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This paper looks at a study carried out among 80 small and medium sized enterprises (SMEs) in two Canadian cities, Montreal and Winnipeg, based on a survey and case studies, which show the importance of innovation among Canadian SMEs. These innovations in turn create new demands for skill development, both through formal training and in informal activities. The outcomes of the study show two significant trends. First, an uneven development of learning activities among SMEs is related not only to the size of firms, but also to their orientation towards innovation and shared productivity measures. Second, because they do not have enough internal resources and flexibility to drive productivity growth through learning and training by themselves, SMEs need some form of group based mechanisms to solve this structural problem. However, it is noted that participation of unskilled employees in both formal and informal learning remains an important challenge for the great majority of SMEs.

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