(Luận văn thạc sĩ) human resource development in cultural creative industries case study of craft villages in hanoi, vietnam

INTRODUCTION

Research background

The Cultural and Creative Industries (CCI) have evolved from being a novel concept in the 2000s to a significant economic force globally Initially recognized as an emerging trend in developed nations, CCI has now established itself as one of the fastest-growing sectors in the world 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, with a significant focus on those aged 15 to 29 In 2013, CCI accounted for 3% of the world's GDP, a figure that rapidly rose to 9% and is projected to reach 10% in the near future (EY, 2015).

Culture serves as the foundation of politics and society, placing humanity at its core Creativity, a fundamental aspect of human nature, manifests in diverse ways within individuals In today's economy, it has become a crucial source of competitive advantage Over the past two decades, knowledge-based and technology-driven economies have emerged, marking a shift from service-based to knowledge-based economies This transition emphasizes the importance of fostering creativity and innovation for industries and nations to gain a competitive edge The Cultural and Creative Industries (CCI) provide an ideal environment for nurturing innovative ideas and facilitating growth Consequently, CCI plays a vital role in the success of a knowledge-based economy, prompting many countries to actively support their transition to this sector The significant growth of CCI in recent years has captured the attention of policymakers, leading to 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, Creative and Cultural Industries (CCI) will be officially recognized as a strategic development sector in Vietnam, highlighting its significance in legal documentation From 2012 to 2016, the cultural sector in Vietnam 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 $8.08 billion in revenue, representing 3.61% of total GDP (General Statistics Office, 2022) In Hanoi alone, cultural industries generated $1.49 billion in 2018, accounting for about 3.78% of the city's GRDP (Hanoi Party Committee, 2022) While modern creative industries dominate, traditional cultural activities play a smaller role Although CCI may not be the largest contributor to Vietnam's economic growth, it boasts the highest average growth rate among various sectors, significantly boosting demand across services, industry, and agriculture.

Vietnam's labor force is currently insufficient to support the growth of its cultural industries, primarily due to a lack of professional qualifications and foreign language skills While the workforce offers advantages in terms of quantity and low wages, the number of certified and degreed professionals remains limited, hindering the industry's potential for development.

Prime Minister's Decision No 1755/QD-TTg, issued on September 8, 2016, emphasizes the importance of developing craft art as a key component of Vietnam's cultural industries, with a vision extending to 2030 This sector is expected to play a significant role in driving economic growth and supporting the expansion of other cultural industries As Vietnam undergoes industrialization, modernization, and globalization, the development of small-scale industries, arts, crafts, and trade groups becomes increasingly vital Vietnamese traditional handicrafts are highly sought after in the international market, and the craft sector has demonstrated impressive export growth, averaging around ten percent annually in recent years.

In 2019, the country's export revenue saw a significant increase, with total handicraft exports reaching $2.35 billion USD Key contributors included ceramic products at $539 million USD, rattan, bamboo, and sedge carpets at $484 million USD, and embroidery and handwoven items at $139 million USD.

Resolution No 09-NQ/TU, issued by the Hanoi Party Committee on February 22, 2022, emphasizes the importance of developing human resources, particularly highly qualified personnel, as a crucial strategy for transforming Hanoi's cultural industry into a leading economic sector This initiative is set against the backdrop of current climate change challenges and outlines a vision for the cultural industry's growth from 2021 to 2025, with further orientation towards 2030 and a long-term perspective extending to 2045.

Hanoi is home to 292 recognized craft villages, contributing to Vietnam's total of 4,757 traditional handicraft industries The craft sector includes 2,063 joint stock companies, 4,562 limited liability companies, 1,466 proprietors, and 164 cooperatives, alongside over 175,000 production and business households This vibrant industry employs more than 739,000 individuals, representing one-third of the country's craft villages The extensive network of craft villages, spanning from urban areas to the countryside, is characterized by skilled artisans and workers, establishing Hanoi as a central hub for nurturing and promoting innovative product ideas.

Traditional craft villages employ around 20 million people, representing 24% of the rural workforce, yet 90.4% face labor shortages Only 30% of workers hold permanent positions, with 70% being seasonal Alarmingly, only 12.3% of employees are trained, leaving many villages vulnerable due to a lack of skilled labor Workers are categorized into irregular, untrained individuals and regular, skilled artisans who produce high-end goods Vocational training is largely overlooked, relying mainly on family traditions (78.21%) and short-term classes for minors (21.4%) Additionally, many household business managers lack essential business skills.

Traditional craft villages face challenges due to a shortage of skilled artisans and stylists, leading to limited design diversity in their products This lack of innovation results in decreased competitiveness against similar domestic and international offerings While these villages can sustain themselves, they struggle to thrive in today's market economy without proper administration training and an understanding of consumer aesthetic demands.

Research significance

In Vietnam, cultural and creative industries contribute merely 3.61% to the GDP, with labor in this sector representing 3.51% (Tap Chi Cong San, 2022) Experts attribute this limited impact to a significant shortage of human resources, underscoring the critical importance of human resource development in enhancing the industry's growth and potential.

In a highly competitive market, the integration of skilled human resources is crucial for fostering innovation and maintaining competitive advantages, particularly in Hanoi's craft villages, which are currently facing a shortage of skilled labor Training and education emerge as vital strategies for promoting sustainable development within these communities However, there is a lack of empirical research assessing how these educational initiatives influence firms' abilities to innovate products and sustain 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 scarce The importance of education and training for cultivating a skilled labor force is clear, yet the empirical link between these factors and product innovation in CCI is underexplored Existing literature often emphasizes skilled artisans while neglecting the role of managers and firm owners This study aims to investigate how the education and training of managers influence the product development process, addressing this 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 processes within firms Training is quantified by the frequency of training activities, while product development is assessed through various factors such as strategic direction, external integration, development speed, planning processes, and target market identification The study specifically examines managers and owners from two craft villages in Hanoi: Bat Trang and Ha Thai.

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)

According to the OECD (2005), innovation encompasses the introduction of new or improved products, methods, instruments, or marketing strategies It should be understood as both a product and a process As Kahn (2018) highlights, innovation represents an outcome, a process, and a mindset, with its outputs being influenced by the innovative thinking behind the process.

Competitive advantage refers to a company's ability to effectively sell its products and services in a specific market (Shabbir, 2015) This advantage is established through a strategic management system that aligns with the innovation process, requiring ongoing promotion, maintenance, and expansion 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 present needs without compromising the ability of future generations to meet their own needs.

In 2015, the United Nations adopted the Sustainable Development Goals (SDGs), also referred to as the Global Goals, as a global initiative to eradicate poverty, safeguard the planet, and guarantee prosperity and security for all by 2030 The seventeen interrelated SDGs highlight the interconnectedness of various actions, emphasizing that advancements in one area can impact others, and that sustainable growth must harmonize social, economic, and environmental considerations.

Human resource development for SDGs

In light of the current negative economic trends affecting various nations, organizations are increasingly focused 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-based instruction led by a qualified trainer and follows a specific curriculum While it may offer certification, participation often requires trainees to pause their regular 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 refers to the structured and intentional learning provided by public and private institutions, forming the backbone of a nation's educational system This system is officially recognized by national educational bodies and their partners Predominantly, basic education makes up the core of formal education, while vocational training, special needs schooling, and certain adult education programs are also integral components of this official educational framework (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

Cultural industries play a crucial role in driving competitive advantages through innovation and specialized training Previous studies highlight the significance of these elements, yet they also reveal certain limitations and overlooked perspectives that warrant further exploration Addressing these gaps can enhance our understanding of how cultural industries can effectively leverage innovation and training to maintain their competitive edge.

 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 h

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 the literal aspects of culture but also the cultural products and services that form a significant and expanding sector This sector is shaped by the intersection of media, information, and the arts, highlighting the importance of both cultural production and consumption, which carry symbolic and expressive values Within this landscape, large multinational corporations operate alongside numerous small and medium-sized enterprises, illustrating the diverse ecosystem of the cultural sectors.

Creativity, initially a focus for psychologists in the mid-twentieth century, gained prominence between 1980 and 2010 due to the interest of management analysts and economists This period marked a global trend in innovation, with analysts seeking the keys to leveraging creativity for competitive advantage In the 1990s, policymakers began promoting creative industries, which encompassed diverse sectors such as architecture, fashion, film, and software, recognizing them as high-growth areas The term 'culture' often confused politicians, as it carried connotations that felt too European for British sensibilities Nonetheless, the term "creative industries" emerged to describe a vast array of outputs from cultural sectors and those reliant on innovation, highlighting the importance of creativity in economic development.

The UK government has rebranded cultural industries as "creative industries," leading to diverse models of cultural production within the economy Six commonly referenced models in research and policy include 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 Prime Minister of Vietnam outlines the strategy for the development of cultural industries (CCI) by 2020, defining CCI to encompass 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, as well as cultural tourism This classification model serves as the foundation for the study on CCI.

According to Clause 2, Article 3 of Decree 52/2018/ND-CP, a craft village is defined as a locality or residential area where rural business activities are conducted, specifically characterized by a community predominantly engaged in traditional occupations passed down through generations These villages are recognized for their unique cultural and ethnic identities, serving as hubs for handicraft production, where artisans and households specialize in time-honored crafts, operating within a guild-like system of small to medium-sized enterprises that share a common product range.

Competitive – Innovation

The idea that human resources can offer a competitive edge to businesses is well-established, with significant contributions from scholars like Huselid, Ordonez de Pablos, Pfeffer, Schuler, Jackson, and Wright It is recognized that effective human resource management strategies can lead to substantial advantages in the marketplace The term 'Human Resource Development' (HRD), introduced by Leonard Nadler at the 1969 Miami Conference of the American Society of Training and Development, emphasizes the importance of investing in employee growth and development as a key component of organizational success.

Human Resource Development (HRD) lacks a universally accepted definition, but it is essential for businesses to continuously assess the skills and knowledge of their workforce According to Rao (1985), HRD is a critical process that enables organizations to equip employees with the necessary competencies to meet current and future job demands Researchers like Hassan (2007) and Potnuru and Sahoo (2016) identify three key components of HRD: 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 perpetual cycle of instability, where continuous innovation is essential for survival for both individuals and companies Utterback (1994) highlights that businesses must consistently let go of past successes to embrace innovation, even if it means sacrificing traditional advantages Therefore, innovation is crucial for business success, requiring strategic decisions about resource allocation.

Innovation is recognized as a key driver of growth, with human capital being the most significant factor in the innovation process The enhancement of employee skills through firm-sponsored training can lead to increased innovation (Dostie, 2018) While innovation typically requires highly skilled labor, organizations primarily depend on training to improve these skills Despite its importance in achieving successful innovation (Klein & Sorra, 1996; Klein et al., 2001; Marler et al., 2006; Sawang & Unsworth, 2011; Ballot & Taymaz, 1997), the relationship between training initiatives and innovation has been insufficiently explored in the literature Although some recent studies highlight training as a crucial element of effective human resource management (Chen & Huang, 2009; Shipton et al., 2006), the independent effects of training on innovation remain largely unexamined.

Few researchers have integrated the principles of innovation studies with the creative industries, leading to a lack of systematic analysis between the two fields This gap may stem from the dominant focus on aesthetic values and product evaluation within creative industries.

Recent studies have explored aesthetic and content innovation through various research methodologies Notably, Stoneman (2007) highlights the creative industries' use of traditional technological innovation while also identifying distinct characteristics of their innovation processes He categorizes these aesthetic innovations as "soft innovation" and distinguishes between two types of this soft innovation.

Innovation in creative industries, such as music, books, and films, focuses on products that are primarily aesthetic in nature This innovation often involves the development of novel goods and unique production techniques, enhancing the artistic value and consumer experience within these sectors.

Innovation often emerges in sectors where functionality takes precedence over aesthetics, such as in new automobile designs, culinary products, and redesigned electrical appliances Historically, the definition of technological products or processes has focused on functionality, leading to a perception that such product differentiation lacks innovation However, Stoneman contends that many of these functional advancements should indeed be recognized as innovative activities.

Policymakers and scholars often overlook the innovation activities of creative businesses, which are structured differently than those in high-tech industries In these creative sectors, specialized divisions or experts are uncommon, and innovation is usually integrated into product or project development as part of regular work Consequently, many innovations emerge during the development of new products, remaining 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 economy (Baumol, 2004; Danneels, 2002) This innovation marks the beginning of the product life-cycle management process, where key attributes and production costs are established, significantly impacting a company's competitive advantage (Parry et al., 2009; Slack et al., 2006; Cooper and Chew, 1996) However, managing product development processes poses operational challenges (Krishnan and Ulrich, 2001) As Cooper (1992) highlights, the inherent uncertainty in product innovation demands ongoing improvement cycles and a high degree of adaptability.

Product innovation refers to the creation and execution of new or improved products, encompassing technical design, research and development, and business operations related to marketing these products Unlike later-stage product life cycle processes, product innovation is characterized by significant variability, making it challenging to predict outcomes and assess quality in advance This complexity necessitates adaptability and often results in high costs per unit.

In 2006, it was highlighted that product innovation systems are crucial for industrial companies The development of a new product involves multiple facets, requiring not only innovative product design but also comprehensive strategies for manufacturing processes, factory layout, distribution, sales, and the overall production and sales framework (Lofsten, 2014).

Product innovation plays a crucial role in driving future revenue for businesses, despite its inherent complexity and costs With increasing competition and shorter product lifecycles, a company's capacity to consistently generate product innovations is essential for enhancing overall business performance.

Companies that swiftly and effectively deliver products that meet the needs and desires of their target consumers are more likely to achieve a sustainable competitive advantage over their competitors.

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; Kamien and Schwab, 1975; Roberts, 1988) Each stage is fraught with uncertainty, such as whether research will generate new ideas, if technology can translate those ideas into designs, whether the manufacturing process can be financially viable, and if consumers will accept the new products (Allen, 1985; Souder and Moenaert, 1992; Parthasarthi & Hammarstedt, 2002).

Training and Innovation

Education, labor skills, and innovation are closely interconnected (Baldwin & Johnson, 1996) Continued training enhances access to cutting-edge knowledge, increasing a company's innovation potential (Bauernschuster et al., 2009) Company-sponsored training has a statistically significant positive impact on innovation (Bauernschuster et al., 2009) Investments in training foster a culture of continuous learning that enhances creativity and the generation of new ideas (Sung & Choi, 2014; Lau & Ngo, 2004; Bring, 2017) Research indicates a strong link between innovation activities and training in companies across Norway and the EU (Kaloudis et al., 2008; Naess et al., 2009) Employee training is essential for developing the knowledge and skills necessary for new product development (Demirkan et al., 2022; Hatch & Dyer, 2004; Beugelsdijk, 2008) On-the-job training enhances technological capabilities and is positively associated with innovation (OECD, 2011) Additionally, training plays a crucial role in predicting innovation by facilitating the assimilation of new external information (Neirotti & Paolucci, 2013).

The initial empirical findings on the relationship between training and innovation reveal notable limitations, particularly in differentiating between formal classroom training and informal on-the-job training Formal education primarily develops general skills, while on-the-job training focuses on specific skills, although both contribute to human resource development Research consistently shows that these two training types have distinct impacts on efficiency, as highlighted by studies from Black and Lynch (1996), Barrett and O'Connell (2001), Zwick (2005), and Dostie (2013) Furthermore, many studies suggest that companies often provide significantly more on-the-job training than formal training.

17 classroom training (Pischke, 2005), and therefore may have a bigger effect on a business's ability to innovate

In 1992, Watkins and Marsick introduced a learning theory for businesses that distinguishes between formal and informal learning While many scholars have attempted to define informal learning, often in contrast to formal learning, a universally accepted definition remains elusive (Clarke, 2004) Informal learning encompasses various unstructured and spontaneous educational experiences.

Informal learning is characterized as primarily non-structured, experiential, and non-institutionalized, where individuals derive understanding from their daily work activities, contrasting with formal learning that is structured and instructor-led (Marsick & Volpe, 1999) Unlike organized classroom training, informal learning occurs as workers interpret their experiences while performing their jobs Employees proactively engage in informal learning, individually or collaboratively, to gain the knowledge and skills essential for achieving both personal and organizational objectives.

Increased training, both informal and formal, significantly enhances product and process innovation, although this effect tends to wane over time (Dostie, 2018) Research indicates that on-the-job training is as effective as classroom training in fostering innovation across various types However, formal education often fails to address the specific needs of individual employees and struggles to keep pace with rapidly changing competency requirements In contrast, informal training allows employees to choose when and what to learn, leading to documented benefits such as improved efficiency, cost savings, and enhanced skills (Dale & Bell, 1999; Ellinger & Cseh, 2007; Leslie et al., 1998; Berg & Chyung, 2008; Jeon & Kim, 2012) This adaptability is particularly crucial in an era of evolving job demands and digitalization.

Informal training plays a vital role in equipping employees with essential skills for their job responsibilities, thereby ensuring their long-term employability (Froehlich et al., 2014; Kyndt & Beausaert, 2017) Contrary to the belief that increased investment in education directly correlates with enhanced innovation capacity, Nazarov and Akhmedjonov (2012) argue that on-the-job training is more effective in fostering innovation They suggest that in transitioning markets, it is the training provided by companies, rather than formal higher education, that drives innovation.

For the past few decades, organizations have primarily focused on enhancing management skills by sending managers to formal educational courses, including conferences, seminars, and online programs Historically, a significant portion of business resources aimed at growth has been allocated to formal learning initiatives.

In recent years, many businesses and HRD professionals have believed that increased investment in formal training leads to improved management efficiency and higher profits (Bassi & Van Burren, 1999) However, critics argue that formal training often fails to adequately prepare managers for the rapidly changing workplace and does not provide sufficient practical experience to develop essential skills (Hartley, 2000; Sheckley & Keeton, 1999) This reliance on formal training can erode competitive advantage if managers struggle to apply their learning effectively Furthermore, an overemphasis on formal training may undermine the value of informal learning opportunities that enhance managerial competence Conversely, Dale and Bell (1999) warn that informal learning can be harmful when it involves acquiring incorrect instructions or poor practices.

The findings suggest that formal learning is not ineffective; rather, a combination of formal and informal training is essential for maximizing developmental benefits Researchers recommend that managers incorporate a balanced approach to both types of training in their planning systems In workplace environments, individual training is facilitated through the ongoing interaction of formal and informal learning methods.

Effective competence development requires an integration of knowledge from both formal and informal learning experiences Research indicates that neither type of learning can stand alone in fostering competence; instead, they complement each other to enhance overall understanding and practical skills.

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 sufficient professional expertise are likely to enhance and facilitate informal learning more effectively.

Formal learning plays a crucial role in fostering informal learning, as the skills and techniques gained from structured educational courses can enhance individuals' ability to integrate informal learning in their workplace This synergy between formal and informal learning methods is supported by research, highlighting the importance of a comprehensive learning approach for professional development.

Research by Rowden and Conine (2005) and others indicates that workplace learning often occurs in response to various events Formal learning equips individuals with essential problem-solving and self-directed learning skills necessary for thriving in challenging work environments (Brockman & Dirk, 2006; Burns et al., 2005) Additionally, it enhances individuals' ability and motivation to engage in 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 increasing consolidation in the sector, small, independent family businesses remain the dominant structure Training and development are crucial for achieving high efficiency (Bryan, 2006) Storey (1995) noted that certain HRD initiatives tend to be more sustainable once adopted by smaller organizations.

Small businesses face numerous challenges, with a critical need for initiatives to support their growth Leonard Nader highlighted in 1970 the importance of enhancing human resources in small businesses (Walton, 1999) Research consistently shows that innovation is vital for the success and survival of these enterprises (Acs and Audretsch, 1988; Verhees and Meulenberg, 2004; De Massiss et al., 2018) To effectively compete with larger, established firms, small businesses must sustain their innovative edge (Rosenbusch et al., 2011).

Education and innovation

To enhance their understanding and skills, administrators can leverage education, training, and practical experience Practical experience, often referred to as "learning by doing," is crucial for development, allowing leaders to gain new expertise through hands-on tasks According to Porter et al (1975), the expectancy hypothesis suggests that individuals are motivated by expected outcomes based on their previous experiences with specific tasks and the results of those performances.

Kenney et al (1979) highlighted that training targets are more directly associated with workplace behavior, making job-centered training primarily functional and focused on specific workplace techniques and company processes In contrast, person-centered learning emphasizes individual development through broader, theoretical lessons aimed at enhancing analytical and critical skills.

Explicit and tacit knowledge both contribute to innovation, but tacit knowledge, especially gained through vocational training, is crucial for a firm's innovative capacity due to its complex nature that resists quick learning and verbal communication (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 Additionally, Watson (2006) highlights that technological advancements in education enhance innovative capabilities Previous research indicates a positive correlation between education and innovative performance (Nazarov & Akhmedjonov, 2012; Sozbilir, 2018), supporting the notion that education significantly boosts 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 h

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

The variable Inf_T measures the frequency of informal training that owners or managers engage in when they need to acquire new skills or knowledge for their 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 seek when they need to acquire new skills at work This is measured using a five-point scale, where 1 signifies "Never," 2 represents "Rarely," 3 stands for "Sometimes," 4 indicates "Often," and 5 means "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

The Ext variable assesses the degree to which a firm's operations engage with external stakeholders, including suppliers and customers, through effective communication, collaboration, and coordination of efforts Respondents rate their agreement 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 h

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 h

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 suitable 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 distinct phases: first, surveys were conducted to assess the training and education of firm administrators and their influence on the product development process, followed by in-depth interviews to offer deeper insights into the quantitative findings The main goal of this sequential explanatory design is to link quantitative results with qualitative interpretations (Cresswell, 2018) While this approach is relatively easy to implement due to its structured stages, a notable limitation is the time required to gather data across the two phases (Cresswell, 2009).

Bat Trang village, one of Vietnam's oldest and most renowned pottery villages, boasts a rich history in traditional craftsmanship Known for its high-quality ceramic products that cater to both domestic and international markets, Bat Trang has also emerged as a popular tourist destination in recent years.

Ha Thai village, renowned for its lacquer products, is one of only two traditional handicraft villages in Vietnam recognized by the Japan International Cooperation Agency (JICA) for its sustainable 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, each household generates an average annual revenue of 150-200 million VND The village's total annual revenue has recently ranged from 20 to over 30 billion VND, with 70% of this income coming from international markets and 30% from domestic sales Currently, over 4,000 laborers are engaged in the lacquer trade, highlighting the village's significant role in the craft industry.

Case studies are essential for identifying practical strategies to address 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 managerial training Furthermore, these studies reveal the challenges and obstacles faced in implementing effective training and education for business administrators.

This research focused on the owners and managers of small and medium-sized enterprises (SMEs) and household businesses in craft villages A non-probability sampling method was employed, utilizing both purposive and snowball sampling techniques During the snowball sampling process, participants were encouraged to refer additional individuals who are also part of the target population.

The survey, conducted onsite using a paper-based questionnaire in Vietnamese, aimed to gather data on the frequency of informal and formal training, as well as the product development processes of firms Given that many owner/managers were not proficient in English, the questionnaire was translated from English to Vietnamese and back to English for accuracy It comprised three main sections: informal training frequency, formal training frequency, and the product development process, utilizing Likert-scale questions to facilitate responses.

In-depth interviews were conducted onsite with owners and managers of firms to gather detailed insights that complemented the quantitative findings The semi-structured interview format was deemed most appropriate for exploring the complexities of training implementation in traditional craft villages These interviews were conducted in Vietnamese and subsequently 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 standard open-ended interview guide, spontaneous insights often emerge The recorded and transcribed interviews are compiled into a data set, with the identities of respondents and companies 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 These methods often hinder technological advancement and business growth, as they rely on the transmission of knowledge through hands-on experience rather than formal education.

Traditional crafts are typically passed down through generations within families or groups, relying heavily on word of mouth for vocational training This informal method of learning is accessible to those outside familial connections, emphasizing an experiential and unstructured approach that has been practiced for thousands of years.

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 or reflecting on their actions as a key self-learning method, indicating its popularity While collaborative training methods, such as discussing with others, also show significant engagement, more focused actions like collaborating directly with peers account for only 41% These training approaches are particularly beneficial for beginners, as they help establish foundational skills.

Informal training in craft villages is primarily conducted through peer coaching, family members, or instructors, often lacking formal certification The specifics of these training programs can vary significantly based on the trainer, with some adhering to a regionally standardized format Typically, these programs are based on agreements between local business patrons and learners, focusing on hands-on, work-based experiences Peer training usually involves a simple observe-and-repeat approach, lasting one to two weeks, while family training often starts in early childhood, allowing trainees to gradually develop skills through observation and participation in household chores.

The findings indicate a significant lack of formal training opportunities for respondents, with limited access to internal and external training programs, online courses, or workshops External courses at training centers typically focus on specific hard skills, such as drawing, and last between 3-5 months, often incurring tuition fees Internal training programs, available to only 11% of employees, cater exclusively to an organization's staff and primarily emphasize specialized skills rather than foundational training The scarcity of these programs is largely attributed to constraints in human resources.

In craft villages, opportunities for professional development such as job-specific seminars and online training programs are scarce due to limited availability, language barriers, and the age of the trainees Most participants in these online courses and workshops tend to be between 25 and 34 years old, highlighting a gap in access for younger individuals and those who may benefit from such training Addressing these challenges is crucial for enhancing labor market mobility and reducing opportunity costs in these communities.

The pursuit of education remains limited, with only 6% attending vocational schools and 14% obtaining degrees in job-related fields Interestingly, individuals over 50 years old are more likely to have attended vocational schools, while those under 40 typically opt for bachelor's degrees Older respondents noted that they attended vocational schools 20-30 years ago, benefiting from highly skilled instructors, relevant curricula, and strong employment opportunities However, contemporary vocational schools struggle to adapt to rapid market changes and the increasing accessibility of bachelor's degrees, contributing to a decline in vocational education's appeal.

Results from survey

In this section, the author employs descriptive analysis to present the collected data, with Table 4.1 offering a statistical overview of the model's variables This table includes 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 h

This study utilized principal component analysis for dimension reduction, employing varimax rotation and suppressing small coefficients with an absolute value below a specified threshold Additionally, the results of the KMO and Bartlett's test of sphericity are presented below.

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 h

Table 4.7 Rotated Components for independent variables F_T

The KMO value of 0.557, exceeding the threshold of 0.5, along with a significant Bartlett's Test 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—SD, TM, Pla, Spe, and Ext—revealed that the relevance and explained results for Ext were low, leading to its removal from the test.

The KMO value of 0.642, exceeding the threshold of 0.5, along with a significant Bartlett's Test value of 0.000 (less than 0.01), indicates that the data is appropriate for factor analysis.

Table 4.9 Rotated Components for dependent variables DevP

Pearson correlation analysis was performed to examine the relationship between the variables A correlation coefficient ranging from -1 to +1 indicates the strength of the relationship, with values closer to +1 signifying a stronger correlation.

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 interaction between education and informal training (Edu x Inf_T) demonstrates a significant positive effect on personal development planning (PDP), with a significance level of 0.0165 In contrast, the combinations of education with formal training (Edu x F_T) and formal training alone (F_T) show only weak impacts on PDP This notable significance may be attributed to the limited sample size of the data.

Results from interviews

A total of 21 in-depth interviews were conducted with managers and owners of firms in craft villages, revealing key insights divided into three main areas: the impact of training and education on product innovation, the necessity of integrating both for effective product development, and the challenges faced in implementing training within these communities The findings highlight common advantages and shortcomings, as well as shared challenges related to the procedures involved in training and education.

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 h

43 skills as well as management skills This part will examine both types of skills transmitted through training and education

Informal training is highly valued for its ability to enhance productivity, reduce organizational costs, and improve individual skills and knowledge Participants in interviews highlighted that this type of training allows for quicker learning, direct practice, and time savings, enabling learners to avoid common mistakes by absorbing tips from trainers In craft villages, where practical skills are essential, informal training significantly increases the chances of promotions and higher wages compared to untrained informal employment It is crucial for aspiring master craftsmen to undergo training, especially when establishing or acquiring businesses in these fields Moreover, informal training, combined with traditional methods, aligns with current skill demands in the informal sector, making it a vital option for school dropouts seeking vocational training.

Informal training effectively communicates the meaning and value of cultural products, which possess unique symbolic meanings distinct from other industries While the core idea behind these products may be similar, individual perceptions of their symbolism vary greatly This personal distinction is fundamental to product innovation.

Business households in craft villages often possess unique trade secrets, particularly in their techniques for blending colors, textures, and materials These secrets play a crucial role in differentiating their products in a competitive market Respondents believe that informal training can effectively equip learners with the specialized skills necessary to maintain these distinctive 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 largely overlooked their training in management skills like target market identification and planning processes, instead focusing on specific production stage skills It became evident that management skills were typically acquired informally through observation and conversations with others, relying heavily on personal experience Interviewees noted a tendency to adhere to traditional business practices while accumulating experience, a process fraught with uncertainty and lacking a clear understanding of market strategies.

Formal training courses at training centers enhance advanced skills essential for specific stages of the production process In Bat Trang village, for instance, drawing is regarded as a crucial hard skill for pottery products These drawing courses equip students with the ability to design and innovate new products Typically self-organized and led by experienced artisans, these courses provide learners with valuable hands-on experience Furthermore, their accessibility allows anyone to participate, making these training opportunities widely available.

Internal training courses offered by companies primarily emphasize firm-specific skills rather than basic competencies Exclusively available to employees, these courses are customized to align with the unique characteristics of the company's environment and its distinct product features This tailored approach enables learners to swiftly acclimate to the internal workplace dynamics.

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 educational qualifications, often holding bachelor's or vocational degrees relevant to traditional professions This enhanced educational background significantly contributes to the innovation processes within their firms.

Product innovation and other forms of innovation are essential in today's industry Respondents highlight that formal education equips learners with foundational knowledge and insights into the market Academic training provides essential analytical skills, enabling trainees to understand macro market dynamics Most interviewees with academic qualifications emphasize that the ability to learn is the most vital skill one can possess.

Interviewees emphasized that their education significantly shortens the development time for new products Additionally, they noted that when planning new product realization, their strategies are usually detailed 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 cultivate essential learning skills, thereby enhancing their overall learning experience While training equips learners with practical skills necessary for job performance, business owners and managers seeking innovation and growth require a robust foundation for sustainable development 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 and innovative products Additionally, graduates in fine arts typically possess superior aesthetic judgment and art product evaluation skills compared to those without formal education.

Traditional apprenticeships offer a cost-effective way to communicate skills, but they are insufficient in today's context Engaging in formal study enhances a craftsman's knowledge of pottery and art, fostering a greater aesthetic sense and leading to the creation of more beautiful designs.

Studying architecture at university equipped me with the skills to develop materials and designs that outperform those from my father's era, who relied solely on on-the-job training.

I strongly advocate for my children to pursue a college education, as traditional apprenticeships alone are insufficient The knowledge passed down through generations has its limitations, and to foster development, we must seek out new information Attending college provides a solid foundation for practical knowledge, enabling individuals to engage in informal learning more effectively Those equipped with a robust formal education are better positioned to innovate and promote lifelong learning.

CONCLUSION AND DICUSSION

Discussion

This research employs a mixed-method approach to explore the connection between training and education and the product development process, specifically examining the roles of informal and formal training alongside formal education Conducted within the context of craft villages in Hanoi, Vietnam, this study contributes valuable insights to the emerging field of innovation research.

This study explores the impact of training and education on product development through a combination of surveys and in-depth interviews The findings support four hypotheses indicating a positive indirect relationship between both formal and informal training and education on the product development process (PDP) Additionally, the integration of training and education enhances product development success Notably, a strong positive correlation exists between informal training and education with PDP, while the relationship between formal training and education with PDP shows weaker evidence.

Narrative and situation analysis is employed to go deeper into the training effects The semi-structured interviews with 21 respondents identify situations regarding training and education in craft villages:

Informal training is a key feature of craft villages, offering practical knowledge and management skills primarily through experiential learning One significant advantage of this approach is the preservation of traditional values However, an overreliance on informal training can hinder broader employee development and limit the establishment of an internal labor market This dependence may also increase the use of the external labor market, perpetuating a detrimental cycle characterized by high recruitment costs and minimal training investment.

- Formal training, both internal and external, is rarely organized in craft villages The formal training courses usually provide trainees with practical and basic knowledge

- Education is perceived to provide learning capacity, macro and basic knowledge that stimulate informal and formal learning h

Both of training and education need to be implemented together to develop further in the product development

Training quality and employment are the challenges that inhibit the training implementation of firms Training quality includes unqualified trainers and inadequate curriculum.

Implications

This research enhances the understanding of cultural product innovation by highlighting the positive impact of integrating education and training on the product development process While prior studies have explored the link between training practices and product innovation, there has been a lack of focus in the HRD literature on how managers' training and education influence innovative behavior Additionally, the interplay between management and practical skills has often been overlooked Our findings demonstrate that investing in managers' training and education significantly contributes to improved product development within firms.

To enhance vocational training policy, it is essential to align human resource development with the specific traits and production needs of craft villages This approach should incorporate diverse training formats and actively involve participants Additionally, training institutions and research centers must be encouraged to innovate in their teaching methodologies and research practices.

To ensure the development of skilled workers, it is essential to standardize the quality of vocational trainers Additionally, implementing policies that encourage artisans to engage in vocational training is crucial Collaboration with businesses is also necessary to facilitate vocational training and guarantee employment opportunities for trainees.

Limitation

The limited sample size, stemming from accessibility issues, introduces common method bias in the research Focusing solely on two craft villages in Hanoi restricts the findings' applicability, as it does not encompass the diverse range of craft villages throughout the city, each with unique products, production methods, and training approaches.

This research omits the time span for training in craft villages due to the non-uniform intervals at which trainees are exposed to learning Training often begins at a young age under the guidance of family members, but many trainees experience brief periods of training upon entering the sector Additionally, there is a lack of consistency in defining formal and informal training, as no universally accepted definitions exist, which may lead to varying results across different studies.

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My name is Vu Thi Thuy Duong, a Master's student in the Global Leadership Program at Vietnam Japan University (VJU) I am conducting research under the guidance of Prof Pham Hong Tung from Vietnam National University Hanoi and Prof Atsushi Kato from Waseda University, Japan Please carefully read and complete the questionnaire; your responses will be used solely for scientific research and will remain confidential I assure you that your answers will not be shared with your company's management or supervisors, ensuring your privacy If you're interested in the results of my study or have any questions, feel free to contact me via email.

Thank you in advance for your cooperation and look forward for your participation.

Craft Village Ha Thai/Bat Trang

Number of years you have worked in this sector

How frequently do you use the following activities when you need to learn something new at work? Please choosing a scale from 1 to 5 (frequency level) as below (1-Never; 5-Always)

4 Share materials and resources with others

7 Receive coaching from peer/ instructor/ family member

How frequently do you use the following activities when you need to learn something new at work? (1-Never; 5-Always)

1 Attend a training program in the training center

3 Attend job-specific seminar/workshop

4 Attend a training program through online course

1 Attended job-related major in vocational school

2 Pursuing a degree with a job- related major h

1 To what extent you have a detailed plan regarding production quantity

2 To what extent you have a detailed plan regarding production time

3 To what extent you have a detailed plan regarding production design

4 To what extent you apply the new technology in the product development?

5 To what extent you have any policy to attract the high-skilled worker?

6 To what extent you define the target market and potential customers?

7 Describe your unit‘s relationship with relevant external groups such as suppliers and customers (1: strongly disagree, 3: somewhat agree, 5: strongly agree)

8 How much time does it take to develop the new product on average? h

1 How were you trained? Can you describe what kind of education/training that you had?

2 Who is involved in the development process?

3 How does your education/training affect your market insights? How do you identify your target market?

4 How are design requirement lists set? How are customer demands incorporated in the requirement list?

5 How does your education/training help you develop your product in term of time?

6 How does your education/training help you develop your product in term of technology?

7 How does your education/training affect your plan in term of plan details?

8 What are the traits that developed the most through your training/education?

9 Do you think that your training/ education equip you with sufficient skills and knowledge for your job?

10 If you have to choose some of your skills/aspects to improve, what would it be? h

Consent to Participate in a Research Project

Research Project Title: Human resource development in Creative - Cultural

Industries: Case study of craft villages in Hanoi, Vietnam

Principle Investigator: Vu Thi Thuy Duong - Master student, Vietnam Japan