About Trade Associations

Trade associations are representative bodies for groups of companies or other organisations with common interests. Most associations cover a specific sector or subsector of industry, but some cover processes or functions. There are three essential characteristics of a trade association:

• A member-based organisation, the members being businesses not individuals. The term “business” can be defined narrowly (for example profit seeking companies) or more widely (all organisations which have to operate as businesses regardless of whether they are seeking to make a profit).
• The ultimate governing body comprises representatives of members, and members are involved more generally in the decision-making process.
• The members must have a common interest.

Many associations, particularly larger ones, also have a fourth characteristic, that is a representative body, putting forward the collective position of the members, generally to government departments and agencies and regulators, but also to the media and to other opinion formers. Information is provided to members based on this representative work.

Many associations also provide other services such as the provision of industry statistics, general market information, training, conferences and exhibitions, but these are not essential characteristics and are also provided by other bodies

There are a number of different types of trade associations with blurred dividing lines between the types. The most common types are:

• Industry associations, representing providers of a particular good or service. Such associations can be wide-ranging (covering say the whole of the insurance industry or the whole of the food and drink industry) or narrowly based (say private medical insurers or ice cream manufacturers). More widely based associations tend to have committees, special interest groups or forums to represent particular sub-sectors.
• Horizontal associations, representing organisations with common characteristics or undertaking particular functions across a number of sectors, examples include the Federation of Small Businesses, MakeUK or the CBI.
• Geographical associations, representing organisations in a sector operating in a particular region or nation.
• Federations, are associations of associations. For example, the Food and Drink Federation comprises a number of associations representing particular sub-sectors of the food and drink industry. However, to complicate the matter some federations have direct membership by the major companies which operate across the whole sector and therefore at the same time are both federations and single company associations. Confederations, logically, are associations of federations.
• International associations, generally comprise federations of national associations. In the few industries where regulation operates at the international level (for example air transport) or there is a single international market (some financial instruments).

Just as there is no sharp dividing line between types of trade associations, so there is a blurred division between trade associations and other industry bodies.

• Professional bodies comprise individuals in a sector and are focused on training and education as well as representation. Some professional bodies also regulate their industries, partially or wholly, with individuals needing the appropriate qualification to practice and being subject to disciplinary procedures should they perform unsatisfactorily.
• Chambers of commerce represent organisations in all sectors operating within a particular town or wider geographical area. Any representational work is confined to local issues. Generic training and promotion are among the functions of local chambers. The national body for the chambers, British Chambers of Commerce, besides representing and providing services to local chambers, also seeks to speak of behalf of industry and commerce generally.
• Promotional bodies promote an area, a sector or an activity within a sector.
• Employers’ organisations provide only an employment service to their members. This can range from collective bargaining for the whole industry to the provision of information, advice, training and consultancy services. Some employers’ organisations are also trade associations but others have a wider scope in terms of the sectors covered.
• Industry Forums and Sector Skills Councils exist in a number of industries. These have a quasi-official status and generally involve trade associations although in practice they can also compete with them. 

There is no definitive map of the UK trade association sector, though TAF maintains records of close to 1,000 that are active in the UK representing every sector imaginable. TAF currently counts just over 180 UK trade associations as members, who in turn represent close to 190,000 businesses.

We are currently working on a comprehensive mapping of the UK association sector which we hope to publish shortly -  watch this space!