Knowledge Intensive Services' Suppliers and Clients

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coefficients – shifts in economic activity which increase the demand for these
services as contributors to final products. In other words, KIBS are becoming more
significant elements in the activities of the whole economy. Table 3 demonstrates
that business services also contribute to other services’ activities in the Dutch
economy.
2.1.3 Economic performance
Several studies have used macro-data to throw light on the relations between KIBS
use and the economic performance of these users. 8 These studies work with
statistics representing economic sectors, and the hypotheses tested are that there is a
correlation between the use of KIBS inputs across sectors (given from IO data) and
the performance of these sectors. (Thus what is tested is the notion that sectors
whose firms have a high level of KIBS use are sectors with better than average
performance – though we can only infer that this performance actually derives
from the KIBS-using firm.) Measures of performance may be such indicators as
growth and productivity growth rates. We consider two variants of this approach
below.
A cluster analysis of service inputs
Peneder et al (2001) 9 seek to assess the effects of external service inputs on the performance
of EU manufacturing. They use statistical cluster analysis methods to develop
a taxonomy of (manufacturing) sectors based on their use of different service
inputs. However, the data source employed for this is US IO tables for 1992, due to
the lack of precision of large-scale EU data sets. There is a rather bold assumption
8 The issue here is how KIBS contribute to the performance of their users – not how the performance of
KIBS contributes to the average performance of all economic sectors. Baker et al (2002) provide an
example of the latter type of approach. They analyse the labour productivity growth in market
services for 9 EU Member States, the USA and Japan., and also calculate the contribution made by
market services to aggregate labour productivity performance. The OECD’s STAN database
provided the data used here. The researchers depicted a low rate of (measured) productivity growth
and strong employment growth in business services. Divergent trends seemed to emerge in the EU
and US – the EU’s superior performance in the earlier period (in employment and especially in
productivity growth) is overtaken by that of the US in subsequent years. This finding is now fairly
well known (and much argued over) for the economy as a whole. If reliance can be placed on the data
(and there is a strong line of critique of the adequacy of productivity indicators for services) it raises
the question of how these services’ performance is affecting their contributions to their clients, and
thus their clients’ performance.
9 Peneder M., S. Kaniovski and B. Dachs (2001) “External services, structural change and industrial
performance”, Enterprise Papers No. 3, European Commission – DG-Enterprise.