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Knowledge Intensive Business Services in Non-Core Areas Preconditions and Strategies for Value Creation and Competitiveness Nielsen, Hjalti

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Knowledge intensive business services in non-core areas Preconditions and strategies for value creation and competitiveness Nielsen, Hjalti 2021 Document Version: Publisher's PDF, also known as Version of record Link to publication Citation for published version (APA): Nielsen, H. (2021). Knowledge intensive business services in non-core areas: Preconditions and strategies for value creation and competitiveness. Lund University. Total number of authors: 1 General rights Unless other specific re-use rights are stated the following general rights apply: Copyright and moral rights for the publications made accessible in the public portal are retained by the authors and/or other copyright owners and it is a condition of accessing publications that users recognise and abide by the legal requirements associated with these rights. • Users may download and print one copy of any publication from the public portal for the purpose of private study or research. • You may not further distribute the material or use it for any profit-making activity or commercial gain • You may freely distribute the URL identifying the publication in the public portal Read more about Creative commons licenses: https://creativecommons.org/licenses/ Take down policy If you believe that this document breaches copyright please contact us providing details, and we will remove access to the work immediately and investigate your claim. LUND UNIVERSITY PO Box 117 221 00 Lund +46 46-222 00 00 HJALTI NIELSEN HJALTI AN ECOLABEL 3041 0903 Knowledge intensive business services in non-core areas non-core in services business intensive Knowledge Knowledge intensive business NORDIC SW services in non-core areas Knowledge intensive business Knowledge intensive business services (KIBS) ryck, Lund 2021 services in non-core areas play a key role in economic development. Preconditions and strategies for value creation and Due to the complex and collaborative nature of their value creation processes, it competitiveness is conventionally argued that they depend Printed by Media-T strongly on physical proximity to large client-, HJALTI NIELSEN and labour-markets, as well as on closeness DEPT. OF HUMAN GEOGRAPHY | FACULTY OF SOCIAL SCIENCES | LUND UNIVERSITY to advanced knowledge infrastructures. This thesis partially questions such conventional assumptions and investigates how KIBS manage to stay competitive in relatively peripheral locations, aided my modern communication technologies. The thesis accounts for the results from in-depth qualitative case studies of KIBS in two Swedish non-core areas. How they compensate for local disadvantages, such as the absence of local agglomeration advantages and long distances to client- and knowledge markets, is the main focus of the cases studies. Hjalti Nielsen is affiliated with the Department of Human Geography, Lund University. Knowledge intensive business services in non-core areas - Preconditions and strategies for value creation and competitiveness is his doctoral thesis. Lund University 958771 Faculty of Social Sciences Department of Human Geography 2021 789178 ISBN 978-91-7895-877-1 9 Knowledge intensive business services in non-core areas 1 2 Knowledge intensive business services in non-core areas Preconditions and strategies for value creation and competitiveness Hjalti Nielsen DOCTORAL DISSERTATION by due permission of the Faculty of Social Sciences, Lund University, Sweden. To be defended at Flygeln, Geocentrum I, Sölvegatan 10, Lund on June 4, 2021 at 13.00. Faculty opponent Docent Patrik Ström Stockholm School of Economics Stockholm, Sweden 3 Organization Document name: Doctoral Dissertation LUND UNIVERSITY Department of Human Geography Date of issue: June 4, 2021 Author(s): Hjalti Nielsen Sponsoring organization Title and subtitle: Knowledge intensive business services in non-core areas. Preconditions and strategies for value creation and competitiveness Abstract Knowledge intensive business services (KIBS) play a key role in economic development. Due to the complex and collaborative nature of their value creation processes, it is conventionally argued that they depend strongly on physical proximity to large client-, and labour-markets, as well as on closeness to advanced knowledge infrastructures. This thesis partially questions such conventional assumptions and investigates how KIBS manage to stay competitive in relatively peripheral locations, aided my modern communication technologies. The thesis accounts for the results from in-depth qualitative case studies of KIBS in two Swedish non- core areas. How they compensate for local disadvantages, such as the absence of local agglomeration advantages (including a dedicated labour market) and long distances to collaboration partners, is the main focus of the cases studies. In conceptual terms, the thesis finds that a fruitful mechanism for disentangling the need for physical proximity, is the distinction of KIBS’ activities into proJect stages, that are different in character, also when it comes to their requirements on interaction and proximity. Understanding their activities in terms of project stages, becomes the key to understanding when and how firm need to draw from traditional agglomeration advantages, or at least physical interaction, and not. The thesis finds that local disadvantages and long distances are, in practice and in our type of economy, less limiting for the competitiveness of non-core KIBS than indicated by previous work. There is a strong timeline in this – “borrowed” agglomeration advantages are more accessible to non-core KIBS than ever before, due to very recent ICT developments and increased usage of the Internet. Relational factors, such as reputation and relationships on client markets, are important to the ways in which KIBS do business. However, the thesis clearly shows how technological change has allowed firm to establish those through temporary proximity and maintenance of links across distance. Also, low local labour turnover and dedicated employees in the non-core areas not only enhances KIBS organizational competences under the conditions of continuous learning by employees. It also strengthens long-term relationships on client markets, including extra regional ones. The combination of these advantages to a great extent counterweighs, or compensates for, the absence of traditional location advantages for KIBS in non-core areas. In sum, for the case firm, the thesis reveals the mechanisms according to which non-core KIBS compensate for absence of local agglomeration advantages and are ultimately able to compete with similar KIBS in large urban areas, on the same markets. This, while the thesis observes firm that do survive competition and not just any firm, provides updated perspectives on firm growth in advanced sectors and in non-core regions, for a post-covid economy. Key words: KIBS, Services, Non-core areas, Peripheral regions, Agglomeration advantages, ICT technologies. Classification system and/or index terms (if any) Supplementary bibliographical information Language: English ISSN and key title ISBN: 978-91-7895-877-1 (print) 978-91-7895-878-8 (pdf) Recipient’s notes Number of pages: 212 Price Security classification I, the undersigned, being the copyright owner of the abstract of the above-mentioned dissertation, hereby grant to all reference sources permission to publish and disseminate the abstract of the above-mentioned dissertation. Signature Date 20121-04-23 4 Knowledge intensive business services in non-core areas Preconditions and strategies for value creation and competitiveness Hjalti Nielsen 5 Coverphoto: RawPixel Copyright Hjalti Nielsen Faculty of Social Sciences Department of Human Geography ISBN 978-91-7895-877-1 (print) ISBN 978-91-7895-878-8 (pdf) Printed in Sweden by Media-Tryck, Lund University Lund 2021 6 The thesis is dedicated to those who fight against the odds 7 Table of Contents List of tables ......................................................................................... 11 List of figures ........................................................................................ 11 Acknowledgements ............................................................................... 12 Abstract ................................................................................................ 13 1. Introduction ............................................................................................. 15 1.1 Point of departure........................................................................... 15 Why non-core KIBS? ................................................................... 18 1.2 Aim and research questions ............................................................. 20 1.3 Contribution of the thesis ............................................................... 22 1.4 Structure of the thesis ..................................................................... 24 2. KIBS and non-core areas .......................................................................... 25 2.1 KIBS .............................................................................................. 25 KIBS value creation and importance of physical proximity ........... 28 Software- and advertising KIBS .................................................... 29 Summary ..................................................................................... 32 2.2 Non-core areas ................................................................................ 33 Different types of peripheral areas ...............................................
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