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Tender Proposal

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Tender Proposal

    Annexe A: Defining KIBS

    Statistical classification of Knowledge-Intensive Business Services has been the subject of much discussion, and a fair level of agreement has been reached.

    KIBS that are liable to be mainly related to new technologies include: ; Computer networks/telematics services (e.g. Internet Service Providers, VANs,

    on-line databases);

    ; some Telecommunications (especially new business services);

    ; Software;

    ; Other Computer-related services - e.g. Facilities Management, Web support

    services, disaster recovery and business continuity services;

    ; Training in new technologies;

    ; Design involving new technologies;

    ; Office services involving new office equipment);

    ; those Building services that involving new IT equipment such a Building Energy

    Management Systems;

    ; Management Consultancy involving new technology;

    ; Technical engineering;

    ; Environmental services involving new technology; e.g. remediation; monitoring; ; Scientific/laboratory testing services; R&D Consultancy.

    Some KIBS are hard to locate as being either technology-based or more traditional professional services: Architecture combines elements of both, as do some design

    services. Table A.1 presents a listing of technology-related KIBS with tentative statistical classifications in the NACE schema, as prepared by Bilderbeek et al (1998).

    A list of professional KIBS which are not predominantly technology-based would include:

    ; Marketing, market research, and advertising;

    ; Training (other than in new technologies);

    ; Specialised Personnel Recruitment and headhunting;

    ; Design (other than that involving new technologies);

    ; some Financial services (e.g. securities and stock-market-related activities); ; Office services (other than those involving new office equipment, and excluding

    “physical” services like cleaning);

    ; Building services (e.g. architecture; surveying; construction engineering, but

    excluding services involving new IT equipment such as Building Energy

    Management Systems));

    ; Management Consultancy (other than that involving new technology);

    ; Accounting and bookkeeping;

    ; Legal services;

    ; and Environmental services (not involving new technology, e.g. environmental

    law; and not based on old technology e.g. elementary waste disposal services).

    The approach outlined above has been widely used in discussions of KIBS, but there are related concepts that have led to slightly different classifications. For example, Murphy and Vickery (1999) talk of (and provide useful comparative statistics on) “strategic business services”. These consist of computer, R&D & technical,

    marketing, business organisation, and human resources development services.

    Services that do not fall within the scope of KIBS definitions, though they may be knowledge-driven, take various forms. Some are mainly excluded on the grounds of

IOIR Report on KIS and Science Base

    servicing final consumers to a large extent e.g. Health/medical services; Consumer

    Financial and Real Estate services; Education services (other than specialised

    training for industry); Broadcasting and other mass media (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 (with possible exceptions in industry support schemes); Repair/maintenance (with the exception of activities related to advanced IT). Othe services are less oobviously knowledge-driven (in the main) as well as being consumer-oriented: Social welfare services; HORECA i.e. Hotels, etc. and Catering;

    Leisure/tourism; Personal consumer services; Entertainment; Retail and wholesale

    services (wholesale is business-oriented of course, and includes some knowledge-intensive branches); Post, Transport and Physical Distribution (although some

    specialised services may be included - e.g. priority delivery services, and transport logistics are highly technology-intensive)

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    IOIR Report on KIS and Science Base

    Table A.1 Statistical Classification of Technology-Related KIBS

     Definite cases NACE-codes Hardware consultancy services 7210 Software consultancy and supply services 7220 Data processing services 7230 Database activities 7240 Maintenance and repair of office equipment 7250 Other computer related activities 7260 Computer and related IT services 72 Research & (experimental) Development 73 R&D on natural sciences and engineering 7310 R & experimental D in social sciences and humanities 7320 Architectural and engineering activities and related technical 742 consultancy Technical testing and analysis 743 More tentative cases Technology related publishing Part of 221 Wholesale in machinery, equipment etc.* 516 Logistic services and related transport services 632 T-KIBS in telecommunications Part of 6420 Patent bureaux 7411.5 Technology-related market research Part of 7413 Technology-related economic and management consultancy 7414 services Technology-related labour recruitment and provision of Part of 745 personnel Technology related training Parts of 8042 / 8022 /

    8030

* The assumption here is that machinery and equipment wholesale services act as

    distributors of (technical) knowledge and related expertise.

    Source: Bilderbeek et al (1998)

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IOIR Report on KIS and Science Base

    However, just as many traditional professional service sectors include some firms that are becoming more technology-based KIBS, so many of the non-KIBS sectors mentioned above feature some emerging activities that may be regarded as KIBS. For example, health care is a sector where there are extremely highly qualified professional staff, many laboratories and specialised researchers, and a high rate of development and use of new technology and techniques (e.g. health informatics). Some of these staff may supply services to other organisations and eventually new firms or units may be created out of these activities. Specialised information services may well arise for any of these sectors, too, whose status may be debatable.

    KIBS do not include business services whose roles are not knowledge-based in this way: cleaning, catering, security, transport, etc. In practice there are many borderline cases and grey areas, especially when we move from the characterisation of broad sectors and subsectors to looking at individual firms. For instance, logistics services may not only transport goods from place to place, but can also supply sophisticated and knowledge-intensive support for the planning and management of transport, storage and related arrangements for clients. If such support is the main role of the firm (a logistics firm may even contract the actual transport out to other companies), then it makes sense to regard the firm itself as a KIBS (though the whole sector in which it falls may not be a KIBS sector). When, in contrast, the main activity is the transport itself, then the firm would not be a KIBS (and will not in general fall within a KIBS sector). Similarly, a manufacturing company that supplies some KIBS functions internally is not regarded as a KIBS if these come to predominate, we may well

    query whether this really remains primarily a manufacturing firm.

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IOIR Report on KIS and Science Base

    Annexe B: Detailed Results of CIS3 Analyses

    This Annexe presents the data on which the Figures of Chapter 4 are based, as well as a few examples of alternative workings of the data.

    Tables B.1, B.2 Employment of Graduates UK CIS3 Data

    Calculated by Bruce Tether and Peter Swann from CIS3 data. Subsectors are displayed only if sufficient cases available. Data are unweighted.

    Table B.1 Employment of Graduates in non-Services

     S&E graduates Other Graduates

     OF TOTAL Of those OF TOTAL Of those

    employing employing

     % Median % Median Total Mean Mean Mean Mean

    employemploy

    ing ing

    Low Tech 1074 39% 2% 4.4% 2% 56% 5% 8.2% 3%

    Manufacturing

    (OECD def.) [n.

    1325]

    Medium Low Tech 637 52% 4% 7.2% 5% 43% 3% 7.0% 3%

    Manufacturing

    (OECD def.) [n. 744]

    Medium High Tech 873 71% 8% 10.8% 6% 59% 5% 8.0% 4%

    Manufacturing

    (OECD def.) [n.

    1006]

    High Tech 214 86% 13% 15.6% 8% 73% 7% 9.9% 5%

    Manufacturing

    (OECD def.) [n. 242]

    Extraction, Utilities, 159 58% 7% 12.8% 8% 58% 6% 10.1% 5%

    Recycling [n. 207]

    Construction [n. 947] 768 38% 3% 9.0% 5% 39% 4% 11.1% 4%

    Note

    A note on the data in Table B.1., which are of interest though not strictly pertinent to the main themes of the present paper. First, consider manufacturing We see that the share of firms employing scientists and engineers (S&E) increases with the

    sector's classification on a continuum from low to high tech manufacturing (see Annexe 1 for definitions here). Not surprisingly, the mean number of S&Es employed by firms in these sectors also increases along this continuum, as does the

    mean and median shares of graduates employed by firms. (Note that since firm sizes vary, these figures should not be equated with the share of graduates in the sector‟s overall employment.) This is not quite paralleled by the results for other

    graduates (OG). Here, the lowest tech sectors seeming to rival the medium high tech ones in their uptake of OGs. (Perhaps these are established industries where many graduates are required to help with marketing and similar functions? In any case, the result prevents us speaking of a clear trend here.)

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    IOIR Report on KIS and Science Base

    Table B.2 Employment of Graduates in Services

     S&E graduates Other Graduates

     OF TOTAL Of those OF TOTAL Of those

    employing employing

     % Median % Median Total Mean Mean Mean Mean

    employemploy

    ing ing

    Technical Services 277 74% 33% 45.4% 48% 62% 15% 23.7% 11%

    Tech Servs 1 194 68% 30% 43.6% 43% 59% 16% 27.6% 15% Architectural &

    Engineering (SIC92

    74.2)

    Tech Servs 2 R&D 83 87% 42% 48.7% 50% 69% 11% 15.9% 10% and Technical

    Testing

    InfoTech Services (in 202 78% 29% 37.6% 30% 76% 19% 24.3% 17% electronic media

    reprod)

    InfoTech 1 146 82% 36% 43.3% 40% 78% 21% 27.2% 20% Computer Services

    (ex. Maintenance &

    Repair)

    InfoTech 2 56 68% 13% 19.4% 9% 71% 11% 15.9% 10% Telecoms and other

    IT services

    Financial Services 503 31% 3% 10.8% 5% 72% 14% 19.2% 10% Fin Servs 1 347 31% 4% 11.6% 5% 78% 16% 19.9% 10% Banking, Insurance,

    Property Trading

    Fin Servs 2 Renting 156 31% 3% 9.1% 4% 58% 10% 16.8% 10% and Leasing

    Business Services 738 25% 5% 20.4% 10% 82% 24% 29.0% 20% (inc. Publishing,

    Property Dev.)

    Prof Servs 1 385 14% 2% 18.0% 10% 88% 26% 29.3% 24% Qualifiactional

    Legal / Accounting

    Prof Servs 2 180 33% 5% 15.6% 5% 73% 21% 29.3% 18% Informational

    Publish, Trav/Est Ag,

    Mkt Res

    Prof Servs 3 173 41% 11% 26.2% 12% 78% 22% 28.1% 15% Managerial /

    Organisational

    Transport & Storage 472 23% 1% 6.1% 2% 47% 4% 9.2% 3% (not travel or tour

    agents)

    Transport 1 108 29% 1% 4.7% 2% 47% 3% 7.4% 2% Passenger

    Transport 2 Freight 281 20% 1% 4.4% 2% 41% 4% 8.8% 3% (inc. Storage)

    Transport 3 Other 83 24% 3% 12.9% 3% 66% 8% 11.7% 5%

    Wholesale 905 35% 5% 13.2% 5% 53% 7% 13.8% 5%

    Total (all sectors) 6822 45% 6% 14.1% 5% 58% 8% 14.7% 5%

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IOIR Report on KIS and Science Base

    The lower versions of each figure concentrate on the service industries only, and suggest that a few “clusters” of KIS can be depicted. At first glance, these seem to indicate that there are actually positive associations between employment of each type of graduate - but these are not terribly strong relationships, with some sectors deviating considerably from the regression lines, concentrating on one or other type. (If anything, the strength of the relationships looks lower once the nonservices are excluded from the graphs. Indeed, a visual inspection suggests that there is quite a striking tilted V-shaped pattern for the services - perhaps telling us that there are two broad vectors, at different angles, in the data. Speculatively, we could suggest that one of these represents the requirements for professional staff to be backed up by S&E staff in non technology-intensive services, while the other pattern represents the different interrelation between needs of the two types of knowledge in more technology-intensive services. Non-technologists need technologists for different reasons and to different extents than vice versa.

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    IOIR Report on KIS and Science Base

    Figure B.1 Mean of Firms’ Graduate Employment, by Sectors (OG vertical S&E

    horizontal)

    35%

    PS230%

    PS3PS1TS1

    ITS125%

    20%FS1

    FS2ITS2TS215%WHS

    CONTRS3

    EXT10%HTMTRS2MHTM

    MLTMTRS15%

    LTM

    0%

    0%10%20%30%40%50%35%

    PS230%

    PS3PS1TS1

    ITS125%

    20%FS1

    FS2ITS2TS215%WHS

    CONTRS3

    EXT10%HTMTRS2MHTM

    MLTMTRS15%

    LTM

    0%

    0%10%20%30%40%50%

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IOIR Report on KIS and Science Base

Figure B.2 Mean Employment Shares of Graduates, among Employers only, by

    Sector

35.0%

    30.0%PS2PS1PS3TS1

    ITS125.0%

    20.0%FS1

    FS2ITS2TS215.0%WHS

    CONTRS3

    EXT10.0%TRS2HTMLTMMHTM

    TRS1MLTM5.0%

    0.0%

    0.0%10.0%20.0%30.0%40.0%50.0%60.0%

    35.0%

    30.0%PS2PS1PS3TS1

    ITS125.0%

    20.0%FS1

    FS2ITS2TS215.0%WHS

    CONTRS3

    EXT10.0%TRS2HTMLTMMHTM

    TRS1MLTM5.0%

    0.0%

    0.0%10.0%20.0%30.0%40.0%50.0%60.0%

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    IOIR Report on KIS and Science Base Figure B.3 Proportion of firms employing OG graduates (horizontal), by mean

    of Firms’ S&E Graduate Employment (vertical), by Sectors 35.0%

    30.0%PS2PS1

    PS3

    TS1ITS125.0%

    20.0%FS1

    FS2ITS215.0%TS2

    WHS

    TRS3CONEXTHTM10.0%

    LTMTRS2TRS1MHTM

    MLTM5.0%

    0.0%

    0%20%40%60%80%100%

    35.0%

    30.0%PS2PS1

    PS3

    TS1ITS125.0%

    20.0%FS1

    ITS2FS215.0%TS2

    WHS

    TRS3CONEXTHTM10.0%

    LTMTRS2TRS1

    MHTM

    MLTM5.0%

    0.0%

     10 0%20%40%60%80%100%

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