Dynamics of New Industrial Knowledge Flows
Edited by Philip Cooke, Carla De Laurentis, Stewart MacNeill and Chris Collinge
Chapter 7: Knowledge-Intensive Business Services (KIBS)
7. Knowledge-intensive business services (KIBS) Simone Strambach INTRODUCTION 7.1 Knowledge-intensive business services firms are organizations that are particularly representative for knowledge-based economies (Gallouj, 2002). Knowledge is not only the key production factor of these service firms, it is also the ‘good’ they sell. Professional service firms, including management consultancy, technical engineering services, research and development, software and information processing services, or advertising and marketing services, mainly provide non-material services. The primary value-added activities consist of the creation, accumulation and dissemination of knowledge for the purpose of developing customized intangible service solutions (Bettencourt et al., 2002). The commodities these firms trade on the market are to a large extent intangible and knowledge-intensive. They are involved in the exchange and conversion of knowledge for economic gain and value-added processes. The knowledge-intensive business services (KIBS) industries have been among the most dynamic segments of the service sector in European countries since the mid-1980s. Initially this growth was primarily seen as a demand-led, cost-driven, outsourcing phenomenon. However, KIBS also play an increasingly important role for the performance of their clients’ sectors, as they provide ‘vital input to the performance of other sectors of the economy’ (EMCC, 2005: 19; cf. den Hertog and Bilderbeek, 2000; Hauknes, 2000; Miles, 2005). This emphasizes the relevance and benefits of KIBS for the knowledge dynamics of their different client industries, often referred to as indirect effects on the system level. Studies of innovation systems and research in service innovation have especially outlined the more central role that KIBS firms...
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