The national debate over spending and responsible fiscal management has directly impacted a number of industries this year. As the stalemate in Washington continues, many trade show experts are wondering what the effect of the further spending cuts will have on the sector.
When the sequestration went into effect earlier this year, there was a noticeable drop in the amount of travel among government employees. EXPO reported that travel expenses for the General Service Administration's SmartPay program declined from $7.3 billion in 2012 to $6 billion for all of this year. Agencies are unable to make it to regional trade shows, limiting the connections they can make with contractors and potential service providers.
In addition to restricting travel, budget cuts have contributed to a drop in the number of publicly funded events. Citing a report by the Center for Exhibition Industry Research, the source noted that government sector-related trade shows during the second quarter of 2013 were down 10 percent from the same time last year.
The source stated that the impact of the sequestration will likely linger for a number of years as procurement times are lengthened on key government contracts. In addition, most state universities will have fewer resources available for research. University groups play an essential role in the development of public-private initiatives that spur growth in industries like healthcare and technology. Without the necessary funding, research groups may cut attendance to industry events, limiting the flow of information between parties and curbing innovation.
"Over time, sequestration and its effects on university research will be a set back to the type of innovation that can come out of universities in the Midwest," Jonathon Wickert, senior vice president and provost at Iowa State, told Iowa State Daily.