Knowledge intensive business services: prospects and policies

Purpose - The purpose of this paper is to examine knowledge intensive business services, or KIBS for short. KIBS are one of the fastest growing areas of the European economy, and are increasingly important contributors to the performance of the sectors who are their clients. Design/methodology/approach - KIBS are distinguished from other services and knowledge-intensive activities, and statistics on KIBS in the European Union are examined, highlighting key similarities and differences in their development across Member States Findings - KIBS are continuing to grow at rapid rates, and are experiencing qualitative change. The growth is associated with outsourcing, the internationalisation of services, and the growth in demand for certain forms of knowledge. Many KIBS sectors are becoming more concentrated (though most KIBS sectors feature a higher share of small firms than does the economy as a whole). As KIBS supply a wider range of services, overlap and convergence between different KIBS sectors has grown. But as some KIBS become more involved with their major clients' strategies, it is possible that some services will become specialised, while others integrate their inputs for clients. Research limitations/implications - Scenario analysis is used to examine policy issues concerning KIBS. These are based on deskwork: group discussion would be a valuable complement to this approach. Practical implications - A range of policy issues, responses to these issues, and the rationales and challenges that policies may confront are spelled out. The article calls for much more explicit consideration of KIBS in innovation and other policy areas. Originality/value - KIBS remain poorly studied, and their future development has rarely been considered. The implications for innovation and other policies are examined more explicitly and in greater depth than in previous studies.