How Knowledge Intensive Business Services Foster Entrepreneurial Dynamics and Macroeconomic Perfomance in European Economies?
How Knowledge Intensive Business Services Foster Entrepreneurial Dynamics and Macroeconomic Perfomance in European Economies?

Author(s): Daniel Badulescu, Alina Badulescu, Sebastian Şipoş-Gug, Anamaria Diana Herte
Subject(s): Social Sciences, Economy
Published by: Vysoká škola ekonomická v Praze
Keywords: Knowledge-based services; entrepreneurial activity; macroeconomic indicators; European Union
Summary/Abstract: Purpose:The knowledge and innovation-basedeconomy is internationally accepted as a key factor for competitiveness, and the European Union, which is constantly searching for competitiveness, has recognized more than two decades ago the role and importance of Knowledge Intensive Business Services (KIBS) in transferring innovations and competences to all sectors of the economy, as sources of innovation and modernization, diversification and dynamism for entrepreneurial activities. In this context, we intent to investigate the complex relationship between KIBS and entrepreneurial dynamics, including terms of macroeconomic effects (GDP and labor productivity). Design/methodology/approach:As an indicator of KIBS density it was used the share of companies from the KIBS sector in the total number of active companies, every year, for each country in the study. The data was obtained from EUROSTAT and it covers the EU27 member countries over the 2008-2012 period using NACE Rev. 2 classification system. Findings:The analysis provided interesting, complex andsometimes surprising results. Thus, partly offsetting expectations, we did not find that the share of KIBS firms stimulated entrepreneurial activity (as new firms creation), but that they are, however, a factor preventing discontinuity of the companies and, under certain conditions, a factor driving to increasing labor productivity in the EU economy. Research/practical implications:We found out that the impact of KIBS on the entrepreneurial activity at the level of the 24 European Union’s member state is mostly indirect. Moreover, we consider that although no evidence was found that the share of KIBS companies in the total number of active companies is directly fostering the entrepreneurial activity, the density of KIBS has been proved to be a factor preventing the closure or discontinuing of the companies, as well as a factor leading to increased labor productivity. Originality/value:The paper brings evidence and bridges the existing gap regarding the role of a very innovative sector of the economy, namely the KIBS sector, and argues the necessity for public policies to foster the development of these activities.

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