Learning from different types of failure: evidence from non-severe and severe work accidents in SMEs

Abstract

This paper investigates the learning patterns of small and medium-sized enterprises (SMEs) from heterogeneous work accidents (i.e., minor and severe and fatal accidents). Work safety cannot be overlooked, and the focus of this study on learning from failure allows to understand how SMEs match safety problems with solutions generated by past experience with work accidents and knowledge acquisition; while acknowledging that accident heterogeneity influences SMEs’ learning. The analysis uses a sample of 108 Spanish SMEs during 2006–2009. The results show that SMEs learn to modify safety practices, and that experience with both minor and severe and fatal accidents impact learning outcomes—measured as changes in the unit accident cost—through different mechanisms. Cumulative experience with past work accidents supports exploitative learning, but this effect was found only for minor accidents. Although the adoption of safety-enhancing tools (i.e., OHSAS 18001) does not affect learning, the findings reveal the value of ambidextrous learning: SMEs adopting the OHSAS 18001 learn more from severe and fatal accidents than from minor accidents by triggering drastic modifications in their safety practices.