The knowledge intensity and the economic performance in Taiwan’s knowledge intensity business services

Abstract

The service sector plays a key role to employment growth and increased public well-being in OECD countries. The service industries contributed more than 63% of GDP in 2016 and have become the core of economy in Taiwan. Within the service sectors, knowledge-intensive business services (KIBS) particularly illustrate higher levels of productivity and profitability. Moreover, due to lack of the clear measurements of the knowledge intensity with prior investigations in KIBS, the aim of this article is to explore the knowledge intensity of Taiwan's KIBS. This study then further probes into the relationship between knowledge intensity and economic performance. Panel data from 13 service sectors in Taiwan during the period 2007-2015 is analysed with a fixed effect model. This empirical research shows four findings: first, 13 industries are classified into three groups as high, low, and no level of knowledge intensity; second, most of the level of knowledge intensity has been increased from stage one to stage two; third, education level and vocational training rate positively influence productivity; and, finally, the percentage of knowledge workers and vocational training rate have a positive effect on the margin rate.

Vocational training costs and economic benefits: exploring the interactions

“…Therefore, attention to studies of the effect of vocational training costs (VTC) remains high. Its impact is studied in various manifestations: methodologically, taking into account changes in the labour market under the influence of innovation, including the fourth industrial revolution (Avis, 2018); based on the analysis of statistics on the coverage of education and its economic consequences for the economy of countries (Bhorat et al, 2016;Chung & Tseng, 2019); and assessments of the links between learning and its outcomes found in specially conducted studies (Choi et al, 2019;Martins, 2020;Mason, 2020;Shah, 2017).…”

The outsourcing practice among small knowledge-intensive service firms

“…In the present paper, the definition of KIFs by Chunga and Tseng (2019) has been used as a point of reference, and the number of university educated personnel in each firm has served as an indication of knowledge intensity. The lowest number of university educated staff was in transport and communication and the highest in hi-tech- and knowledge-intensive firms.…”

“…In the analysis of KIBS, research by Chunga and Tseng (2019) is used as a point of reference. In their analysis of Taiwanese KIBS, they examine knowledge intensity, by measuring education level, the percentage of knowledge workers, the percentage of R&D expenditure, vocational training rate and e-learning rate.…”

“…Knowledge workers with a more professional ability and higher education level would have great knowledge of power and judgement, which is necessary for providing high-quality knowledge outputs. KIBS has a very strong orientation towards higher education levels, much more than most other industries (Chunga and Tseng, 2019, p. 800).…”

“…Common to most of these definitions is the firms’ capability to solve complex problems through creative solutions by using highly qualified staff, either as a result of intensive training or university education. In this paper, we follow the definition of Chunga and Tseng (2019, p. 799), who define:…”