State of Knowledge-Intensive Business Services (KIBS) in India

Date30 September 2014
Published date30 September 2014
DOIhttps://doi.org/10.1108/WJSTSD-07-2014-0019
Pages271-281
AuthorSeema Joshi
Subject MatterPublic policy & environmental management,Environmental technology & innovation
State of Knowledge-Intensive
Business Services (KIBS) in India
Seema Joshi
Department of Commerce, University of Delhi, Delhi, India
Abstract
Purpose The growing importance of knowledge and innovation in the present era motivated the
author to study knowledge-intensive business services (KIBS) in general and the case of India in
particular. The purpose of this paper is to track in brief the strength of Indias economy lying in growth
of knowledge-intensive services (KIS), which if harnessed properly can lead to its transition to a
knowledge economy. More specifically, the paper tries to address two important questions: first, what
constitutes KIS and KIBS? And second, how has KIBS been performing in India?
Design/methodology/approach The paper makes use of secondary sources of data including
various reports, books, journals and statistical tools. An attempt has been made in this paper to review
those studies which try to define KIS and KIBS. The data analysis of KIBS in the case of India has been
done for the period 2004-2005 to 2011-2012 for which information was available from National
Accounts Statistics published by Central Statistical Organization.
Findings The paper concludes that no unanimously accepted definition of KIBS has been given so
far. In the Indian context it is defined as; business services include services like computer-related
services, R&D, accounting services and legal services and renting of machinery in order of importance
(shares) as per Indias National Accounts. An analysis of performance of KIBS in India shows
that among KIBS there are two T-KIBs (with a technology base), namely IT and ITeS, and that
R&D services occupy the first and second position in Indias gross domestic product (GDP), originating
from business services (KIBS). R&D services registered the highest average annual growth rate
followed by computer-related services, renting of machinery, legal services and accounting and
auditing services during the seven-year period from 2004-2005 to 2011-2012. However, the compound
annual growth rate (CAGR) was highest in the case of R&D services followed by renting of machinery,
computer-related services, legal and accountancy and auditing services. KIBS registered a CAGR of
13.04 per cent, which was higher compared to overall GDP growth rate (at 7.36 per cent), and also
compared to the CAGR of the real estate and ownership of dwellings and business services segment as
a whole (7.62 per cent). Therefore, there is a need to tap the potential of all these KIBS, i.e. knowledge-
intense high-tech services (KIHTS) and knowledge-intense marketing services taken in the study
through policy initiatives. There is also a need to deal with emerging issues and challenges in KIBS,
especially in KIHTS.
Originality/value Although there is empirical research on the KIS and KIBS of European
Economies, KIBS in India has not received enough research attention. This paper will therefore mainly
focus on the performance of KIBS in India.
Keywords India, R&D, Knowledge-intensive services (KIS),
Knowledge-intensive business services (KIBS), Knowledge-intense high-tech services (KIHTS),
Knowledge-intense marketing services (KIMS)
Paper type Research paper
Introduction
It has been recognized by the Organ ization for Economic Co-operation and
Development (OECD, 1996) that the role of knowledge (as compared with) natural
resources, physical capital and low-skilled labour has taken on greater importance.
A knowledge economy is [] one in which the generation and exploitation of
knowledge has come to play the predominant part in the creation of wealth. It is not
simply about pushing back the frontiers of knowledge; it is also about the most
World Journal of Science, Technology
and Sustainable Development
Vol. 11 No. 4, 2014
pp. 271-281
© Emerald Group Publishing Limited
2042-5945
DOI 10.1108/WJSTSD-07-2014-0019
The current issue and full text archive of this journal is available at
www.emeraldinsight.com/2042-5945.htm
271
KIBS in India

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