The Contribution of Business Associations to SMEs

Abstract

This article assesses the motives for membership of associations by established SMEs with one or more employee. The article concludes that membership motives span a complex ‘bundle’ of services, ranging from individual supports to collective lobbying. Bundling gives advantages of scale and scope to specialist providers, but also combines individual and collective benefits in order to mitigate the effects of free riding. Established SMEs also seem to look on associations, as a whole, as a bundle, belonging to an average of 1.85 associations per firm. There is some size segmentation of the association market, but, in general, size variation appears less important than the target markets which associations cover: the sector (trade and professional bodies), the locality (chambers of commerce), the specificness of the SME (such as FSB, FPB), or the role of the SME owner as director (such as IoD).