The vast majority of employers still need convincing that university graduates are worth hiring, Sir Ron Dearing said this week.

Sir Ron, giving details of the early progress of his ÖйúAƬ review at a Preston conference, revealed that the Dearing committee's five regional seminars with leaders of local small and medium-sized enterprises (SMEs), where most new jobs are expected to be created in the next few years, had only attracted "modest turnouts".

Most of those who had attended came from the service sector rather than the wealth-creating manufacturing sector.

He said: "The SME executives told me - 'graduates? They're a bit arrogant. And they don't know much. They know the book stuff. But they don't know how to deal with the customer. And we can't afford to train them, you know. They've got to come here running.'" Sir Ron said that universities should go out of their way to persuade SMEs that graduates are an essential investment.

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"The onus is on us to sell ÖйúAƬ; there is no obligation for them to come to us. And we should be saying that what we've got to sell is rather good," he insisted.

Not all SMEs need the hard-sell tactic, however. Delegates, drawn mainly from the new university sector, heard about NIS Invotec, a mechanical production engineering company with 300 staff and a turnover of Pounds 20 million.

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Owned by a Taiwanese steamship company, NIS Invotec takes the view that, since "knowledge decays", it must invest in upskilling by teaming up with and sending its workers to local universities.

Phil Robson, the company's managing director, said: "We find that the quality of our outside collaborations does add value to our bottom line."

But he also suggested that more could be done to foster links between business and universities.

He recommended that government bring down some of the "ludicrous barriers" set up to safeguard funding council money; universities be awarded funding council points for training company schemes that were on a par with new professorial chairs; and postgraduate training partnerships be given a national rather than just a pilot profile so they have "a real chance of making an impact".

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