Incomplete global integration and regional knowledge-intensive service industries

Abstract

The internationalisation of service industries has been a key managerial focus since the late 1980s, and internationalisation became an area of mature research in the international business field in the 1990s. The reason is that service industries confronted a completely new set of challenges such as globalisation. Furthermore, the knowledge-intensive service sectors have developed quickly during the 1990s and became the leading industries in the world through international dealings of service flows. How do the unique features of knowledge-intensive service industries affect global integration and the use of global strategy? This study develops a new approach focused on regional production patterns of knowledge-intensive service industries for exploring important but previously untried beliefs regarding global integration. The findings ascertain that most regional knowledge-intensive service industries have incomplete rather than perfect global integration. Incomplete global integration entails the localisation, or customisation, strategy to be suggested to MNEs in communications services, financial institutions, business services, educational services and health services sectors. One exception to incomplete global integration exists in the educational services production of North America, which displays nearly perfect global integration, and suggests the standardisation strategy for global educational services.