Knowledge intensive services in the context of "Research and development"

The knowledge economy, or knowledge-based economy, is an economic system in which the production of goods and services is based principally on knowledge-intensive activities that contribute to advancement in technical and scientific innovation. The key element of value is the greater dependence on human capital and intellectual property as the source of innovative ideas, information, and practices. Organisations are required to capitalise on this "knowledge" in their production to stimulate and deepen the business development process. There is less reliance on physical input and natural resources. A knowledge-based economy relies on the crucial role of intangible assets within the organisations' settings in facilitating modern economic growth.

Knowledge Intensive Business Services (commonly known as KIBS) are services and business operations heavily reliant on professional knowledge. They are mainly concerned with providing knowledge-intensive support for the business processes of other organizations. As a result, their employment structures are heavily weighted towards scientists, engineers, and other experts. It is common to distinguish between T-KIBS, (those with high use of scientific and technological knowledge - R&D services, engineering services, computer services, etc.), and P-KIBS, who are more traditional professional services - legal, accountancy, and many management consultancy and marketing services. These services either supply products which are themselves primary sources of information and knowledge, or use their specialist knowledge to produce services which facilitate their clients own activities. Consequently, KIBS usually have other businesses as their main clients, though the public sector and sometimes voluntary organisations can be important customers, and to some extent households will feature as consumers of, for instance, legal and accountancy services.

The first discussion of KIBS to use the term seems to have been in a 1995 report to the European Commission "Knowledge-Intensive Business Services: Users, Carriers and Sources of Innovation" In the decade since this appeared these sectors of the economy have continued to outperform most other sectors, and have accordingly attracted a good deal of research and policy attention. They are particularly of interest in European countries such as Finland. Care should be taken in reading literature on the topic, since a number of related terms are in wide use. The European Union has recently been referring to a much broader concept of knowledge intensive services (extending well beyond the business services) and to business-related services (including many services which have large markets among final consumers).

The knowledge economy, or knowledge-based economy, is an economic system in which the production of goods and services is primarily driven by knowledge-intensive activities that contribute to the advancement of technical and scientific innovation. The key element of value in this paradigm lies in the increased reliance on human capital and intellectual property as primary sources of innovative ideas, information, and practices. Organizations are called upon to leverage this "knowledge" in their production processes to stimulate and consolidate their business development. This approach is characterized by reduced dependence on physical inputs and natural resources. A knowledge-based economy is founded on the crucial role of intangible assets within organisations as an enabler of modern economic growth.