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Knowledge-based Services, Internationalisation and Regional Development

James W. Harrington and Peter W. Daniels (Editors)

Ashgate, Aldershot (2006),309 pages, ISBN: 0-7546-4897-4, Price: £60.

Reviewed by Paweł Capik, University of the West of Scotland.

Over the past few decades the role of services in the development of the advanced economies has become increasingly evident. More recently the growth trajectories of transitional and developing countries are also gradually more relying upon the tertiary sector. Indeed the servicisation of the global economy is more explicit than ever before (Dicken 2007). Services have strengthened their position in various dimensions of life and play crucial role in operations (and in some cases the very existence) of the three main economic units: households use progressively more services, companies and the public sector spend bigger and bigger budgets on services such as consulting, marketing and distribution. The latter two simultaneously being the provider of many such, and a variety of other services. But it is not only the service industries that keep extending at rates often exceeding those of other economic sectors, but there also is a distinct tendency for services to constitute a major part of value added in manufacturing industries. The result is the situation where it is increasingly difficult to identify where the product ends and the service begins.

This proliferation of services is often attributed to the development of the knowledge-based economy, where knowledge is seen as the key asset in competition. The type and the amount of knowledge required by the companies has motivated internal restructuring and lead to unprecedented growth of various forms of outsourcing services and reshaping the global map of commodity and value chains. These observations constitute a point of departure for the edited volume by James Harrington and Peter Daniels entitled Knowledge-based Services, Internationalisation and Regional Development. Published within Ashgate’s ‘Dynamics of Economic Space’ series, the book provides a comprehensive overview of the problematic within the service economy and the geography of services. It needs to be praised as an original collection, and a unique one, amongst those currently available in the subject area, but at the same time, it does not manage to avoid all of the risks associated with such a position.

The volume engages with the studies of organisation, international relationships and impacts on the regional economies of a broad set of service providing activities. These naturally include knowledge-intensive business services (KIBS), but also distinct processes of knowledge creation and dissemination in and outwith the higher education sector, and knowledge about markets and value chains underlying the speedy growth of mail-order and e-tourism sectors. While the research presented stems from seemingly various theoretical perspectives (including industrial organisation, spatial interaction, transactions costs, regional economics and structural change) the contributions to the book originate from three main assertions: 1) acquisition and organisation of knowledge are key to many areas in service provision; 2) they condition the organisations’ structure, relationship to other organisations, entry into new markets and the location of activities; 3) because knowledge requirements are sector- and organisation-specific, and relationships are bound by the local contexts, to explore the nature of these conditional relationships sector- and location-specific studies are required. It is those issues that constitute the backbone for the themes elaborated in the three parts comprising the book: namely “Conceptualizing Knowledge-Based services”, “Internationalisation of Service Firms” and “Knowledge-Based Services and Regional Development”.

The first part commences with an early categorisation of service industries in the context of the manufacturing process. Park identifies key determinants of spatial interaction between knowledge-based activities and point to major influences on the dynamics of economic spaces in the service worlds. These are then confirmed by the case studies of Samsung Electronics and Korean Sunchang region. In the subsequent chapter, Camacho and Rodríguez further develop the blurring of boundaries between services and manufacturing. The authors offer a long awaited definition of knowledge intensive services, and explore their characteristics and role of innovation diffusers in the context of R&D activities. The following chapter, by Longhi, argues for determinative role of internet in the recent developments within the tourism industries. The presented discussion however relies on some significant generalisations which prevents it from being completely convincing.

The second part of the volume focuses on the international dimensions of knowledge flows and cross-border transfers within the service companies. It opens with a fascinating account of transnationality of the aerospace and management consultancy services. Unorthodoxically Bryson and Rusten explore those seemingly avant-garde sectors in the context of the classical Christaller’s theory and other milestone writings by Adam Smith and Emile Durkheim. In the succeeding part Roberts proposes a conceptual framework for the analysis of cross-border knowledge transfers in the process of management consultancies’ internationalisation. Next in a well researched and usefully illustrated, but somewhat miss-fitting chapter, Beaverstock, Hall and Faulconbridge explore the interplay between the regionalisation and internationalisation of the European headhunting industry. In the subsequent section Ström using the OLI paradigm provides insights into organisation and difficulties faced by the Japanese business services companies operating in Singapore.

The final part of the volume, ‘Knowledge-Based Services and Regional Development’, explores widely defined regional structural changes and in addition to what the title would suggest, also scrutinises the knowledge factors in some industrial sectors. While not always there is an explicit relationship between the consecutive chapters, majority of them constitute a solid peace of academic writing which convincingly could stand on its own. The section opens with Giaccaria and Demetrio’s questioning the proclaimed overwhelming tertiarization of the economy. Using Turin metropolitan region as a case study, the authors review the dynamics of economic structures in the context of various typologies of post-industrial development. Next Kim and Harrington examine the often underestimated role of the American post-secondary education institutions in the regional development, particularly its contribution to the growth of IT-related services.  In the following section Park offers an inclusive appraisal of the Danish regional growth strategies for the marginal areas based on the development of the niche technologies in various sectors ranging from food and construction to communication and health services. The subsequent richly illustrated chapter, authored by Wood, based on the example of English core cities emphasises the localisation and selective development of the knowledge-based economy. Using relevant quantitative data the author identifies a number of unconditional components contributing to the successful creation of urban knowledge-based economy. In the next chapter the new media and software industries provide the platform for examination of spatial dimensions of the innovation activities. Kolehmainen interrogates personal contacts and networks, institutional and structural arrangements to consequently identify the concept of innovation environment. The concluding chapter of the volume (by Shulz, Dörrenbächer and Liefooghe) adopts the approach of evolutionary economics to conceptualise the rise and dynamic of yet another interesting sector, namely the mail order industry in Lille Metropolitan Area.

As far as the stated aims of the book are concerned this is, for the most part, a comprehensive account of the service world, its internal networks, characteristics, trends and interrelations with regional economies. The reader is provided with often unique insights into some remarkable sectors whose value chains are carefully dissected into complex sets of actions. Paradoxically the volume’s main advantage simultaneously comprises its main limitation. The book is an ambitious attempt to go beyond the study of, as it claims, well-researched knowledge intensive business services, to include broader set of service activities and organisations whose operations are underpinned by ‘knowledge’. This however constitutes a problem, which the volume addresses in a rather inconsistent manner, namely one of the meanings of knowledge in the context of markets, services and economy. Consequently the various chapters dealing with marketing or R&D activities cannot be treated as equal in providing generalisations regarding the internally diversified set of knowledge-based service activities. However, such a problem is not particular solely to this otherwise engaging collection, but is more reflective of the wider literature, which for the lack of better sources often has to rely on secondary macro data sets provided by institutions which classify the same activities in a divergent manner.

Another drawback, albeit much less important, is concerned with the volume’s deficiencies in the editorial layout. Although the abundant illustrations (63 tables, 23 graphs) certainly enhance the comprehensibility and contribute to the clarity of the proposed arguments, on some occasions the multitude of these actually does the opposite. Readers’ reception is further impeded by a number of typographical errors, particular to some chapters. Consequently another deficiency needs to be mentioned (often characteristic of edited volumes), namely the lack of consistency and coherence evident particularly between the three different parts. While all essays are valuable contributions in their own right, more explicit cross-referencing could have strengthened the volume’s holistic message. 

From a geographical perspective the book undoubtedly benefits from the wide spatial coverage of themes and phenomena both in terms of scale and location. Various parts of the works explore the interactions, knowledge flows, markets and networks on a range of scales including national, regional and urban/metropolitan ones. Tran-scalar studies could be just a natural complement to those. Comparably extensive is the geographical coverage of case studies which range from Korea and Finland, to Singapore and America to name but a few. Yet, while the scope of the studied service activities is interesting and comprehensive, considering the growing pace and scope of restructuring within multinational enterprises the book would benefit from more explicit inclusion of KIBS and analysis of the recent spatial trends in outsourcing and offshoring activities impacting the volumes and directions of knowledge streams flows.

Another important attribute of the volume lies with its robust methodological approach. Indeed it is a collection of wide-ranging qualitative and quantitative research methodologies utilising a range of data gathering and analysis techniques.

Despite some criticisms, which usually is easy to wage in case of edited works, by emphasising the role of knowledge creation and dissemination the book remains a valuable contribution to the ongoing debate within the geography of services. Thanks to the different theoretical and methodological approaches it adopts it should be of particular interest to honours-level students and academics within a range of subjects particularly economic geography but also cognate disciplines including regional science, economics, international business and logistics, not only for research but also teaching and learning purposes.


Dicken, P., 2007, Global Shift: Mapping the changing contours of the world economy, SAGE, London.

(Added 25 March 2008)