Regional Concentration of Knowledge-Intensive Business Services in Europe

Abstract

This paper analyses the location patterns o f knowledge-intensive business services (KIBS) in Europe in line with the most recent literature. Our main contribution is to provide new evidence about the location patterns o f KIBS considering the European continent, asopposed to individual countries, as the unit o f analysis. We first present the concentration and specialisation patterns o f KIBS activities in Europe, including the variations that have occurred during the last few years. Second, we try to provide an explanation o f KIBS regional specialisation patterns on the basis of the factors identified by the literature. The results suggest that KIBS activities are highly geographically concentrated in Europe. In this respect, capital cities, which have increasingly emerged as strongly specialised locations in services, play a central role in geography o f KIBS. At the same time, there is also evidence o f a tendency o f sparse dispersal o f KIBS throughout European regions.Overall, our results reinforce the importance o f agglomeration externalities, market size, regional accessibility, regional knowledge base, and the institutional nature o f the regional capital city. Finally, regarding changes in KIBS regional specialisation, we find that these are largely associated to changes in regional GDP.A long-standing debate exists around the location patterns o f production activities and, in particular, about the location o f new and em erging production activities. The m ajority o f studies on these aspects have m ainly concentrated on m anufacturing rather than on service activities; how ever, for obvious reasons, the interest in the latter has increased over time. W ith this w ork, w e aim to investigate the location patterns o f know ledge-intensive business services (KIBS). These activities are o f critical im portance w ith respect to the recent dynam ics o f the production system , as m uch for its increasing volum e o f value added and em ploym ent as w ell as for its key function in the creation and diffusion o f know ledge and innovation to other activities. K IB S appears to be im portant not only for the industrial sector but also for the services or tertiary sector. Similarly, KIBS are relevant to both private and public com panies. Furtherm ore, specialised services provide a flow o f know ledge to their clients, and their functions allow the reduction o f risks and opportunity costs in the processes o f innovation, proportioning know ledge on different subjects such as governm ental regulation, standards, m arketing, engineering, and financing.The existing literature show s that KIBS are highly concentrated in m etropolitan areas and, particularly, in capital cities. In E urope this is show n by num erous studies (C avola and M artinelli

Geographically uneven structural change in EU15 regions from 1980 to 2017: a cluster analysis

“…This sector, while varied in composition, contains knowledge-intensive business services (KIBS) as an important subset, which have over recent decades been seen as increasingly important for regional growth (Martin et al 2021). The separation of a group of regions with a longer-term specialisation in financial and business services and containing well-known service centres such as the City of London, Edinburgh, Dublin, and Frankfurt (cluster 5), from a larger group of regions without such historical specialisation but with substantial growth in financial and business services (cluster 6) is consistent with evidence of strong and continued specialisations in business services in capital and other higher-tier cities alongside an increasing dispersal of KIBS throughout European regions over time (Deza & López, 2014;Merino & Rubalcaba, 2013;Rosés & Wolf, 2019). There is some evidence that this dispersal has reverted the concentration of KIBS in the top of the urban hierarchy to a certain extent (Gallego & Maroto, 2015), which fits with the fact that cluster 6 includes not just a number of large metropolitan areas such as Marseille, Lisbon, Rome, Naples, Amsterdam, and Glasgow, but also many regions centred on medium-sized and smaller cities.…”

“…There is some evidence that this dispersal has reverted the concentration of KIBS in the top of the urban hierarchy to a certain extent (Gallego & Maroto, 2015), which fits with the fact that cluster 6 includes not just a number of large metropolitan areas such as Marseille, Lisbon, Rome, Naples, Amsterdam, and Glasgow, but also many regions centred on medium-sized and smaller cities. It is possible, however, that these smaller cities are predominantly home to lower-order financial and business services, as research has shown that more knowledge-intensive and higher-order services remain concentrated in the largest urban centres (Deza & López, 2014;Rosés & Wolf, 2019).…”

Comprehensiveness and Locality: Website Marketing of World City Governments in the Era of Globalisation

“…In sum, the Construction and Environment theme advertises a comfortable natural environment and various outdoor activities to attract investors, elites, and tourists. Seven Alpha cities-Hong Kong, Tokyo, Dubai, Moscow, Johannesburg, Seoul, and Riyadh-adopt this marketing content theme, and most of these cities are defined as speculative urbanism cities where government plays a dominant role in the amelioration of built environment and natural ecology (Hill and Kim, 2000;Goldman, 2011;Haines, 2011;Argenbright, 2013;Chubarov and Brooker, 2013;Deza and López, 2014;Wu, 2016).…”

Regional differentiation of the service sector development in selected European countries

“…Numerous empirical studies carried out on materials from various countries (e.g. Beyers, 2005;Bryson, Rusten, 2005;Deza, López, 2014;Genaro, Melchor, 2010;Jennequin, 2008;Moyart, 2003;Skórska, 2016) underline the widespread nature of this phenomenon and its resonant influence on the development of the studied countries, as well as the special role of services for entrepreneurs in this process, referred to as producer, business, professional, advanced, knowledge-intensive etc. They are considered as a kind of driving force of national and regional production systems due to the high potential of implementing modern forms of management and organization of work, transfer of new technologies or adaptation of local enterprises to the changing conditions of production and trading (Moyart, 2003).…”

“…A natural element of the development of the services sector is its regional differentiation resulting from various kinds of geographical-historical and socio-demographic factors, the specificity of the institutional environment and external relations, dominant social beliefs and political and legal norms etc. At the same time, it should be taken into account that the very dynamic development of producer and business services observed in recent years may contribute to the increase of regional inequalities due to the specific predispositions of this type of services to focus on urban areas, especially in large cities and agglomerations (Deza, López, 2014).…”