Much has been written, in recent years, on the subject of learning organisations and knowledge‐based businesses. Most research in this area, however, focuses upon large businesses. In this type of firm, it appears the concepts of “organisational learning” and “learning organisation” can be, and often are, used interchangeably to describe learning‐based individual and collective development. Until recently, issues relating to organisational learning in small businesses were mostly ignored or marginalised. This paper sets out to redress the balance. It reports a study of organisational learning in the small business sector of the UK economy. Research data, collected over the 1996‐1998 period, through telephone surveys, in‐depth interviews and case studies, were analysed through quantitative and qualitative methods. The results indicate that although learning can occur in the majority of small businesses in the sample, only a minority of these manage new knowledge strategically to sustain and advance their competitive advantage.
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