June 27, 2020
Regarding the short answer on the problems that the business faces in these areas,
the following answers by some respondents are indicative of the trends:
–During the crisis, competition among firms increased due to the demanding
customers that seek to find the best quality for the price. Therefore, we had to
change our attitude and develop our staff. We need to make our employees
more specialized and friendlier when approaching the customer.
–Doing business is significantly more difficult in the absence of a certain degree
of specialization.
–One of the challenges that the business is facing is the financial crisis, which
forces us to be less concerned about the experience and education of the
employees and more about the high wage costs.
–The economic crisis has contributed to increased taxation and reduced business
turnover. Over time, we have come to realize that work experience is more
critical than education.
Table 2 below presents, respectively, the questions and averages in the field of
training and education.
Table 2: Training and education (B)
4. To what extent would you want the human resources of your firm to have more of the following forms of
training and education?
My today’s
appreciation
How I appreciated five
years ago
Change %
Sophisticated technical training 3.70 3.59 3%
Adequate and “fuller” general
education
3.77 3.61 4%
Training on the job 4.11 3.68 12%
Significant work experience
regardless of previous training
3.73 3.39 10%
5. To what extent do you think it would be interesting to develop your business knowledge in the following
directions?
Management techniques 4.00 3.79 5%
Sales techniques 4.08 3.67 11%
Customer care 4.08 3.75 9%
Business planning methods 4.29 3.79 13%
6. In what direction has the importance of training your businesspeople over the past five years moved and
why?
From the answers to the questions related to the skills and training required of an
employee, the most significant change (12%) is at the need for training at work. In the
past, employers demanded less work experience regardless of previous training, with
today’s trends being on the rise.
Concerning what is the most critical aspect for an entrepreneur to develop general
knowledge, the “business planning” stands out as it marks the highest current rating
(4.29) and the highest change (13%), respectively. The following responses are
indicative and reflect the overall trend:
–When we started the business, we did not think that the employees would need
much training. Now we believe that full training in the field is critical for every
worker. Our view is now different due to competition and that the customer has
more demands than previously.
–The direction we have given is that our business people need to be specialized.
Everyone has to know what to do and how to do it. The reason we have
changed over the last five years is that our customers are paying for the right
product and consistent quality.
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This is a preprint version of the article presented at the International Conference on
Business & Economics of the Hellenic Open University 2020 at June 27, 2020
–We think that the staff needs to be as trained as possible to make the most of
their potential. On the other hand, we allow employees to develop their work
skills to achieve our desired result.
–Our perception of the significance of training the people of our firm has
changed very little because we do not consider higher education an important
criterion, as our work requires no specific knowledge.
Finally, Table 3 presents the questions and averages in the field of innovation.
Table 3: Innovation (C)
My today’s appreciation How I appreciated 5 years ago Change %
7. How important do you think is innovation in achieving increased profitability by introducing new
operating methods and new services/products into your firm?
4.46 4.04 10%
8. To what extent do you think innovation is linked to adequately training your firm’s human resources?
4.04 3.79 7%
9. How have you shifted your view on the significance of innovation over the last five years, and why?
At the level of innovation, which means the introduction of new operating methods
and products, there is a shift from the already high 4.04 to 4.46. At the level of linking
innovation with human resource development, the value shifts from 3.79 to a high of
4.04.
Finally, concerning the short question, the following answers reflect the general
trend:
–We are living in a time when the pace of development in all sectors is rapid. In
this respect, innovation is a one-way street for a firm if it wants to achieve high
returns.
–Innovation for our firm in the last five years is crucial because it helps the
business run better.
–Our view on the importance of innovation has not shifted much because we
always considered it an essential component of a business. Effort and
experimentation have not ceased to exist, as it is true that innovation is the
application of new ways of solving old or new problems in ways that are more
efficient.
–We think innovation is critical in every business. The more innovative a firm
is, the better the earnings will be. The firm has to do what the customers desire;
otherwise, losses will occur.
–Our view of the importance of innovation in our firm over the last five years
has not changed. We think that the firm has to innovate to stay competitive in
the industry and increase its profitability.
5. Preliminary conclusions
In a first approach, the research results of these retail firms in the less developed
Greek region of Eastern Macedonia and Thrace highlight an overall desire for
systematization. All responses related to the perception of the business owner about
human resource development, education and training, and innovation show a rise over
the past five years. This fact is significant because it shows that although these firms
are de facto “inward-looking” and not “competitiveness-driven”—since the region as
a whole is lagging in innovational terms—they have a tendency to systematize their
skills.
A future study could combine these qualitative findings with how international
literature addresses and defines these issues posed by the questionnaire and what
criteria of success it sets. At the same time, by providing a larger sample of
representative business responses, we could also find critical minority responses that
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This is a preprint version of the article presented at the International Conference on
Business & Economics of the Hellenic Open University 2020 at June 27, 2020
would further confirm this systematic trend we find in the “human resources-
education/training-innovation” tri-pole. We could also enrich the research by
identifying in which areas these firms face structural insufficiencies, where they have
comparative advantages, and what policy could foster the innovation of this less-
developed regional business ecosystem.
Acknowledgment
We would like to express our gratitude to Dr. Andreas Andrikopoulos, Associate
Professor at the Department of Business Administration of the University of the
Aegean, who provided useful comments during the writing of this manuscript.
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