Knowledge-intensive Service Sectors Research Articles

Konvergencija profitnih stopa u Evropskoj ekonomskoj oblasti - analiza panel podataka

This paper examines profitability disparities across the European economies using the aggregate and sectoral data for the period from 1995 to 2019 and applying a combination of panel unit root tests and the club convergence procedure. For most of the sectors, no convergence was identified at the aggregate level. Convergence within the clubs to multiple equilibrium levels, however, was identified. This convergence pattern was the most typical in the knowledge-intensive service sectors. The exogenous shocks had temporary effects on the economies' profit rates (thus contributing to convergence), whereas the country and sector-specific profitability components were characterized by stochastic behavior (attesting to nonconvergence). Overall, the persistence of profitability disparities was demonstrated. The findings suggest the importance of the firm-specific and local profitability drivers and the limited effects of the macroeconomic and competition policies on profit rates.

Structural change and firm dynamics in Southern Italy

In this paper, we study the structural change in both central-northern and southern Italy, focusing on its implications for productivity dynamics and its micro-economic determinants. We document three main results. First, between 2001 and 2018, the deindustrialization process involved both areas; however, in the southern regions it mostly started after the financial crisis. In the South, the employment shares in low knowledge-intensive services increased more than in the central-northern area, whereas those in high knowledge-intensive services increased less markedly. Second, structural change slowed down productivity growth in the central and northern regions, but had no role in the productivity fall in the South. Finally, in central and northern Italy, employment growth was driven by the net creation of jobs among incumbents and larger firms. In contrast, employment dynamics in the southern regions largely reflected the process of firms entering and exiting the market, in particular in less knowledge-intensive service sectors, and in young and smaller enterprises.

Knowledge Intensive Smes In Transition To Society 4.0: Evidence From The Czech Republic

SMEs have significant role in the area of economy, social and environmental area and also in the areas of social and regional development. The dawn of the Society 4.0 driven by the exponential growth of performance of disruptive technologies of Industry 4.0 is reinforcing the role of knowledge intensive services. University of West Bohemia in partnership with the Institute of Technology and Business in České Budějovice focused on the adaptation of this segment of businesses in the project „Knowledge-intensive services sector adaptation to the conditions of Society 4.0“, supported by the Technology Agency of the Czech Republic. The paper aims to attract attention of the broader community to the project findings and outcomes, to present main research outcomes related to adaptation of SMEs in the service sector, to introduce new insights and approaches to academic and professional community, especially to managers of companies undergoing the transformation process to Industry 4.0 and Society 4.0 conditions, and to raise the level of the knowledge base in the field of SMEs adaptation. The results of qualitative and quantitative research show that most of the companies that answered the questionnaire and participated in interviews were small and micro companies with positive approach to the forthcoming changes, however, there still remains a lot of space for improvement. Companies often use open innovation model to apply knowledge from external resources, as they miss the necessary capacities and face difficult access to financial resources for demanding investments in new technologies and, sometimes, lack of necessary competencies. Relatively low attention is paid to risk management, whose role in current volatile situations becomes extremely important and the company resilience often determines the company failure or success. The project contributed to development of proposals of activities, methods and tools that can contribute to reducing barriers on the road to Society 4.0 related not only to new technologies, but also to broader socioeconomic context, including transformations of jobs and job market. The unavoidable changes of the structure of economy, supply chains, education and training were further emphasized by covid pandemics and current war in Ukraine.

Розвиток експорту наукомістких послуг як каталізатор інноваційної діяльності

At the present stage, the knowledge-intensive services sector is one of the key drivers of the global knowledge-based economy. Knowledge-intensive services cover a wide range of market, financial, high-tech, social and other services based on the knowledge and experience of highly qualified specialists. This type of services acts as a catalyst for innovation activities of organizations based on an organic combination of production processes, research and development activities and consumer needs. Based on the study of a wide range of literary sources on the problems of innovation, innovation activities, knowledge-intensive services the concept of "knowledge-intensive services" was clarified, under which it is proposed to understand a wide range of services that are based on the knowledge of highly qualified professionals and acting as a catalyst for innovation activities of organizations based on an organic combination of production, science and consumers. The results of the analysis of foreign and domestic trends in the export of knowledge-intensive services allow to assert that Ukraine has a significant human resource potential, the implementation of which can provide high volumes of provision of knowledge-intensive services. The positive dynamics of development of knowledge-intensive services export by Ukraine indicates that our country has real prospects to become a successful innovation region in the near future. After all, it has been proven that one of the key catalysts of innovation activity is the services that are based on the knowledge of highly qualified specialists and allow to combine production processes, scientific activity and consumer needs. Thanks to the opportunity to increase exports of knowledge-intensive services, there will be a chance to expand the shares of foreign markets and thus ensure the progressive development of the national economy. Taking into account all the above-mentioned, the actual task for today is the formation and use of tools to stimulate exports of knowledge-intensive services by domestic business entities to enhance innovation activity. This task should be implemented at all levels of the national economy, which will allow obtaining a synergistic effect in this area. Thus, the level model of development of export of knowledge-intensive services as a catalyst for innovation activity was improved. The proposed model organically combines and systematizes the priority objectives of development of the export of knowledge-intensive services, key stakeholders to be involved in the development of export of knowledge-intensive services in Ukraine, the priority ways, vectors and tools of development of the export of knowledge-intensive services, as well as the expected results of the impact of development of export of knowledge-intensive services at the macro-, meso- and micro-levels of the national economy. In addition, the level model of development of export of knowledge-intensive services as a catalyst for innovation activity represents the mechanism of relationships between all structural elements, which allows to achieve a synergistic effect in the development of export of knowledge-intensive services of Ukraine.

Rethinking the digital transformation in knowledge-intensive services: A technology space analysis

The world is in the midst of a digital transformation. An intensified prevalence and use of digital technologies is fundamentally changing organizations and economies. However, the notion of 'digital transformation' is both theoretically and empirically underspecified. This paper rethinks the digital transformation narrative theoretically by embedding the concept in concurrent debates about technological revolutions and neo-Schumpeterian innovation theory. Empirically, the paper specifies the digital transformation by analysing the technological composition of key start-up and scale-up companies in the knowledge-intensive services sector. Undertaking a technology space analysis of 40,754 start-up and scale-up companies derived from the near real-time Dealroom.co database, we analyse which technologies and application domains are currently converging, distilling of key elements of the digital transformation. The paper concludes that the transmission of digital technologies is often indirect through ‘key enabling technology clusters’ that connect the technological vanguard to application domains.

Corporate Failure Risk Assessment for Knowledge-Intensive Services Using the Evidential Reasoning Approach

In this study, a new risk assessment model is developed and the evidence reasoning (ER) approach is applied to assess failure risk of knowledge-intensive services (KIS) corporates in the UK. General quantitative financial indicators alone (e.g., operational capability or profitability) cannot comprehensively evaluate the probability of company bankruptcy in the KIS sector. This new model combines quantitative financial indicators with macroeconomic variables, industrial factors and company non-financial criteria for robust and balanced risk analysis. It is based on the theory of enterprise risk management (ERM) and can be used to analyze company failure possibility as an important aspect of risk management. This study provides new insight into the selection of macro and industry factors based on statistical analysis. Another innovation is related to how marginal utility functions of variables are constructed and imperfect data can be handled in a distributed assessment framework. It is the first study to convert observed data into probability distributions using the likelihood analysis method instead of subjective judgement for data-driven risk analysis of company bankruptcy in the KIS sector within the ER framework, which makes the model more interpretable and informative. The model can be used to provide an early warning mechanism to assist stakeholders to make investment and other decisions.

Gender diversity, productivity, and wages in private Egyptian firms

ABSTRACT Womenʻs employment is not evenly distributed across sectors and firms and this variance in gender diversity can impact firmsʻ productivity and wages in both positive and negative ways according to theory. Using new economic census data from Egypt, this paper explores the relationship between gender diversity, productivity, and wages. Our first finding is that gender diversity is positively associated with productivity and wages in the knowledge-intensive service sector. Our second finding is that there is a negative or no association between gender diversity and productivity and wages among less knowledge-intensive service and both high- and low-tech manufacturing firms. These relationships are robust across different industry classifications and measures of diversity.

Approaches to Efficiency Assessing of Regional Knowledge-Intensive Services Sector Development Using Data Envelopment Analysis

The sector of knowledge-intensive services is one of the fastest-growing sectors in the present-day economy of knowledge, which explains the scientific interest in developing methods of its quantitative assessment. The object of the research is the development of new approaches to the mathematical modeling of the efficiency of the regional knowledge-intensive services sector, based on a distance function approach to assess productivity changes. An approach was proposed to analyze the efficiency of this sector using data envelopment analysis and Malmquist productivity index and its components. The article presents the results of the assessment of indicators characterizing the development of knowledge-intensive services in education, innovation, and ICT obtained from 80 Russian regions for the period 2010–2020. To perform the analysis, the following input variables were used: volume of investments in fixed assets in ICT; share of personnel employed in the ICT; share of internal expenditures on R&D in GRP; the number of personnel engaged in R&D; share of innovative-active organizations and registered patents; funding for higher education institutions; and the number of higher education institutions graduated. Output variables were number of used advanced production technologies in the region; share of innovative goods, works, and services in GRP, and use of the intellectual property. As a result of applying the data envelopment analysis, Malmquist productivity index and its components, data were obtained on the positive dynamics of the development of the knowledge-intensive services sector in Russian regions and conclusions were drawn about the sector’s growth sources due to economies of scale.

Automation of Tasks and Knowledge-Intensive Services: A Sectorial Approach to the Impact of Covid 19 in Argentina

The covid 19 pandemic led to an economic collapse and multiple impacts upon Argentina's labour dynamics. As well as in other parts of the region, falls in employment rates (both due to an increase in unemployment and significant withdrawals from the labour force) were combined with wage reductions for those who were able to keep their jobs. Thus, two important processes for the labour market complimented each other: a structural shock associated with a tasks automation as a reorganisation and substitution of factors, with a cyclical recession caused by the pandemic. The international experience shows the amplifying impact the latter has on the former, generating long-term consequences mainly in routine-intensive jobs. However, the knowledge-intensive services sector appears to be the most capable of cushioning the recessionary shock (both in terms of wages and labour absorption), even with nuances within the sector depending on the extent of the shutdown measures and its capability to switch to remote work. Finally, the task approach is decisive in capturing the ability to adapt both the cyclical and structural processes, absorbing a large part of the explanatory potential that sectoral classifications tend to bring about.

Adaptation of small and medium-sized enterprises in the service sector to the conditions of Industry 4.0 and Society 4.0: evidence from the Czech Republic

Research background. The need for an in-time, efficient and effective adaptation of small and medium-sized enterprises in the service sector to the technical, economic, social and environmental conditions of Industry 4.0 and Society 4.0 is a current problem caused by the introduction of new information and communication technologies, cyber-physical systems and artificial intelligence into all economic industries and areas of human life. The advent of new technologies is changing the entire value chains of Industry 4.0 - Labor 4.0 - Education 4.0 - Thinking 4.0, creating conditions for new business models but also pressure on flexibility and personalization of services or triggering new requirements for cyber security and the interdisciplinarity of access of small and medium-sized enterprises - providers and users of services. The current global COVID-19 health pandemic (2020-2021), with its economic and social impacts on all economic industries, has accelerated the use of disruptive technologies, principles, procedures, methods and tools of Industry 4.0 and Society 4.0 and the need for the support of small and medium-sized enterprises in the service sector in adapting to changes in the business environment. Purpose of the article. The main objective of the research is to validate, evaluate and discuss the functionality and content of the created methodology of adaptation of small and medium-sized enterprises in the service sector to the implementation of the principles, procedures, methods and tools of Society 4.0 and its applicability in business practice, specifically focusing on small and medium-sized enterprises in the area of knowledge-intensive services. An integral part of the research is to assess selected negative and positive impacts of the COVID-19 pandemic on business processes in the context of issues being tackled. Methodology. The methodological procedure to validate the functionality and content of the created methodology of the adaptation of small and medium-sized enterprises in the service sector to the conditions of Society 4.0 is based on the strategy of mixed research. An explorative sequence design was used as a key design of mixed dynamically oriented research, during which quantitative data collection, analysis and evaluation formed the basis for qualitative analysis and evaluation, which resulted in the interpretation and discussion of the research results and, at the end of the paper, the formulation of the issues that will be the next area of scientific research activity of the author’s team. In the quantitative part of the research, Fisher’s exact test was used for the verification of difference statistics in data obtained from testing a sample of micro, small and medium-sized enterprises and from external project application sponsors providing services to this category of enterprises. In the qualitative part of the research, the Atlas.ti software was used for the evaluation of information obtained with respect to the methodology of adaptation of small and medium-sized enterprises for encoding, processing and interpretation of qualitative data and semantic networks were created for the individual sub-categories of evaluation. Findings & Value Added. The research result proved that the adequacy of the content and functionality of the checked methodology of adaptation of SMEs strongly corresponds to the needs and requirements of micro and small enterprises in particular that conduct business in the area of knowledge-intensive services. Barriers, limits, needs and potential in individual categories of micro, small and medium-sized enterprises were identified which are related to the use of technologies and tools of Society 4.0, to new requirements for knowledge and skills qualifications of labor and to the relation of SMEs to innovations in business processes. The results of validation of the methodology of adaptation of SMEs in the knowledge-intensive service sector confirmed that the created methodology of adaptation of small and medium-sized enterprises is applicable to the implementation of the principles, procedures, methods and tools of Society 4.0. in the real conditions of business practice.

Effect Evaluation of Comprehensive Reform Policies of Service Sectors: Enlightenment of System and Mechanism Innovation for High Quality Development

Nowadays the high-quality development of China’s service sectors is still plagued by the lag of the system and mechanism. It is urgent to speed up the optimization of the policy system and development environment, and stimulate the new vitality of service sectors. Therefore, based on the new economic geography theory, this paper solves the problem of selectivity bias and endogeneity through the PSM-DID method to investigate the impact of the pilot policy of comprehensive reform on the agglomeration development of service sectors. We find that the comprehensive reform of service sectors is conducive to promoting the agglomeration development of service sectors in pilot areas. This conclusion is valid after using robustness tests such as changing the observation period and randomly selecting the experimental group. The policy effect shows regional and industrial heterogeneity. The policy effect is more significant in the samples of eastern regions and knowledge-intensive service sectors, but it is not obvious in the samples of northeastern regions and the life service sectors. Furthermore, the mediation model results show that the policy effect is achieved by strengthening regional innovation ability and improving labor productivity. During the “14th Five Year Plan” period, it is fundamental to promote the pilot comprehensive reform of service sectors by relaxing market access, clearing up unreasonable restrictions, and building an efficient collaborative regulatory system. Furthermore, to integrate the reform policies of different departments, optimize the technological innovation environment to adapt to new business models, and improve the talent cultivation and incentive system of service sectors is essential. In general, the integration of various measures is needed to comprehensively promote the prosperity and high-quality development of China’s service sectors.

Knowledge intensive services in society 4.0

The contribution brings attention to the growing role of knowledge intensive services in the Society 4.0. Faculty of Economics of the University of West Bohemia in Plzeň joined forces with the Institute of Technology and Economics in České Budějovice in the project “Knowledge-intensive services sector adaptation to the conditions of Society 4.0” supported by the programme ÉTA of the Technology Agency of the Czech Republic. This contribution summarizes the research results of the completed first phase of the project: the development of two studies focused on identification, analysis and evaluation of methods and tools for knowledge intensive services adaptation and catalogue of requirements to competencies and skills to the changing jobs. Those studies were complemented by the questionnaire research among the relevant companies in Plzeň and South Bohemia regions followed by semi-structured interviews with managers of selected companies. The presented findings, observations, recommendations and feedback from business practice form the basis for the second phase of the project, which is focused on creating a methodology for adapting small and medium-sized enterprises in the services sector to the conditions of Society 4.0.

INNOVATIVE COMPONENT OF THE INCLUSIVE MODEL OF ECONOMIC GROWTH OF EU MEMBER COUNTRIES

Topicality. The new inclusive model of socio-economic development is focused on the well-being of the population, promoting social cohesion and respect for human rights, as well as stimulates innovation and the transition to a carbon-neutral, sustainable and circular economy with human rights at all stages of a value chain. The inclusive model of the economy involves the development of all sectors of the economy and high-tech in particular. The EU has significant potential to achieve an inclusive model of economic growth through the opportunities provided by innovation. Innovations, on the one hand, increase competitiveness, labor productivity, and resource efficiency, on the other, create new jobs that promote human development, increase welfare, reduce unemployment, poverty, and inequality. Aim and tasks. Analysis of the current state and trends of innovation in EU member states. Research results. The article focuses on the study of the innovative component of the inclusive model of EU development. Peculiarities and tendencies of innovative development of EU member states are analyzed. In particular, the change of trends in innovative development of EU member states according to the Global Innovation Index in 2016 and 2018. Features and trends of innovation in EU member states and employment in industries with high and medium technologies and knowledge-intensive service sectors are described. The state of foreign trade is analyzed, such as the structure and volumes of exports of high-tech products for 2010-2018. Conclusion. The results of the study show an increase in the innovation potential of EU member states during 2010, 2019. A slightly lower level of innovation development is observed in the new EU member states. EU member states continue to rank high in the world innovation index and strengthen their position in the world.

Editorial

Editorial

Work productivity management in knowledge-intensive service companies: considerations and challenges

The purpose of this research is to inquire about the different considerations and perspectives that arise regarding the concept of productivity in the knowledge work context, as well as the main challenges that emerge in knowledge workers’ productivity management. A group of managers and workers from organizations in the knowledge-intensive services sector was interviewed. We resorted to content analysis to process the information, taking borrowing elements extracted from the systematic literature review for coding purposes. The perspectives among the interviewees regarding the concept of productivity diverge, and these differences are connected to the type of company and the role of the interviewee: manager or worker. The challenges reported include time management, complexity, heterogeneity, intangibility and task multiplicity, as well as the challenge for managers to set guidelines to measure and monitor productivity without affecting worker welfare. It becomes necessary to approach the concept of productivity from a holistic perspective, and to implement alternative managerial practices that take into account the nature of the work done, worker satisfaction and the diverse perspectives of stakeholders.

The Economy of the Arctic in the Modern Coordinate System

The article deals with modern features of the Arctic economy. It is shown that in those spheres and directions of economic activity, which are associated with the development of natural resources (primarily mineral resources) and focused on obtaining returns on investment, there is a strengthening of the role not only of new knowledge and new technologies, but also significantly increase the role and importance of forms of cooperation of the parties involved in the implementation of projects. This approach allows, on the one hand, to solve the problem of attracting investment in high-risk and, at the same time, high-yield projects, but it also will not allow to fully realize the opportunities associated with the development and use of domestic research and production potential in the implementation of projects in the framework of such “hybrid forms”. One of the direct and immediate consequences of this approach in the practice of field development in the Arctic zone of the Russian Federation (AZRF) is a significant increase in the knowledge-intensive service sector, which meets the needs for equipment and labor by borrowing foreign advanced technologies and the widespread use of interregional watch. These processes lead, in particular, to the fragmentation of the economic space of the country (reducing the degree of connectivity of the economies of different regions), as well as to the stagnation and extinction of urbanized settlements in the Russian Federation.

Identification of factors affecting sustainable development of renewable energy sources in transport

At present motor transport is one of the key components of the formation of a long-term policy of sustainable economic development. Analysis of the structure of energy consumption in motor transport is necessary for better understanding of the factors that affect the increase in the share of renewable energy sources in transport and the effectiveness of specific support measures for the transition to vehicles with minimal or no greenhouse gas emissions. Models of pooled regression, regression with random and fixed effects were built in order to reveal the influence of the chosen factors on the share of renewable energy and electricity in the structure of energy consumption by vehicles. The results of evaluation for 31 European countries in the 2005-2017 showed that the criterion, which allows identifying groups of countries, is the volume of environmental transport taxes per vehicle unit. Countries with higher taxation volumes has such influencing factors as Corruption Perceptions Index, Energy productivity, Total environmental taxes per capita and Employment in high- and medium-high technology manufacturing sectors and knowledge-intensive service sectors. Consumption in countries with lower tax differentiation is influenced by index of research intensity, Corruption Perceptions Index and Shares of environmental and labour taxes.

Knowledge-intensive sectors and the role of collective performance-related pay

ABSTRACT The main contribution of this study is showing that the efficiency effects of collective performance-related pay (CPRP) are more pronounced in knowledge-intensive service sectors (KISs) than in other sectors. The hypothesis is that human resource practices such as CPRP are particularly useful for enhancing firm performance when innovation-supporting knowledge is distributed among multiple skill sets and employee creativity, knowledge creation and knowledge sharing are key success factors for the firm. Cross-sectional estimates obtained for a national sample of approximately 3,800 Italian firms confirm this prediction. These results are validated by adopting a treatment effect approach to solve the self-selection problem.

A Review of the International FLOSS (Free/Libre Open Source Software) Innovation Surveys

Given the substantial growth that software and IT sector has had in the last decade, it becomes relevant to measure the impact that this expansion has had on the development of emerging economies. Specifically, the study of the FLOSS production activity is relevant given its contribution to the Knowledge Intensive Services Sector. The aim of this study is to design an innovation survey for the software sector that considers the FLOSS activity separately. Moreover, the paper describes an extensive systematization, evaluation and analysis of diverse technological surveys carried out on the software activity and the FLOSS surveys available specified at a firm level, as a way to collect all the possible background which allows proposing a questionnaire that measures the particularities of FLOSS.

Usage of the Analogy of Space-Time in Forecasting Changes in Employment in Knowledge-Intensive Services Sector in Poland

The objective of this study was to analyze hypothetical employment in sectors of intensive knowledge in Poland in coming years, assuming a similar course of these changes in comparison to other European countries. In this paper the method of forecasting based on spatio-temporal analogies of Knowledge Intensive Services (KIS) employment was proposed. KIS has been treated as an indicator of innovative development. EUROSTAT database has been used in analysis. The resulting short-term forecasts indicate a likely change in employment in this sector in the coming years.