For and against? An exploration of inadvertent influences of policies on KIBS industries in the Finnish policy setting

Abstract

Knowledge-intensive business services (KIBS) are a key sector in any knowledge economy, and as such they are subject to multiple policy influences. This article considers the inadvertent impacts of policies on KIBS, using examples drawn from the policy setting in Finland. The key elements of the policy environment are described, with particular attention to innovation policy and small and medium enterprise support policies. The direct and indirect effects of public policies on KIBS are explored with particular attention to effects on innovativeness. The role of research and training organisations as a semi-competitor of KIBS is highlighted. The examples analysed suggest that policy has simultaneously both positive and negative impacts on the innovativeness of KIBS industries.

Keywords:

• KIBS
• innovation policy
• economic development
• public services

Acknowledgements

The authors are grateful for the comments by Soile Kotala and Markku Sotarauta.

Notes

Finpro. See e.g. Georghiou et al. (2003) for descriptions of the main actors in Finnish public and semi-public business services from innovation system perspective, and Kuusisto and Kotala (2008) for a description focused on service industries.

Miles et al. (1995) are usually credited with formulating the concept of KIBS, but at least O'Farrell and Moffat (1991, p. 220) have used the phrase before, albeit apparently as an alternative expression for strategic business services.

See Aghion, Harris, Howitt, and Vickers (2001); for discussion of the Schumpeterian hypothesis linking monopoly and innovation see Geroski (1990), Gilbert (2006), and Love and Roper (1999).

Hjalmarsson and Johansson's (2003) arguments for similar changes in some public advisory services draw on client SME perspectives.