The influence of location on the use by SMEs of external advice and collaboration

This paper provides an analysis of the influence of location on the extent of use and impact of external advice and collaboration on small and medium- sized enterprises (SMEs) in Britain. The analysis indicates that for privat e-sector advisers (accountants, consultants, etc.) and collaboration with s uppliers and customers, the intensity of use does not vary significantly wi th location in most cases. Only the input of business friends and relatives is strongly locationally constrained, indicating the importance of persona l trust processes operating in a different way from other influences. EU St ructural Fund status of an area also has few major effects on use of privat e-sector advice. However, the impact of external advice and the extent of l ocal collaboration between similar films are influenced by location, with i mpact generally increasing with the size of business concentration, density and closeness to a business centre; i.e. there are positive effects of urb an location and agglomeration economies. For public-sector support agencies (such as the Small Business Service Business Link, TECs/LECs, enterprise a gencies and also chambers of commerce) the reverse is generally true. Level s of use are locationally influenced, but impact is not. Use tends to incre ase in EU-assisted areas, and in areas with lower levels of business concen tration. This applies to most local agents, but for regional development ag encies there is an additionally strong effect of highest focus of use and i mpact in the most rural and peripheral areas. Thus public agents appear gen erally to be most used and have greatest relevance to SMEs in more peripher al areas where they fill gaps in the market created by agglomeration effect s.