Increasing Role of Services in Competitive Power and Innovativeness of Firms and Industrial Clusters

Abstract

The aim of this paper is to discuss the importance of different types of global services for industrial firms and clusters in terms of their economic competitiveness and innovative performance. The theoretical debates argue that globalization, deregulation and the new production organization make it necessary to use global services that are supplied easily with the help of new telecommunication technologies. The existing empirical studies provide some supporting evidence. However, they also indicate that global service firms can be attained by only smaller numbers of industrial firms and clusters. Still, in-house services besides temporal and informal mechanisms are important to meet the needs of the specialized services, even for the firms that try to become a part of the global production system. The paper focuses on three main questions: “What types of global services are becoming crucial for manufacturing firms and what type of services are still local and national? Is there a significant difference between the characteristics of firms that use the same type of services? To what extent is having access to global services important for the innovativeness of industrial firms and clusters? This paper looks for the answers to these questions based on existing case studies as well as this study of three industrial clusters in Turkey. The findings indicate that there is not a perfect match between theory and empirical evidence and there is a need for more refined theoretical discourses on industry–service relations.