2006/08/28 13:45 KIBS Track Session, SEM 2006, HUT

Services Engineering and Management Summer School, Helsinki University of Technology, August 28-September 2

This digest was created in real-time during the meeting, based on the speaker's presentation(s) and comments from the audience. The content should not be viewed as an official transcript of the meeting, but only as an interpretation by a single individual. Lapses, grammatical errors, and typing mistakes may not have been corrected. Questions about content should be directed to the originator. The digest has been made available for purposes of scholarship, posted on the Coevolving Innovations web site by David Ing.

Led by Marja Toivonen

Each day, one presentation by the coach, and then one presentation by a participant

Marja Toivonen, "From Professional Services to KIBS"

First will talk about KIBS more generally today

  • Then tomorrow will speak about natural KIBS and services
  • Innovation in services
  • Thursday, processes


  • KIBS concept
  • KIBS history
  • Two schools of thinking: general business services studies; and studies into professional services students
  • Current view of KIBS
  • KIBS are part of the knowledge economy
  • Some preliminary discussion on KIBS and innovation

KIBS are expert firms that provide services to other companies and organizations

  • Business services, not consumer services
  • In addition to being business services, they are knowledge-intensive
    • Some define knowledge both as input and output
    • Some say specialize in problem solving
    • Here, say that KIBS always creates new knowledge, it's a learning process between KIBS and clients, which links to innovation
  • Main KIBS industries are IT services, R&D servies, architectural engineering and industry design, legal services, financial consultancy, management consultancy, and communications services
    • Many firms now combine these in KIBS, may be different industries
  • In Finland, where compared to other European countries, found KIBS sector is smaller
  • This is a reason that Tekes is putting more resources behind KIBS
  • If you think of KIBS only as firms and not an industry, can't do statistics

Clarification of basic concepts: (4 here, but there are others)

  • KIBS are private firms, that provide expert firms.
    • There are other firms that provide similar services
    • e.g. VTT is public, call it RTO, Research and Technology Organizations: similar work, different funding
    • Important to recognize private firms
  • KIBS-ification:  firms not normally in KIBS, but provide some services
    • e.g. Metso, in the Finnish metal industry, provides some services
    • KIBS clients produce these same services
  • KISA, Knowledge Intensive Business Service Activities are more focused on actors
    • e.g. OECD has published on KISA
  • There are also Knowledge-Intensive Consumer Services, studies much less, e.g. medical healthcare
    • Talking about KICA and KIBS, use the term KIS
  • KIBS services are not synonymous with information services
    • Organize store and transfer information
    • Not create and trasnfer knowledge

History of KIBS

  • Professions (engineers, lawyers) have existed for thousands of years
  • They emerged as firms relatively recently, e.g. linked with industrial revolution
  • First KIBS were advertising agencies in the 1820, with mass consumption goods, development of brand names, establishement of popular newspapers
  • Then, growth in R&D, book-keeping and management consultancy.
  • Engineering offices came about in 1920s

Early KIBS studies:

  • KIBS was small until 1950s, then rapidly developed
  • In the 1960s, already several studies, statistical
  • In the 1950s, KIBS grew faster than the economy
  • In the 1970s, KIBS was the highest growth sector
  • Rapid growth
  • In 1960s, research into business services, on productivity and competitiveness
  • Greenfield 1966, discussion is very modern, readable today

Then two lines of Research:

  • General research into business services
  • Have to use this data before 1995, when didn't have other data
  • PSF == Professional Services Firms, which is what U.S. and Canadians use
  • PSFs are usually business, rather than KIS

General business studies:

  • Also include some routine services
  • Some other producer servides, including transportation, trade and storage
  • To end of 1980s, research weas in explaining growth
  • Attacked as not real, transferring services from one place to antoher

Since the early 1990s, outsourcing explanaiton is too simple

  • Services change at outsourcing, often upgrade at initiation

Main reason for growth for KIBS is increasing needs for expertise

Earlier studies focused on demand, now also focused on supply side

  • W'hat sort of firms
  • How long (life cycle)?

Professional service studies

  • Focused on occupations (c.f. KIBS forcused on firms)
  • Idea: beneifts depende on background
  • Studies originally focused on single firms: .lawyers, engineers
  • Firms don't have much power on employees, they get advice from outisde professional societies
  • Social control (e.g. who had rights to work) were passed by professional associations
  • Partnership principle, seniority imporant
  • Leadership weak, partner oriented

Views of PSFs are now becoming more questionable

  • Traditional studies were more stable
  • Occupatations of blurring
  • PSFs are becoming more local

Idea of KIBS combines the two lines of research

  • Professional, and business-oriented
  • Client is the starting point
  • Many now understand the client's industry, value chain
  • Modularizing KIBS are at the very beginning

Can't be above the client, have to be there

  • Leads to management consultants

KIBS works for large firms, while small firms joint chains

Most KIBS are close to urban:  70% in Finland

KIBS as part of the knowledge economy

  • Globalization, networking and ICT contribues to KIGS
  • Network ways are more natural in external services


  • Innovation changed in the late 1980

Innovative Work Community: Tea Lempiala



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2006/08/28 13:45 Marja Toivonen, "From Professional Services to KIBS"