Provided by CRU
Cable end-use markets are changing rapidly. There is a steady flow of new standards and new rules affecting recycling, safety, trade, and cable applications. Trade associations help cable makers navigate these changing factors.
Wire and cable companies must address a wide range of internal and external factors to succeed – making top-quality cable is not enough. There are local, national, and international regulations to understand. There is a need for good market information. There are standards to develop and to follow. There are laws and rules under development that could affect cable markets. The cable company employees benefit from training programs. The industry needs good conferences and exhibitions. And sometimes, it’s useful just to meet and socialize with other people in the same business, catch up on colleagues and contacts, etc.
Trade associations address these needs. Throughout the world, there are hundreds of trade associations that can help wire and cable makers, ranging from big international groups with hundreds of corporate members, to small regional or local groups with fewer than 10 members.
A trade association is an organization of individuals or companies who have joined to work toward common goals or interests affecting their industry or profession. Often, these goals include promotion of the group or industry’s interests to government policy makers, programs to increase domestic and international commerce, or educational activities. Trade associations are distinct from trade unions, which aim to promote the interests of individuals to their employers.
The general answer is that the trade association uses the resources of multiple members for objectives that would be difficult for an individual or a single company to accomplish. A review of various trade associations in the wire and cable industry shows the following objectives:
For many individuals, the information and “networking” functions are attractive reasons to stay involved in a trade association. Often, the term “networking” refers to a process of making contacts for finding a new job or advancing one’s career. With the trade association benefits discussed here, the term is used more broadly to refer to a chance to exchange information for example on changing legislation affecting the wire and cable business or future technology trends.
As in many areas of personal and business activities, the Internet has brought big changes in the role of trade associations in the past 20 years. The Internet enables instant communication to other individuals and groups. This makes it easier for trade associations to communicate with members, but it also makes it more important for trade associations to provide opportunities for face-to-face meetings at conferences and meetings. Some trade associations also have developed websites that serve as a clearinghouse for information – offering databanks, directories, indexes, and other tools that members can access or search while logged into the association’s site.
In a newsletter of the Specialty Coffee Association of America, the group’s executive director writes that trade associations date back to the guilds of the Middle Ages, which were organized to promote craftsmanship, and these guilds “largely replaced the religious fraternities that organized craftsmen from Roman times.” Directory listings for US and UK trade associations show some dating back to the 1800s in their current form. In the US, for example, the federal law recognizing the tax-exempt status of trade associations took effect in 1913. Since the 1800s, of course, the number of professions has increased with economic growth, technological advances, and the advent of new industries.
The Standard Industrial Classification system, lists 450 industries using a four-digit coding scheme. The SIC system dates back to 1937 and has been used by the US, UK, and other government organizations to track employment and other industrial statistics. In 1997, the US government developed the North American Industrial Classification System, which uses six-digit codes to categorize 1,065 industries. In both the SIC and NAICS schemes, there are 10 to 15 codes covering wire- and cable-related industries. The number of trade associations and their objectives reflect the complexities of modern industries. Some trade associations are national, some are international, some have local or regional chapters, and some have various committees and subgroups for different objectives.
In the US, there were 92,231 trade and professional association in 2010. This figure comes from the ASAE, which is the Center for Association Leadership, previously known as the American Society of Association Executives. It is an association of people who work for associations. The ASAE attributes the 92,231 figure to the US Internal Revenue Service – the federal agency that collects income taxes. In the US, professional societies and trade associations register with the government to receive a special tax-exempt status, so the federal government has an accurate tally of them.
Based on information from other countries, we estimate the world has several hundred thousand trade associations. In China, for example, there are many industries with provincial and local trade associations, including the cable industry.
In the US, the American Chemical Society (ACS) is the largest professional and trade association. As of 2014, the ACS had 161,000 members, 1,984 full-time employees, US$ 775 million in total assets, and US$ 486 million in full-year total expenses. The IEEE has its headquarters in New York City but is an international society. It describes itself as the world’s largest professional society, having 430,000 members in 160 countries, US$ 500 million in assets, and operating expenses of US$ 425 million in 2013. Like other large associations, the IEEE’s largest expense categories include publications and conferences.
According to the US’s ASAE, “The average trade association spent nearly US$ 1.2 million on program activity in 2009 – which includes publications, conferences, seminars, and other forms of education – and US$ 66,400 on lobbying activity...”