SPATIAL MARKETS FOR CONSULTANCY TO SMEs

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.