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This article explores practical and policy issues involved in engaging small and medium-sized enterprises (SMEs) in e-learning for work-based learning. It considers the organisational context for e-learning and explores ways of optimising the process of learning for different types of employee, then outlines the findings of an investigative study on work-based learning by universities in Wales, UK. The article also assesses four types of influences on learning in SMEs and the impact of e-communication, in addition to exploring the issue of sustainable provision and measures of success from a small firm perspective. Finally, the article reflects on European policy recommendations and concludes by proposing directions for a research agenda.