Expertise in Business; Long-term Development and Prospects of Knowledge Intensive Business Services (KIBS)
Chapter One
Preamble of the Study
The significance of innovation activities for economic growth has become more and more pronounced during the past few decades. Innovativeness increases competitiveness, and it has been argued that growth strategy based on
innovation makes it possible to foster employment and welfare on a larger scale. Besides macroeconomic measures aiming to increase demand, actions supporting innovations have therefore been increasingly emphasised. At the
same time, the conception of the nature of innovation activities has changed: the focus of attention is no more on radical inventions only, but innovations are understood to refer to the creative side of economic development as a whole.
Knowledge is seen to be the key resource in modern economy, and even more important is the capability to produce new knowledge, i.e. learning, which is closely linked to innovation. These ideas are crystallised in the concepts of
”knowledge economy” and ”learning economy”. (Boden and Miles 2000, 259; Lundvall 1999a, 19-21 and 30-31; Schienstock 1999, 14 and 17).
Chapter Two
Literature Review
Introduction
The scope and theoretical framework of the study
The study in hand examines the past and future development of knowledge intensive business services (KIBS). The aim is to discover the central characteristics of this development, with particular focus on changes in trendsand on new phenomena. The study analyses both the development of the role and significance of KIBS, the development of the contents of these services and the development of the ways to provide the service. The study is based on three main approaches:
– the analysis of the long-term development of KIBS,
– the utilisation of theories striving for explanations of the earlier development, as well as of theories on the present role of KIBS and on the
factors influencing their future development,
– the examination of the views of experts about the future prospects of KIBS.
The last approach consists of interviews made in the Finnish KIBS sector. The target area of the study is the entire KIBS sector. However, the various subbranches are discussed in the light of examples both in literature analysis and in the analysis of the empirical material. The sub-branches belonging to the KIBS sector will be defined in Chapter 3.
The theoretical basis of the study is the innovation and knowledge economy perspective which was briefly described in the previous chapter and which makes KIBS an interesting and important object of research. This perspective, which will be examined in more detail in Chapters 6 and 7, does not form one coherent theory, but rather a model of thinking that combines many research findings. It provides conceptual tools that help to indicate those novel features of advanced industrial societies that are important from the viewpoint of KIBS’
development (cf. Miles and Boden 2000, 262). The core of these novel features is the essentially accelerated circulation of information and knowledge. This model of thinking does not imply that the importance of information, knowledge, learning and innovation would be a new phenomenon or characteristic of only the present day. All in all, the concept of ”knowledge economy” – and the related concepts of ”learning economy”, ”information economy” etc. – are used in this context more as pragmatic tools of analysis than as labels of a paradigmatic societal change.
Besides being a central motivating factor for the whole study, the arguments that the innovation and knowledge economy perspective comprises also serve as the foundation for some themes and issues in the empirical part of the study.
This part examines – in addition to the main directions of the future development of KIBS – the nature of the service innovations produced by KIBS and the new innovation activities that seem to be developing in the sector. The linkages between innovation activities and learning are also an issue to be studied in the empirical part. It will be mapped out how widespread are innovativeness and the new development features detected in various KIBS sectors, and what kinds of new skills requirements the development imposes on
KIBS. Here, the innovation activities of those KIBS that are not immediately linked with the development of technology are particularly interesting, because of the scarcity of research in this area. The examination of innovation activities in the empirical part of the study is focused on the company level, whereas in the discussion based on literature the level of innovation systems is also included.
The ”type” of foresight applied In foresight studies, a large number of different approaches have been applied and have been categorised in various ways. For this study, the important ones are the divisions into quantitative vs. qualitative and exploratory vs. normative
approaches (Gordon 1992, 27; see also FOREN 2001, 15-16; Hynynen et al. 1979, 12 and Loveridge 2000, 76-82): – Quantitative methods rely on the numerical presentation of future developments; they often include forecasts and use modelling techniques.
Qualitative approaches vary from methods focusing on the encouragement of creative thinking to the use of systematic qualitative techniques.
C mbinations and intermediate forms of quantitative and qualitative approaches are also common.
– Exploratory methods start from the present and examine what kinds of alternative futures development can lead to. These methods often ask questions about the implications of possible developments or events that lie outside the familiar trends (the ”what if” questions). In normative methods a preliminary view of a possible (often desirable) future or set of futures that are of particular interest is first created. After that follows an analysis of how these futures might or might not grow out of the present – how they might be
achieved, or avoided (the ”how” questions).
This study is qualitative when mapping out future prospects; the quantitative approach is only used in the statistical descriptions of the past development of KIBS. In the exploratory – normative dimension the study represents the former approach. Its focus is on the analysis of the important characteristics and processes discernible at present in KIBS and of the ensuing various possible development tracks. However, the starting point in this study is not only the present, but it is considered important to extend the analysis to history as well.
The study follows the footsteps of those futures researchers who emphasise the rich interconnections between the past, present and future (Slaughter 1996, 99-100)3 and the significance of retrospective thought for prospective studies (Godet 1994, 49).
CHAPTER THREE
Introduction
Taxonomies of services and the concepts of producer services and business services. The main purpose of this chapter is to explore the concept of business services as a more general framework for KIBS. However, especially in earlier studies the concept of producer services was used instead of business services; thus, both concepts are included in the analysis. The concepts are studied first on the
basis of the main dimensions used in service taxonomies: demand, supply and function of a service. This is followed by a description of industrial and occupational sub-groups counted among producer and business services in the conceptual sense as well as in practical applications and statistics.
Main dimensions of service taxonomies
The term ”services” has several meanings; it can be used to refer both to the service work and to the results of this work, i.e. to service activities and to the products of these activities. It can also be used to mean service industries on one hand, and service occupations on the other. (cf. Gershuny and Miles 1983, 17 and 20; Illeris 1989a, 8-9) Even though the main share of service occupations is located in service industries, corresponding activities can be found inside manufacturing companies, too. As regards business services, including services of KIBS-type, there are activities in independent service firms and in client (manufacturing) companies that are not only similar, but also highly interactive, as we will see in later chapters.
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