Knowledge Intensive Business Services Sector Research Articles

Productivity and growth decomposition: a novel single-index smooth-coefficient stochastic frontier approach

Abstract Our paper investigates productivity, output growth and total factor productivity (TFP) growth using a novel single-index smooth-coefficient stochastic frontier approach and two firm-level datasets respectively from the high technology (high-tech) manufacturing and Knowledge Intensive Business Services (KIBS) sectors in Norway. The approach considers input productivity and technical inefficiency to be flexible functions of production environmental variables indexed with unknown parameters for more precise estimation of marginal effects of these variables on the frontier and inefficiency. Output growth is decomposed into technical change (TC), input-driven component (IDC) and efficiency change (EC), while TFP growth is decomposed into TC, scale component and EC. The primary objective is to (i) maximise output through the frontier and efficiency channels and (ii) enhance productivity growth through such channels as technical progress and efficiency improvement, specifically tailored for the manufacturing and services industries. The empirical results reveal substantial heterogeneity in technology across firms. Overall speaking, geographical industrial concentration, export intensity and urbanisation positively influence output in both sectors. Technical progress contributes to TFP growth in both sectors; however, TC is biased towards capital in the high-tech sector and driven by labour in the KIBS sector. In addition to TC, TFP growth in the high-tech and KIBS sectors also benefits from EC and IDC, respectively.

The impact of social ties on balanced vs combined innovation: the role of dynamic capabilities and innovation climate in knowledge-intensive business services firms

Purpose This study aims to investigate the impact of business ties, political ties and dynamic capabilities on balanced and combined ambidextrous innovation within the knowledge-intensive business services sector using the dynamic capability view framework. It explores the mediation role of dynamic capabilities in the relationship between business and political tie with these forms of innovation. In addition, it examines how innovation climate moderates the relationship between dynamic capabilities and ambidextrous innovation. Design/methodology/approach Multilevel analysis was conducted on 520 individuals from 61 KIBSs firms in the UAE using AMOS 26. Findings Results showed that BT indirectly affect both balanced and combined AI, with a greater impact on combined innovation. However, DCs did not significantly mediate the relationship between PT and AI. In addition, the IC was found to moderate the effects of DCs on both types of AI, with a stronger effect on combined innovation. Originality/value This study contributes to the literature by highlighting the importance of DCs and climate in the context of innovation and ambidexterity and by advancing the understanding of how these capabilities and organizational factors promote superior innovation.

Is the Knowledge‑intensive Business Services Sector Crisis‑robust or Crisis‑resilient? A Comparative Study of European Union Countries

The paper examines the crisis robustness and resilience of the knowledge‑intensive business services (KIBS) sector. The hypothesis is tested that the KIBS sector is crisis‑robust rather than crisis‑resilient. The study covers 2000–2021, divided into two crisis periods (the global financial crisis and the COVID–19 pandemic) and three non‑crisis periods. The growth rates of value added and employment for the sectors and periods covered by the study are compared. The study is based on data from Eurostat, and it refers to the EU–27, making it possible to carry out comparative research between EU countries, as well as between the EU members before 2004 (i.e., the EU–14 or ‘old’ members) and those who joined in 2004 or later (i.e., the EU–13 or ‘new’ members). The study contributes to the literature by demonstrating that it is necessary to distinguish between the concepts of crisis resilience and crisis robustness in both scientific research and policy strategies, as well as to pay more attention to the issue of crisis robustness. It also makes a contribution by indicating that KIBS have significant potential to contribute to building crisis resilience and crisis robustness in the companies that use them and in the whole economic system. The empirical results demonstrate that the KIBS sub‑sectors, i.e., computer and information services and professional, scientific and technical services, are crisis‑robust, which is not the case for the manufacturing sector. The KIBS sector’s ability to maintain stable growth during crisis periods is more visible than for other service industries. The Polish sector of professional, scientific and technical services showed the most stable upward trend through all analysed periods. Poland also recorded impressive growth in value added in computer and information services during the pandemic period, but when considering the whole period, other countries achieved better results, e.g., Romania.

The Role of Embeddedness of Migrant Start-ups in Local Entrepreneurial Ecosystems During the COVID-19 Crisis

As with all start-ups, the COVID-19 pandemic has led to a changing environment for migrant start-ups. These changes have posed many challenges to altering strategic behaviour and approaches to driving business. We explored migrant start-ups’ embeddedness in entrepreneurial ecosystems by analysing data from 14 semi-structured interviews with start-ups from Berlin's knowledge-intensive business services sector. We argue that the success of migrant start-ups during crises is dependent mainly on the embeddedness in the local entrepreneurial ecosystem. Thus, we expect entrepreneurs to utilise local networks, infrastructures and interactions to help them cope with the challenges and pave the way for local and international business activities. Our results indicate that embedding in local entrepreneurial ecosystems and a sense of belonging, especially during the business formation phase, play a vital role for migrant start-ups in general and crisis. Revitalising the concept of local embeddedness while considering business development stages, this study challenges the prevailing notion of transnational networks as the sole determinant of entrepreneurial success. Instead, we advocate for greater recognition of the significance of accessing local resources, including market knowledge, social relationships, and institutional support, as fundamental factors driving business development and crisis management within the host country. By recognising and nurturing these local resources, policymakers and support organisations can create an enabling environment that empowers migrant start-ups to thrive, adapt, and contribute to the local EE and economic wealth.

Colocation of Entrepreneurs and New Firm Survival: Role of New Firm Founder’s Experiential Relatedness to Local Entrepreneurs

Geographical clustering (colocation) influences new firm survival; however, not all new firms within a cluster are impacted equally. In this paper, we elaborate on how the colocation of local entrepreneurs may have different influences on new firm founder's learning depending on his/her fit, in terms of his/her experiential relatedness, to that of local entrepreneurs. We then associate such founder’s learning with the higher survival of his/her new firm. We test our hypotheses using a matched founder-firm dataset that covers the population of the knowledge-intensive business service sector in Sweden during 2001–2012. We find support for our propositions concerning the relatedness of new firm founders’ experiential background to that of local entrepreneurs. Specifically we find that high level of relatedness to local entrepreneurs enhances the survival rate of a new firm started by a novice founder, whereas intermediate level of relatedness suits better for a new firm started by an experienced founder.

How Knowledge Management helped Knowledge Intensive Business Services in Surviving COVID-19 and Creating Resiliency for New Normal: A Case Study of a GRC Training Firm in Indonesia

Since early 2020, COVID-19 pandemic has attacked many business sectors in many countries. In Indonesia, the government reacts to this situation by issuing several regulations, one of which is the large-scale social restrictions (PSBB) regulation. This regulation affects many business sectors, including Knowledge Intensive Business Services (KIBS) sectors. KIBS sectors have been developing quickly, especially in developing countries like Indonesia. Knowledge plays a crucial part for KIBS firms as these firms depend heavily on their workers’ knowledge. In this study, Lembaga Pelatihan Kerja Mitra Kalyana Sejahtera (LPK MKS) is being used as the research object for conducting the research. LPK MKS is a Governance, Risk, and Compliance (GRC) training firm, which included as one of KIBS business sectors. This study uses case study methodology by focusing on obtaining deep understandings about the knowledge management practices in KIBS training firm. The author obtains all the necessary data through in-depth qualitative interviews and secondary data. From the collected and analysed data, LPK MKS has implemented all of the success factors for managing knowledge. While the implementation of leadership and ICT are more notable, the implementation in organisational infrastructure is still not ideal. Nonetheless, the overall implementations of knowledge management help the firm in surviving the COVID-19 pandemic era and creating resiliency to face the new normal condition.

The Impact of the Coronacrisis on KIBS Sector

Knowledge-Intensive Business Services (KIBS) are problem-solvers for other organizations. The coronacrisis affects KIBS directly, but also means that their clients are confronting new problems. How are KIBS addressing these two sets of challenges? This paper draws on material available in the trade and industry press, on official reports and statistics, and the early academic studies addressing these themes. We find that KIBS have been active (alongside other organizations) in providing a substantial range of services aimed at helping their clients (and others) deal with various contingencies thrown up by the crisis. Not least among these is the need to conform to shifting regulatory frameworks, and requirements for longer-term resilience. KIBS themselves have had to adapt their working practices considerably, to reduce face-to-face interaction with clients and within teams collaborating on projects. Adaptation is easier for those whose tasks that are relatively standardized and codified, and it remains to be seen how far a shift to such activities - and away from the traditional office-based venues of activity - is retained as firms recover from the crisis. KIBS are liable to play an important role in this recovery from the crisis, and policymakers can mobilize their services. Some KIBS are liable to be critical for rendering economies more resilient in the face of future pandemics and we argue that these firms are also important for confronting the mounting climate crisis.

The contribution of Human Capital to the performance of Knowledge-Intensive Business Services

Purpose: The purpose of this paper is to investigate the relation between human capital and the performance of the various types of knowledge-intensive business services (KIBS). Research Methodology: The analysis conducted on business services industry level took into account the role of education in knowledge transfer, a major factor enriching the KIBS industry. A conceptual framework based on cluster analysis (CA) and classification and regression trees (CART) was developed to analyse human capital, the main asset in the KIBS sector (according to the resource-based theory), and its relations with the performance of KIBS providers. Results: The results pointed to the significant differences between various types of knowledge-based services. Findings suggest that there could be applied additional approach to classifying the KIBS services into three clusters according to the business characteristics (including human capital). Our third cluster closely related to human capital (HC) and information and communication technologies (ICT) demonstrated the best business performance. The results confirmed that KIBS providers with high average remuneration and high wage growth dynamic noted over doubled performance indicator (measured as profit growth). In that group of KIBS providers were (a) Software and IT companies, (b) Temporary employment agency activities and (c) Other human resources provision. Limitations: Our analysis is based on statistical data gathered by a public entity covered 3125 firms aggregated into twenty service types, which limits the scope of the research questions. Contribution: This study contributes to the state of knowledge of the performance dynamics of the various business services. Keywords: Business Services (BS), Human Capital (HC), Performance, Knowledge, Education

Service creativity reinforcement and firm performance

PurposeMany service firms have adopted creativity reinforcement mechanisms to manage employee-based service creativity so as to pursue their performance growth. However, its impact on firm performance has rarely been investigated in the extant research. The purpose of this paper is to satisfy this knowledge gap through an examination of how service creativity reinforcement (SCR) affects a firm’s performance.Design/methodology/approachTwo samples were used to test the hypotheses. The first sample included a total of 4,381 service firms and was analyzed by using a traditional moderated regression method in relation to sales growth as the outcome variable. Due to a number of missing values, the second sample was reduced to 1,481 service firms. This sample was analyzed by using a moderated fractional regression method and the outcome variable was innovation performance. Furthermore, a multi-valued treatment approach with the augmented inverse-propensity weighted estimator was adopted to assess the performance effect that was associated with each of the SCR mechanisms.FindingsStatistical analyses suggested that SCR positively affected both the firm’s performance and its innovation performance. Specifically, the stronger performance effects of SCR were associated with firms that had high innovation intensity, were small service firms and were part of the knowledge-intensive business service (KIBS) sector. The results also found that brainstorming sessions, a multi-disciplinary team approach, task rotation and non-financial incentives had greater performance effects than other mechanisms, especially for firms in the KIBS sector that had high innovation intensity. In addition, the results indicated that team-level mechanisms were more effective in developing highly innovative services than were individual-level mechanisms.Originality/valueThis study has contributed to the service literature by developing a contingency framework for SCR. This study has also advanced service research through the presentation of contextual effects associated with each mechanism of SCR.

Does public entrepreneurial financing contribute to territorial servitization in manufacturing and KIBS in the United States?

ABSTRACTThis study uses territorial innovation theory and research advances on territorial servitization to examine the effect of public financing on firm survival and performance in two critical sectors in the United States. The goal is to inform servitization efforts on the effect of public entrepreneurial financing to support the renaissance of manufacturing and the ever-growing knowledge-intensive business services (KIBS) sector. Results indicate that public start-up and expansion capital, as government loans and guaranteed loans, decrease firm survival in the KIBS sector and firm receipts in both sectors, when compared with private sources of capital. In sensitivity analyses, no effect is observed for government grants.

Türkiye'de Bilgi Yoğun İş Hizmetlerinin (BYİH) Bölgesel Uzmanlaşma Örüntüsü

Bilgi Yoğun İş Hizmetleri (BYİH), ekonomik kalkınma ve yenilikçiliğinin önemli itici gücü olarak algılanmaktadır. BYİH genel olarak, ekonomik güç, bilgi üretimi ve bilgi transferi ile ilgili olarak bölgesel ve ulusal ölçekte kalkınmanın en önemli alanlarından biridir ve bu nedenle BYİH'nin coğrafi yoğunluğunun bölgeler açısından kritik bir faktör olması beklenmektedir. Bu makale, bilgi-yoğun iş hizmetleri faaliyetleri kavramını tanıtmayı ve bölgesel kalkınmada BYİH'nin rolünü, özellikle bölgesel uzmanlaşma açısından incelemeyi amaçlamaktadır. Bu amaçla detaylı sektör verilerinden yararlanılmıştır. BYİH faaliyetleri üretici hizmetlerin bir alt dalı olarak görülmekte ve 10 alt sektörde tanımlanmaktadır. Bu 10 alt sektör, Türkiye İstatistik Kurumu (TÜİK)'ndan alınan 2009 ve 2015 yıllarına ait işyeri ve istihdam sayısı ile ciro verilerine göre analiz edilmektedir. Bu analizler Türkiye'deki 26 adet Düzey-2 bölgesi üzerinden yapılmıştır. Analiz için yerelleşme katsayısı (LQ) tekniği kullanılmaktadır. Sonuçlar, telekomünikasyon sektörü dışında tüm BYİH sektörlerinin büyük şehirlerde uzmanlaştığını göstermektedir. BYİH'nin bölgesel uzmanlaşma örüntüsünü ortaya koymak, bölgesel planlara ve politika yapıcılara yol göstermesi açısından önem taşımaktadır.

New KIBS on the bloc: the role of local manufacturing for start-up activity in knowledge-intensive business services

ABSTRACTThis study investigates the effect of local manufacturing on start-up activity across knowledge-intensive business services (KIBS) industries by relying on the natural experiment of German reunification. KIBS did not exist in the former socialist East Germany. The findings show that local manufacturing affected the co-location of new KIBS firms in East Germany while there was no such effect for West Germany, where the KIBS sector was already well established. The East German effect was fading over time when the KIBS sector became more established. The result suggests that strengthening the industrial base in peripheral regions could induce knowledge-intensive start-up activity.

The role of intermediate demand and technology for international competitiveness of the KIBS sector: evidence from European Union countries

ABSTRACTIn this paper, it is tested whether intermediate consumption of knowledge-intensive business services (KIBS) in the economy and technology advancement in the KIBS sector (measured by R&D expenditures) affect the international competitiveness of a country's KIBS sector. First, the definition of KIBS trade, in light of the available data from the balance of payments statistics, is presented. Then, using a panel data set from the EU countries over the period 2000–2009, a panel cointegration approach to estimating the model is adopted. The empirical study shows that among the old EU countries only those with high income are competitive in KIBS exports. Estimation results demonstrate that their competitiveness in KIBS exports is positively determined by domestic and imported KIBS intensity in the economy, as well as by the KIBS sector's technology advancement. The new EU countries usually were not competitive in KIBS exports, and those which were successful in this field seem to have derived their success mainly from international outsourcing rather than from building their own capacities. Their competitiveness in KIBS exports was positively determined by the KIBS sector's endowment in human capital, or via domestic KIBS intensity in the economy together with lower labour costs.

Intellectual capital, knowledge management and social capital within the ICT sector in Jordan

PurposeThe purpose of this paper is to empirically investigate the mediating effect of social capital (SC) on knowledge management (KM) and intellectual capital (IC).Design/methodology/approachA conceptual model of the connections between IC, KM, and SC was developed and the posited hypotheses were tested using a survey data set of 281 questionnaires collected from knowledge workers working in 72 information and communications technology companies operating in Jordan.FindingsThe findings show that knowledge documentation and knowledge transfer emerged as having the strongest effects on IC, followed by knowledge acquisition and knowledge creation, while knowledge application was found to have an insignificant effect. Also, knowledge transfer and knowledge acquisition emerged as the only two significant processes for the development of SC. Moreover, SC was found to partially and significantly mediate the effects of all processes on IC.Practical implicationsTo promote the development of IC, particularly, in a knowledge-intensive business service (KIBS) sector, documentation, transfer, acquisition, and creation of knowledge are especially effective processes. Furthermore, SC can be significantly enhanced through ensuring effective internal knowledge transfer and acquisition practices. Nurturing IC in a knowledge-intensive context can also be significantly enhanced through looking at the firm as a cooperative knowledge-sharing entity, i.e. investing in SC.Originality/valueThis is the first empirical study that has examined the links among KM processes, SC, and IC in a KIBS sector within an “oil-poor,” “human resource-rich” Arab developing country context.

Sectoral co-movements of employment growth at regional level

ABSTRACTThis paper presents a comprehensive study of sectoral co-movements of employment growth in the entire Dutch economy. We construct different macro typologies according to manufacturing versus services, innovativeness, labour skills and position in the value chain, thus expanding the list of potential logics of sectoral interrelations. Using a vector autoregression model, we assess whether and how growth in a macro-sector, and in a given region, can predict growth in the same or other macro-sectors, in the same or in other regions. Our findings bring to light the inter-regional nature of intersectoral linkages, as well as the existence of complementarities between sectors. Supporting the growth of innovative firms could have positive externality effects, especially in the Knowledge-Intensive Business Services sector which is associated with the growth of the entire economy.

Survival of entrepreneurial firms: the role of agglomeration externalities

This paper analyzes the role of various types of agglomeration externalities on the survival rate of entrepreneurial firms. In particular, we trace the population cohort of newly-established and self-employed Swedish firms in the Knowledge-Intensive Business Service sector in 1997 up to 2012 and investigate the role of Marshallian and Jacobian externalities on the survival of these firms. We find that only Jacobian externalities (diversity) is positively associated with the survival of entrepreneurial firms. Not all Jacobian externalities matter though. Only the higher the ‘related variety’ of the region in which an entrepreneurial firm is founded, the higher will be the survival chance of the firm, while ‘unrelated variety’ barely has any significant correlation. The result is robust after controlling for extensive firm characteristics and individual characteristics of the founders. The main message here is: for a newly-established entrepreneurial firm, not only it matters who you are, but also where you are.

Knowledge-intensive services and local development: An empirical analysis of networks, channels and customization processes

The present study embraces a theoretical framework developed in the field of business management—so-called 3C—to investigate the factors that hamper the capacity of Knowledge Intensive Business Services (KIBS) firms to create economic value for the locality. It addresses, in particular, the factors that: i) prevent KIBS firms from establishing collaborative relationships with potential partners; ii) negatively affect the relationships between the examined KIBS firms and their suppliers as well as distributors; iii) limit KIBS firms’ capacity to meet users’ needs. A qualitative inquiry conducted on a random sample of one hundred KIBS firms located in a Southern Italian province yielded a comprehensive view of the relational, organizational, and technological factors that limit the value creating capacity of the studied firms. The study discusses the implications that the obtained results may have on the process of development of the studied area and proposes suggestions for local policy-makers and practitioners in the KIBS sector.

Structural change and blurred sectoral boundaries: assessing the extent to which knowledge-intensive business services satisfy manufacturing final demand in Western countries

ABSTRACTThis paper focuses on the vertical integration of knowledge-intensive business services (KIBS) into manufacturing sectors, using a subsystem approach to input–output analysis. It aims at correctly assessing the process of structural change that has occurred in the four main European countries (France, Germany, Italy and the UK) over time (1995–2005). It does not focus on KIBS sectors per se, but on their function as carriers and sources of knowledge which influences the performance of sectors, value chains and clusters across industries and within countries. The analysis shows that KIBS’ contribution to satisfying the final demand of manufacturing is in general largely underestimated; that KIBS vertical integration into manufacturing has increased over time in all the countries investigated except the UK; and that the extent to which manufacturing sectors outsource to KIBS is significantly affected by their technological intensity.

Subsidiary Knowledge Development in Knowledge-Intensive Business Services: A Configuration Approach

The international marketing literature has suggested that the characteristics of the subsidiary–headquarters relationship play an important role in subsidiary knowledge development within the field of multinational corporations. However, few studies have examined the association between the subsidiary–headquarters relationship and the subsidiary strategic role and its effects on subsidiary knowledge development. In this article, the authors first examine the effect of four subsidiary–headquarters relational characteristics (socialization mechanisms, autonomy, shared values, and internal embeddedness) on subsidiary knowledge development. Then, building on configuration theory, the authors employ two perspectives of fit (moderation and profile deviation) to investigate the impact of fit between strategy and relational characteristics and examine their effects on subsidiary knowledge development. Using data from 184 U.K. foreign-owned subsidiaries operating in the knowledge-intensive business services sector, the authors confirm that internal embeddedness, socialization mechanisms, and autonomy are positively related to subsidiary knowledge development. Furthermore, the findings support the moderation and profile deviation perspectives and indicate that aligning the subsidiary's strategic role with relational characteristics can lead to superior knowledge development.

Spatial Dimension of Knowledge Intensive Business Services in Russia

Knowledge intensive business services (KIBS) are characterized by high concentration in large urban areas due to the presence of more developed infrastructure, higher human capital development, proximity to the large customer, etc. However, companies in the KIBS sector have potential for development (new knowledge, experience) in collaboration with agents located in other regions.This paper is focused on the spatial aspects of the knowledge intensive business services sector in Russia. The study is based on a unique empirical data from mass surveys of Russian producers and consumers of KIBS. Comparative analysis of the incoming and outgoing flows of KIBS in Russian regions helps us to classify federal districts by their involvement in KIBS exchange, and to map the intensity of these flows. We have identified regions that are actively involved in both the purchase of services and their delivery outside the regional boundaries (Volga and Central Districts); active regions of consumption with an average level of production (Northwestern and Siberian Districts); and the passive regions, who are only weakly involved in inter-regional exchange of knowledge intensive business services (Ural and Southern Federal Districts).