Does distance really matters? Assessing the role of KIBS proximity in firm´'s servitization capacity: evidence from the Basque Country

Abstract

Servitization strategy is increasingly recognized as a key source of value with important competitive and economic potential across the globe. Over the years, it has been proven to contribute to territorial performance through the provision of services to manufacturing businesses. Such contribution, however, has been to a large extent consequential to the configuration of local industrial structures, and most importantly, by interconnectedness between manufacturing firms and knowledge intensive business services (KIBS) firms. Hence, the process of territorial servitization is highly conditioned to the association between manufacturing businesses and KIBS firms. To date, territorial servitization literature mostly describes the implications of KIBS firms for service deployment and service innovation in manufacturing, considering knowledge and technological capabilities as main variables for its success. Nevertheless, the literature is silent on how geographical distance between KIBS firms and manufacturing companies may affect servitization capacity. Therefore, this research attempts to disclose the importance of geographical distance of KIBS firms in manufacturers´ servitization capacity. In doing so, we analyze two manufacturing companies; Alpha and Beta, both located in the Basque country but collaborating with KIBS firms in different geographical areas, “inside” and “outside” the Basque region. Through a qualitative study based on (1) measuring firm’s capacity for servitization, and (2) in-depth interviews, results suggest that geographical distance in terms of proximity plays a key role on the KIBS-Manufacturer relationship for servitization capacity, and require to be considered as an important aspect for successful territorial servitization.

Editorial: Product-service innovation Systems—Opening-up servitization-based innovation to manufacturing industry

“…Finally, what is the role of geographic proximity in the development of regional PSI systems? Recent work challenges the role of geographic proximity in knowledge-based economies for territorial servitization processes (Opazo-Basáez et al, 2020). Thus, can regions with an underdeveloped manufacturing base take advantage of digital infrastructures and digitalization processes for promoting the development of their local hybrid value chain?…”

Should Manufacturers Support the Entire Product Lifecycle with Services?

“…This research focuses on the manufacturing industry in the Basque Country, a region located in northern Spain that borders both France and the Cantabric Sea. The Basque Country leads the Spanish innovation manufacturing ecosystem [56] and is currently in the process of a digital transformation that includes a wide range of service offerings [53,57,58]. We focus specifically on the machine manufacturing industry, one of the leading Basque industries, with extensive roots in the regional economic ecosystem [21,59].…”