Knowledge Intensive Services' Suppliers and Clients

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Individual manufacturing industries in the EU were clustered into groups sharing
similarities with respect to use of KIBS and other inputs. 4 clusters of industries
were distinguished:
• high inputs of transport services
• high inputs of retail and advertising services
• high inputs of knowledge-based services
• other industries.
The analysis tended to reveal higher productivity and higher growth in value added
for the third group of manufacturing industries in the EU. Lower declines in
employment, and greater quality differentiation (lower price competition), were
also noted for industries with high inputs of knowledge-based services.
As noted, it would be valuable to extend this work with European clustering data;
not least to see how far EU patterns of KIBS use correspond to those in the US. It
might be hypothesised that stronger relations should be found where locally
validated clusters are identified and employed. Service sectors might also be
included in the cluster and subsequent analysis.
But the general thrust of the data analysis tends to support the view that the use of
KIBS enhances the performance o those sectors that consume more of them. The
same conclusion is reached from a rather different set of IO approaches.
Econometric estimations
Several recent studies use IO data in production function analyses. Antonelli
(2000) argues that KIBS contribute to innovation and thus to performance by
enabling information flows that support learning and adaptation. (In addition to the
classic tools for increasing innovation and absorption capacity of in-house R&D
etc.).Two types of KIBS were differentiated (reflecting this emphasis on
information flows): communication services and business services. The rates of
growth in the use of these two types of knowledge service should be associated with
increasing productivity among their users (again, at a sectoral rather than firm
level). IO data for a number of European countries (Italy, UK, Germany, France
and the Netherlands) was tested, and demonstrated that in all five countries. The use
of business and communication services was correlated with their rate of growth.
(See Box 1) The correlation with use of communications and business services
taken together was statistically significant for most countries (weak results for
Germany and the Netherlands). In analyses that only included either business or
communication services, the results for the Netherlands were again weak, while the