CORDIS Archive

Knowledge-intensive business services

Abstract

This study explores 15 cases in the business services sector mainly in environment and information technology. It follows a path suggested by the OECD's 'Jobs Study' and the White Paper on Growth, Competitiveness and Employment, which points to the convergence of manufacturing industries and services.

The study highlights the factors that draw business services closer into the innovation system as both genuine sources of innovation and as intermediaries in the diffusion of new technologies. Among these factors is the trend towards out-sourcing of more and more complex part of investment projects, production, and non-core operations. The study concludes that there is a large interaction between manufacturing industries and services in their contribution to the pace of innovation.

Main findings

Services as a whole are the major investors in new IT - purchasing over three-quarters of IT hardware (by value) in the USA and UK, for example.

Other features are the lack of R&D expenditure and organisation, a high level of customisation, and close supplier-user relations.

Certain services are also carriers, or agents of transfer of new technologies - e.g. consultancies and training services - while interacting frequently in the development of standards and regulations. Yet others are also integral producers giving rise to substantial growth in employment.

Being often at the forefront of a knowledge intensive part of the economy, questions concerning IPR increasingly attract the attention of the service sector.

The strongest case for the role of knowledge-intensive business services comes from geographical analysis of the contribution of producer services to regional development. While these services do not seem to be a sufficient condition to guarantee regional dynamism, they do emerge as a necessary one.

Policy implications

• Knowledge-intensive business services (KIBS) which have a high level of professionalisation, need collective fora to further develop quality standards and quality control mechanisms, for example, just as they need to formulate their internal innovation strategies.
  
  
• Action is needed to facilitate the access of KIBS to public R&D programmes, to integrate them more firmly in innovation networks, and to assure a more level playing field for competition between KIBS within the framework of industrial policy interventions.
  
  
• Support should be given from programmes which demonstrate in particular to SMEs the relevance of using services supplied by KIBS.
  
  
• The design of industrial policy has to take into account the importance of user-supplier relationship involving KIBS, and should start with improved statistics and monitoring.
  
  
• Training and education systems should recognise the particular mixes of organisational, interpersonal and technical skills that are required by KIBS.
  
  
• High-level work is required to establish appropriate policy guidance on IPR issues as they affect KIBS.
  
  
• Standardisation bodies and industrial trade organisations have an important role to play by ensuring an even playing field for large and small KIBS.

Innovation in the firms