Business associations and their potential contribution to the competitiveness of SMEs

Abstract

This paper examines the relations between small and medium sized enterprises (SMEs) and business associations. It identifies sectoral, local and national dimensions and reports survey results in Britain that evidence the range of services supplied and demanded. The paper reviews the theoretical understanding of how associations operate and how they can be expected to relate to their SME members. Using this framework the paper then assesses, largely using new survey evidence, the types of associations most relevant to SMEs, their characteristics, and their services. The paper concludes by arguing that SMEs are one of the least well represented groups of business, their interests are often likely to be swamped in association governance either by large businesses or by employee–status individuals. In general there are also limits to development of services through business associations, although there is strong variation between businesses by sector, location and size. The author concludes that contributions by associations through specific services to individual companies appears to be relatively limited. The chief contribution of associations to competitiveness of their member businesses appears to be their improvement of collective industry standards, e.g. through codes of conduct, information, collective events, benchmarking and management seminars.