“We need to combat the insolvency strategy of business associations to the detriment of other entities whose Opex and Capex are financed entirely by state subsidies...”
José Eduardo Carvalho took part in the 1st Douro Business Forum, an event organized by NERVIR, which for two days reflected on the current situation and future prospects of the Douro region. The challenges and future of companies in low-density territories were discussed; the impact of Portugal 2030 and the PRR on companies; and associations as a critical factor for the development of territories and companies. In addition to these plenary sessions, sectoral meetings were held in Vila Real, Alijó and Vila Pouca de Aguiar: agri-food; wine; tourism; manufacturing; engineering and construction; new technologies; and digital. The event ended with B2B meetings between companies from the region and Chambers of Commerce and Industry from various countries.
In his speech, the President of the AIP Board clarified concepts about the business association movement, the distinction between the core of confederations and associations, the associative market and the reasons for the emergence of new entities that are taking up space in the intermediation between public policy and companies. He summarized the role of business associations in regional development over the last 30 years, noting that the innovative nature of the work of these organizations was the “introduction of territorial competitiveness into their mission and assuming themselves as instruments or actors of regional development”.
He considered the situation facing business associations to be challenging, due to the loss of the monopoly on associative intermediation between public policy and companies. At the moment, there is “a concerted strategy by some actors aimed at making the work of business associations irrelevant, based among other arguments on the criticism that they survive on a supposed dependence on the state.” The President of AIP's Board of Directors dismantled this narrative by giving examples that these entities have “Opex and Capex financed by grants and operating subsidies, which is not the case with the vast majority of associations that present operating accounts in which market income is higher than operating subsidies, and which use services provided to co-finance the implementation of public policy.” He also warned that this strategy must be combated in an assertive and courageous manner, and argued that “there must be no distortion of competition in the associative market.”
José Eduardo Carvalho also looked at the fundamental conditions that an association should have in order to have a significant capacity to intervene in the business fabric, regain the trust of public institutions and lead the associative market. He gave the example that in a region with “6200 commercial companies (enterprises), if an association doesn't have a membership rate of between 10/15%; member companies that represent 50% of the region's turnover and GVA; income of between 1.5/2 million euros and at least 11 technicians, it's unlikely to be able to carry out an activity plan that adds value to the companies and the region.”
He ended his speech with a set of proposals to improve the value proposition of associations and to strengthen their role in regional policy, challenging the fact that “associations are only represented in the advisory bodies of the CIMs and CCDRs and are far removed from the design and negotiation of regional policy.”
