The spatial market of business advice and consultancy to SMEs: Fid-Bau Portal

The spatial market of business advice and consultancy to SMEs

Bennett, Robert J. / Smith, Colin

AbstractThis paper demonstrates the existence of spatial markets for business advice services. A large sample of 3245 client–advisor links is investigated using GIS software. Seventy per cent of links are less than 25 km in extent, 93% are to the nearest local business centre, and only a few are with hinterlands or areas peripheral to main centres. The maximum reach of market areas varies by advisor type, averaging only 25–40 km for chambers of commerce and public sector advice services such as Business Link. The maximum reach is 48 km for accountants and banks, and increases to 64 km for customers and suppliers and 74 km for consultants. A threshold for regional level services in major centres can be identified, which ranges from 12,000 to 24,000 businesses in size, depending on advisor type. Service sector firms are generally more localised than manufacturing, and local sourcing of advisors generally declines with firm size and size of business centre. Regional differences are relatively small, but Scotland, Yorkshire and Humberside are the most self-contained for advice, whilst London and the South-East are the least self-contained. This is a contrast to earlier findings by O’Farrell and others. The paper demonstrates a hierarchical and spatial market structure for business advice services that is similar to that in retailing, with firm size and advisor type being the primary influence on differences in demand, and with regional centres most distinct from local centres of supply. Intense localised sourcing of advice from customers and suppliers does not appear to be frequent.