The Growth of Knowledge-Intensive Business Services: Innovation, Markets and Networks

Abstract

The increasing economic focus on knowledge has spurred the growth and development of knowledge-intensive business services (KIBS). This paper seeks to further understand the evolution and growth of KIBS firms and the nature of their networks and markets. It is argued that changing competitiveness conditions are heightening the requirement for firms in most sectors to innovate and take advantage of their core competences and knowledge. This is resulting in a growing trend by firms to outsource KIBS. The paper draws on interview data from a sample of KIBS firms in London and Helsinki. It is concluded that the growth of KIBS is stretching the limits of globalization through the creation of new spaces of knowledge flow. However, regions continue to be key knowledge bases and remain the primary spatial architecture underlying the systems of innovation within which KIBS are positioned.