On the job training is useful : a part of on the job training has increased the marginal productivity of future and rate of wage. Investment in a human capital depends on character of investment and market conditions. The innovation role of small and medium firms has recently received increasing attention in newly industrializing countries as they attempt to transform their industries from labor intensive to technology intensive. It also suggests some implications to the small and medium firms' strategies and public policies accelerating research and development. Lack of qualified scientists and engineers often inhibits the small and medium firms' ability to access and assimilate external technical information. Such technical personnel are particularly scarce in NICs. Therefore, how to employ these technical staff should be an important issue for small and medium firms seeking to acquire distinctive competences. Small and medium firms must invest further education and training to its labor.