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SPATIAL MARKETS FOR CONSULTANCY TO SMEs

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  • ROBERT J. BENNETT
  • COLIN SMITH

Abstract

This paper demonstrates the existence of both localised and national spatial markets for consultancy in Britain. A large survey sample of 1,208 client‐advisor links whose locations are geo‐coded is investigated using GIS software. It is expected from previous literature that search and selection effects, and the transaction costs of interaction at different distances, will influence the selection of consultants by clients. The paper shows that most client‐advisor relationships are geographically close: 61.3 per cent of links are less than 20 km in distance. But there is also a national market whereby 21.9 per cent of consultants are over 100 km and 7.9 per cent are over 200 km from the client. From these patterns, the maximum reach of market areas for different business centres can be estimated. This varies by type of consultancy assignment and size of business centre. The market area is only 30–40 km for consultancy on marketing and sales, and finance and taxation, which are sourced chiefly from local small business centres. For consultancy on business strategy and organisation, product design and quality and training/HR, regional centres and London play a more important role. The paper demonstrates something of a hierarchical structure of consultancy assignments and their spatial markets that is similar to that in retailing.

Suggested Citation

  • Robert J. Bennett & Colin Smith, 2004. "SPATIAL MARKETS FOR CONSULTANCY TO SMEs," Tijdschrift voor Economische en Sociale Geografie, Royal Dutch Geographical Society KNAG, vol. 95(4), pages 359-374, September.
    • Handle: RePEc:bla:tvecsg:v:95:y:2004:i:4:p:359-374
    DOI: 10.1111/j.0040-747X.2004.00323.x
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    File URL: https://doi.org/10.1111/j.0040-747X.2004.00323.x
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    1. Robert Bennett & Paul Robson, 1999. "Intensity of Interaction in Suppy of Business Advice and Client Impact: A Comparison of Consultancy, Business Associations and Government Support Initiatives for SMEs," Working Papers wp142, Centre for Business Research, University of Cambridge.
    2. Robert J Bennett & Colin Smith, 2002. "The Influence of Location and Distance on the Supply of Business Advice," Environment and Planning A, , vol. 34(2), pages 251-270, February.
    3. Robert Bennett & William Bratton & Paul Robson, 2000. "Business Advice: The Influence of Distance," Regional Studies, Taylor & Francis Journals, vol. 34(9), pages 813-828.
    4. Carl Shapiro, 1983. "Premiums for High Quality Products as Returns to Reputations," The Quarterly Journal of Economics, Oxford University Press, vol. 98(4), pages 659-679.
    5. N M Coe, 1998. "Exploring Uneven Development in Producer Service Sectors: Detailed Evidence from the Computer Service Industry in Britain," Environment and Planning A, , vol. 30(11), pages 2041-2068, November.
    6. D Phillips & A D MacPherson & B Lentnek, 1998. "The Optimum Size of a Producer Service Firm Facing Uncertain Demand," Environment and Planning A, , vol. 30(1), pages 129-141, January.
    7. W Richard Goe & Barry Lentnek & Alan MacPherson & David Phillips, 2000. "The Role of Contact Requirements in Producer Services Location," Environment and Planning A, , vol. 32(1), pages 131-145, January.
    8. J N Marshall, 1983. "Business-Service Activities in British Provincial Conurbations," Environment and Planning A, , vol. 15(10), pages 1343-1359, October.
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