DEFINITION

Business Associations:

• Membership organizations established to represent the business community

• Generally made up of enterprises and individuals engaged in trade, industry, and business

• Organizations whose members share a common interest

BRIEF HISTORY OF BUSINESS ASSOCIATIONS

• Modern form of business associations and Chambers of Commerce dates back to "chambres de commerce" introduced at the national level in France, 1802-1804

• Predecessors were medieval European merchant guilds run by merchants to protect/regulate their trades including:
  •Supervising weights/measurements
  •Running arbitration boards for disputes
  •Administering ports and markets
  •Gathering, aggregating, and presenting business views to the community
  •Organizing commodity exchanges
  •Collecting and providing information on commerce and trade

• Favored self-administration by the business community

• Formed under private law since no public law existed

• Membership was voluntary (Anglo and American models)

• Membership is obligatory and required by public law

• Membership is 30,000

• Membership is obligatory and required by public law

• Membership is 1.7 million

• The National Association of Manufacturers is a voluntary organization

• Membership is 13,000 enterprises, 110 Manufacturing Trade Associations

• Membership is 5,000 local and state chambers, 215,000 private enterprises and 1,200 trade associations

  • India
  • Nepal
  • New Zealand
  • Argentina
  

BUSINESS ASSOCIATIONS TODAY

Promote and Advocate the Interests of Business

• Create favorable climates for business growth, attraction, retention, and expansion

• Self-administer

• Direct policy (free enterprise)

• Determine areas (city, province, state, nation)

• Compliment legal efforts of communities

• Lead job growth initiatives

• Innovate new business growth

• Strategize as to how to attract, retain, and recruit businesses

• Spearhead leadership development

• Consult/advise governments about all draft laws and regulations affecting trade and industry, including:

  • Municipal budgets
  • Tax issues
  • Construction and development
  • Economic development
  • Develop strategies to prepare the labor force
  

• Create economic development institutions for strategic initiatives

  • Convention Bureaus
  • Business Improvement Districts
  • American Chambers of Commerce
  

• Establish codes of conduct that:

  • Define business relationships with each other
  • Structure accountability and standards of work
  

• Develop strategies about economic conversions

  • Base closures
  • Superfund sites

• Promote entrepreneurial climates for growth

  • Mentoring programs
  • Partnership programs
  • New business start up assistance

Reasons Business Associations Work

• Experiences from the early 1800's

• Business people are familiar with the concept of organizing around common interest

• Understand the importance of structured and organized approaches to business growth

• Strength in numbers

• Answer questions like:

  • Is it more valuable to attract manufacturing firms, retailers, hotels, casinos or services firms?
  • What is the value of new jobs to the community?
  • What strategies should we use to get the greatest return?

WHAT 100 NEW JOBS TO A COMMUNITY MEANS

Earnings Multiplier Effects and Impacts

• Industry pays both directly and indirectly to households employed, approximately $1 million

• Employment multiplier factors include:

  • Number of jobs created
  • Jobs created by the primary industry
  • Secondary demand jobs created by consumer demand
  • Manufacturing jobs are perceived as having the greatest multiplier benefits in a community

• Service component in manufactured products has become important

  • Computers generate markets for software
  • Telephones generate markets for long distance and local dial tone services
    (Cost of One Job in 1990 ¹)

CASE STUDY

• International Home Furnishing Marketing Association

  • Responsible for annual home furnishings exhibition
  • Use 6 million square feet of exhibit space
  • Utilize 150 buildings during exhibition period

• Economic benefits to surrounding communities

  • hotels/motels
  • restaurants
  • transportation

• More than 55,700 attendees

• Stay on average 6.5 nights

What Business Associations Need to Do to Build a Strong Business Community

• Organize a strong business association to include:

  • strong internal structures
  • influential leaders need to become more involved
  • create a strong image
  • communicate successes effectively
  • attract top community leadership
  • unite and mobilize key constituents
  • run like a business
  • financially sound