Are KIBS beneficial to international business performance

Abstract

Purpose The purpose of this paper is to test whether knowledge-intensive business services (KIBSs) contribute to international business activity. In line with studies from the servitization, the territorial competitiveness and the global value chain realm, it can be hypothesized that if KIBS consumption has a positive effect on business competitiveness, a correlation is discernible between “intensity of KIBS uptake” and “turnover and export performance at industrial sector level”. Design/methodology/approach To test this hypothesis, the authors make use of input-output tables from the Basque Country for the period 2000-2012 and regional accounts regarding turnover and export per sector and calculate how consumption of a series of KIBS correlates with turnover and export evolution for 14 industrial sectors. Findings The authors find a strong fit between consumption of KIBSs and international competitiveness parameters for the industrial sectors screened. Research limitations/implications The authors postulate that the use of KIBS is beneficial for consuming industries. Accordingly, the authors posit that having a sound KIBS basis in a territory contributes to (international) business competitiveness, and that industrial policies should foster the rapprochement of manufacturing sectors to KIBS. At the same time, the authors assume that reverse causalities may be at play (international competitiveness of manufacturing sectors boosts KIBS consumption through backward linkage effects). Practical implications The paper posits that having a sound KIBS basis in a territory contributes to international business competitiveness, and that industrial policies should foster a rapprochement of manufacturing sectors to KIBS. A further implication would be to look after a minimum critical mass and or to engage in KIBS capacity building in a territory. Absence of competitiveness-enhancing KIBS in a region may hamper business performance and staying power of user industries. The paper’s findings also imply that the posture of manufacturing firms towards uptake of knowledge-intensive services matters, and that fostering their proactiveness to interact with KIBS is indicated. Similarly, they form an argument in favour of considering KIBS as active subject matters for industrial policy design. Originality/value Amidst the several perspectives adopted upon KIBS’ role to foster business and territorial competitiveness, what is largely absent is the examination of how uptake of KIBS by respective sectors relates to the turnover or export evolutions that the sectors in question reveal. Consequently, the present paper sets out to examine this research question.

Service implementation in manufacturing: An organisational transformation perspective

“…Lafuente et al analyse the renaissance of local manufacturing sectors by studying role of local KIBs in increasing competitiveness and employment at a territorial level, subsequently producing a virtuous circle defined as "territorial servitization". These results are in line with Kamp and Ruiz de Apodaca (2017), who show how the interaction between manufacturing firms and KIBS increases total exports and turnover on a regional level. This line of research on the effect of territorial servitization is important, as it ultimately provides policy tools to regional and national governments to stimulate service innovation in the region.…”

Product-service innovation and performance: unveiling the complexities

“…This research line opens an interesting approach to contextualize PSI within the International Business field, where Vendrell-Herrero et al (2018b) demonstrated how cross-border strategic alliances increase the positive PSI-performance relationship. Also, Kamp and Ruiz de Apodaca (2017) found evidence that KIBS are beneficial to international business performance. Finally, the role of KIBS in understating the complexities behind PSI-performance relationship is a topic of increased interest that has inspired recent work Gomes et al, 2018;Lafuente et al, 2017).…”

Regional benefits of servitization processes: evidence from the wind-to-energy industry

“…Identifying these benefits extends previous contributions to territorial servitization which focused on employment, resilience, or start-up rates as territorial benefits (e.g. Lafuente et al, 2017;Kamp & Ruiz de Apodaca, 2017;Vendrell-Herrero & Wilson, 2017). In our work, the argument that servitization strengthens employment has been specified for each phase in the industry life cycle.…”

“…Servitization also leads to knowledge-intensive services being provided by the manufacturing industry itself. Accordingly, the extension of services in manufacturing companies and industries leads to service competencies, which strengthen production and employment in the specific geographical region (Kamp & Ruiz de Apodaca, 2017).…”

“…The KIBS concept suggests that service activities lead to competencies, which enhance the resilience of the local manufacturing industry (Kamp & Ruiz de Apodaca, 2017;Lafuente et al, 2017;Menzel & Fornahl, 2009) and strengthen competitiveness, economic growth, and employment (Muller & Zenker, 2001). Accordingly, servitization leads to service competencies.…”