Market Extension of Knowledge Intensive Business Services in Russia: Spatial Features

Abstract

The literature repeatedly stresses the role of knowledge intensive business services (KIBS) as a provider of knowledge and information to other businesses and organizations. Thus, KIBS are increasingly considered to be the key for regional development at the age of knowledge economy. Nevertheless, few existing studies are dealing with questions of the KIBS sector extension in Russia using micro firm data. This paper presents an analysis of the spatial distribution of KIBS across Russian regions and focuses on the factors determining market extension of KIBS. The study is founded on the unique empirical base derived from the results of mass surveys of more than 650 Russian suppliers of KIBS. Comparative analysis of central and peripheral groups of regions was also conducted. At the first step of investigation it is detected, that Russian KIBS companies are characterized by high concentration in large urban areas due to the presence of more developed infrastructure, higher human capital development, proximity to the large customer, etc. However, companies in the KIBS sector have the potential for development (new knowledge, experience) in collaboration with agents located in other regions. It is established that index of interregional interaction intensity is higher for KIBS producers from peripheral regions. At the next stage of this research six variables were considered: size, experience, service standardization, quality of personnel, personnel costs for a company, and spatial proximity. Our results confirm that four of these variables, but not quality of personnel and personnel costs for a company, correlate with the market extension of KIBS in Russia. It is recognized that spatial proximity is an important factor for both central and peripheral suppliers of KIBS. This paper may be of interest to researchers focusing on the spatial distribution of the elements pertinent to the knowledge economy in Russia. It is also relevant for regional authorities, because it can help them to assess the innovative development capacity of their regions.