Knowledge intensive business services and client innovation

Abstract

Innovative activities, driven by a knowledge economy era, globalization, and pressure of global competition, have profoundly impacted local economies since the late 1980s. Relevant studies in the recent decade have gradually emphasized the increasing importance and continuous expansion of knowledge intensive business services in current economic development. This topic represents a major trend impacting industrialized economies. Therefore, this study elucidates the roles and functions of knowledge intensive business services as an area innovation system evolves. Exactly how technology-based firms and knowledge intensive business services interact with each other, as well as the roles of knowledge intensive business services, is also analyzed by examining how the area innovation system centered in Hsinchu Science-Based Industrial Park in Taiwan has evolved. Results of this study demonstrate that knowledge intensive business services function in an intermediary role in the innovation system. These services enhance their customers’ capacity for specialization, subsequently improving their evolutionary capabilities and producing tangible innovative cycles.