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This article focuses on the training requirements of small- and medium- sized enterprises (SMEs) and their employees. Such enterprises account for about two-thirds of employment in Australia. Nonetheless, expenditure on training per employee by small business typically is about one-half the average expenditure per capita for the whole of the private sector. The recent work by these two authors provides strong, empirical evidence that workers in SMEs receive far less formal training than their coevals in larger enterprises. This suggests that SMEs and their employees may be less well served by training policy measures which stress formal, vocational education and training structures.