Survival in spite of location: KIBS in non-core areas

Research Student: Hjalti Nielsen

Duration: 2011 – 2016

Supervisors: Karl-Johan Lundquist, Jerker Moodysson and Martin Henning

The study has a specific focus on Knowledge Intensive Business Services (KIBS) in remote and low-populated areas in Sweden. According to mainstream location theories, economic activities are considered to be a knowledge driven process which relies on the combination of both internal competencies of the firm and external knowledge sources. Such processes are also conceived to be highly endogenous, partially due to the tacit dimension of knowledge, but such knowledge is embedded in people and communicated through personal interaction, and therefore rather sensitive to distance.

Despite it has strongly been theorized and empirically tested that KIBS are mainly to be found in core areas, due to the local dynamics created by the sheer volume of economic actors in such areas, such firms are also to be found in remote and low-populated non-core areas. In contrast to large urban areas, such areas are low in agglomeration economies and knowledge externalities. Remote and low-populated non-core areas have not received much attention hitherto when it comes to the more knowledge intensive economic activities.

The study therefore aims at contribute to knowledge on from what perspective we can explain the location of KIBS in such areas, how they are affected by their location and if and how they can compensate for lack of local business opportunities and knowledge externalities through non-local collaborations. If they are able to do so, it questions both mainstream location theories when it comes to the necessity or importance of sheer volume of agglomeration economies for the location of the more knowledge intensive economic activities and also about the importance of physical proximity for the communication of tacit and intangible knowledge assets.