This thesis accepts the argument that small to medium sized enterprises are a major force in the present UK economy, along with the forecasting that claims future UK growth in numbers from 3.7 million 1 (existing) to 4.5 million in the next ten years. This thesis argues that the action 1 learning process yields a "trinity of benefits" including hard and soft benefits together with emotional intelligence, which assist small and medium sized organisations to be more competitive and overcome the barriers faced in a changing economy. The thesis also argues that on another level action learning can help the Government to bridge the SME Gap of Engagement in UK Enterprise Policy, because the process offers a top down bottom up approach to engagement through collaboration, provided the traditional role of the set adviser is radically revised.