Knowledge intensive business services
Encyclopedia
Knowledge Intensive Business Services (commonly known as KIBS) are services and business operations heavily reliant on professional
knowledge. They are mainly concerned with providing knowledge-intensive support for the business processes of other organizations. As a result, their employment structures are heavily weighted towards scientist
s, engineer
s, and other experts. It is common to distinguish between T-KIBS, (those with high use of scientific and technological knowledge - R&D services, engineering services, computer services, etc.), and P-KIBS, who are more traditional professional services - legal, accountancy, and many management consultancy and marketing services. These services either supply products which are themselves primary sources of information and knowledge, or use their specialist knowledge to produce services which facilitate their clients own activities. Consequently, KIBS usually have other businesses as their main clients, though the public sector and sometimes voluntary organisations can be important customers, and to some extent households will feature as consumers of, for instance, legal and accountancy services.
The first discussion of KIBS to use the term seems to have been in a 1995 report to the European Commission
"Knowledge-Intensive Business Services: Users, Carriers and Sources of Innovation"
In the decade since this appeared these sectors of the economy have continued to outperform most other sectors, and have accordingly attracted a good deal of research and policy attention. They are particularly of interest in European countries such as Finland. Care should be taken in reading literature on the topic, since a number of related terms are in wide use. The European Union has recently been referring to a much broader concept of "knowledge-intensive services" recently (extending well beyond the business services) and to "business-related services" (including many services which have large markets among final consumers).
A extract from a description found in Harvard Business Online tells us: "A common characteristic of knowledge-intensive business service (KIBS) firms is that clients routinely play a critical role in co-producing the service solution along with the service provider. This can have a profound effect on both the quality of the service delivered as well as the client's ultimate satisfaction with the knowledge-based service solution. By strategically managing client co-production, service providers can improve operational efficiency, develop , and generate a sustainable competitive advantage."
The European Monitoring Centre on Change
(EMCC) has published online a number of reports and studies of KIBS. In the first of these, "Sector Futures: the knowledge-intensive business services sector"
the KIBS sectors are defined in terms of the standard industrial classification. To summarise, the main KIBS sectors are:
From NACE Division 72: Computer and related activities
72.1: Hardware consultancy
72.2: Software consultancy and supply
72.3: Data processing
72.4: Database activities
72.5: Maintenance and repair of office, accounting and computing machinery
72.6: Other computer related activities
From NACE Division 73: Research and experimental development
73.1: Research and experimental development on natural sciences and engineering
73.2: Research and experimental development on social sciences and humanities
From NACE Division 74: Other business activities
74.11: Legal activities
74.12: Accounting, book-keeping and auditing activities; tax consultancy
74.13: Market research and public opinion polling
74.14: Business and management consultancy activities
74.15: Management activities of holding companies
74.20: Architectural and engineering activities and related technical consultancy
74.3: Technical testing and analysis
74.4: Advertising
74.5: Labour recruitment and provision of personnel
74.8: Miscellaneous business activities n.e.c.
74.81: Photographic activities
74.84: Other business activities n.e.c.
However, other sectors may supply business services together with their main products; and such services are of course routinely produced by firms for their own use - almost all firms will have some internal office, computer, marketing activities, for instance. KIBS firms are simply specialists in these service activities, and these are their main products.
Some sectors that are NOT, in general, KIBS—though there are likely to be some KIBS firms lurking in many of these—are either knowledge-intensive (health, education) or business-related (office cleaning...) Some major examples are: Health/medical services, Postal services and Transport and Distribution (some specialised logistics services may be seen as KIBS), Consumer Financial and Real Estate services, Education services (other than specialised training for industry), Broadcast and other mass media (again with possible exceptions, such as when these media are also used for specialised delivery of business services as in data broadcast or encoded business video transmissions), public administration (again with some possible exceptions in industry support schemes), Repair/maintenance (with the exception of IT-related activities), retail and wholesale, Social welfare services, Hospitality, Catering, Leisure/tourism, Personal consumer services, Entertainment. Some telecommunications and specialised financial services are borderline cases.
KIBS have attracted a good deal of attention from innovation researchers. They are both highly innovative - among the most innovative service sectors if we can go on the results of Community Innovation Surveys (CISs - these surveys are well-documented, for instance on CORDIS ) (see also the work of Howells and Tether) - and many of them play important roles in diffusing innovations and helping their clients innovate more generally.
Professional
A professional is a person who is paid to undertake a specialised set of tasks and to complete them for a fee. The traditional professions were doctors, lawyers, clergymen, and commissioned military officers. Today, the term is applied to estate agents, surveyors , environmental scientists,...
knowledge. They are mainly concerned with providing knowledge-intensive support for the business processes of other organizations. As a result, their employment structures are heavily weighted towards scientist
Scientist
A scientist in a broad sense is one engaging in a systematic activity to acquire knowledge. In a more restricted sense, a scientist is an individual who uses the scientific method. The person may be an expert in one or more areas of science. This article focuses on the more restricted use of the word...
s, engineer
Engineer
An engineer is a professional practitioner of engineering, concerned with applying scientific knowledge, mathematics and ingenuity to develop solutions for technical problems. Engineers design materials, structures, machines and systems while considering the limitations imposed by practicality,...
s, and other experts. It is common to distinguish between T-KIBS, (those with high use of scientific and technological knowledge - R&D services, engineering services, computer services, etc.), and P-KIBS, who are more traditional professional services - legal, accountancy, and many management consultancy and marketing services. These services either supply products which are themselves primary sources of information and knowledge, or use their specialist knowledge to produce services which facilitate their clients own activities. Consequently, KIBS usually have other businesses as their main clients, though the public sector and sometimes voluntary organisations can be important customers, and to some extent households will feature as consumers of, for instance, legal and accountancy services.
The first discussion of KIBS to use the term seems to have been in a 1995 report to the European Commission
European Commission
The European Commission is the executive body of the European Union. The body is responsible for proposing legislation, implementing decisions, upholding the Union's treaties and the general day-to-day running of the Union....
"Knowledge-Intensive Business Services: Users, Carriers and Sources of Innovation"
In the decade since this appeared these sectors of the economy have continued to outperform most other sectors, and have accordingly attracted a good deal of research and policy attention. They are particularly of interest in European countries such as Finland. Care should be taken in reading literature on the topic, since a number of related terms are in wide use. The European Union has recently been referring to a much broader concept of "knowledge-intensive services" recently (extending well beyond the business services) and to "business-related services" (including many services which have large markets among final consumers).
A extract from a description found in Harvard Business Online tells us: "A common characteristic of knowledge-intensive business service (KIBS) firms is that clients routinely play a critical role in co-producing the service solution along with the service provider. This can have a profound effect on both the quality of the service delivered as well as the client's ultimate satisfaction with the knowledge-based service solution. By strategically managing client co-production, service providers can improve operational efficiency, develop , and generate a sustainable competitive advantage."
The European Monitoring Centre on Change
European Monitoring Centre on Change
The European Monitoring Centre on Change is "a place for exchanging practice, information and ideas on the management and anticipation of change," consisting primarily of an informational website. It was founded at a on "What drives change?", which was organized by the European Foundation for...
(EMCC) has published online a number of reports and studies of KIBS. In the first of these, "Sector Futures: the knowledge-intensive business services sector"
the KIBS sectors are defined in terms of the standard industrial classification. To summarise, the main KIBS sectors are:
From NACE Division 72: Computer and related activities
72.1: Hardware consultancy
72.2: Software consultancy and supply
72.3: Data processing
72.4: Database activities
72.5: Maintenance and repair of office, accounting and computing machinery
72.6: Other computer related activities
From NACE Division 73: Research and experimental development
73.1: Research and experimental development on natural sciences and engineering
73.2: Research and experimental development on social sciences and humanities
From NACE Division 74: Other business activities
74.11: Legal activities
74.12: Accounting, book-keeping and auditing activities; tax consultancy
74.13: Market research and public opinion polling
74.14: Business and management consultancy activities
74.15: Management activities of holding companies
74.20: Architectural and engineering activities and related technical consultancy
74.3: Technical testing and analysis
74.4: Advertising
74.5: Labour recruitment and provision of personnel
74.8: Miscellaneous business activities n.e.c.
74.81: Photographic activities
74.84: Other business activities n.e.c.
However, other sectors may supply business services together with their main products; and such services are of course routinely produced by firms for their own use - almost all firms will have some internal office, computer, marketing activities, for instance. KIBS firms are simply specialists in these service activities, and these are their main products.
Some sectors that are NOT, in general, KIBS—though there are likely to be some KIBS firms lurking in many of these—are either knowledge-intensive (health, education) or business-related (office cleaning...) Some major examples are: Health/medical services, Postal services and Transport and Distribution (some specialised logistics services may be seen as KIBS), Consumer Financial and Real Estate services, Education services (other than specialised training for industry), Broadcast and other mass media (again with possible exceptions, such as when these media are also used for specialised delivery of business services as in data broadcast or encoded business video transmissions), public administration (again with some possible exceptions in industry support schemes), Repair/maintenance (with the exception of IT-related activities), retail and wholesale, Social welfare services, Hospitality, Catering, Leisure/tourism, Personal consumer services, Entertainment. Some telecommunications and specialised financial services are borderline cases.
KIBS have attracted a good deal of attention from innovation researchers. They are both highly innovative - among the most innovative service sectors if we can go on the results of Community Innovation Surveys (CISs - these surveys are well-documented, for instance on CORDIS ) (see also the work of Howells and Tether) - and many of them play important roles in diffusing innovations and helping their clients innovate more generally.