What role for knowledge-intensive business services (KIBS) in de-industrialized regions?

Abstract

This paper provides insights into the structural role that knowledge-intensive business service (KIBS) small and medium-sized enterprises (SMEs) play in de-industrialized regions in the UK at a critical time of change. It establishes what contribution KIBS make to their regional economies in terms of exports to other regions in the UK as well as abroad, but also what is their role in providing support to other sectors in their respective regions. The paper draws evidence from a survey of KIBS SMEs in the North East and West Midlands conducted during the recent recession. The results exhibit a degree of wider generalizability to other regions, which may be characterized as de-industrialized. Results from the West Midlands and North East survey show that although KIBS play an important role in the local economic base of de-industrialized regions, they are not as important as their elite, tradable counterparts in global cities such as London. However, KIBS SMEs in the North East and West Midlands provide important support to their regional clients, many of which are in the declining manufacturing and public service sectors.