Southern Illinois University is examining how a wave of trade-association mergers will affect small businesses.
Feb. 17, 2006--With an estimated 120 mergers since 1996, the trade-association business has seen a lot of consolidation lately, and a new study seeks to find out how such activity will impact smaller member companies.
The wave of consolidation began mostly on a regional basis, like the recent merger of the Massachusetts Software Council and the New England Business and Technology Association, but now observers say it could shift to a national level.
"This is a trend that isn't going to end anytime soon," said Julie Silverstein, of SmithBucklin, a Chicago firm that manages more than 185 trade associations nationwide.
After recognizing that such consolidation has been going on for a decade, the firm recently commissioned a study by Southern Illinois University to find out what the implications of the rash of association mergers will be. The results are expected to be released sometime later this year.
Until then, the question is whether these mergers pose a problem for smaller employers, whose voices might be washed out as larger corporations join their association's ranks.
While it has become challenge, it's not true in all cases, according to Kristi Brower, president of Encompass, a large group of Hewlett-Packard users located in Austin. When Interex, a rival HP-user group with 100,000 members, many of them small technology companies in states like California and Washington, went bankrupt in August 2005, Encompass took proactive steps to add one former Interex member to its board while naming another as a chief advocate. "We are focused on ensuring these companies have a voice," Brower said.
DARREN DAHL is a contributing editor at Inc. Magazine, which he has written for since 2004. He also works as a collaborative writer and editor and has partnered with several high-profile authors. Dahl lives in Asheville, NC.