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This chapter investigates how regional start-up rates in the knowledge-intensive services and high-tech industries are influenced by knowledge spillovers from both universities and firm-based R&D activities. Integrating insights from economic geography and organizational ecology into the literature on entrepreneurship, we develop a theoretical framework which captures how both supply- and demand-side factors mold the regional bedrock for start-ups in knowledge-intensive industries. Using multilevel data of all knowledge-intensive start-ups across 286 Swedish municipalities between 1994 and 2002 we demonstrate how characteristics of the economic and political milieu within each region influence the ratio of firm births. We find that knowledge spillovers from universities and firm-based R&D strongly affect the start-up rates for both high-tech firms and knowledge-intensive services firms. Further, the start-up rate of knowledge-intensive service firms is tied more strongly to the supply of university educated individuals and the political regulatory regime within the municipality than start-ups in high-tech industries. This suggests that knowledge-intensive service-start-ups are more susceptible to both demand-side and supply-side context than is the case for high-tech start-ups in general. Our study contributes to the growing stream of research that explains entrepreneurial activity as shaped by contextual factors, most notably academic institutions, such as universities that contribute to knowledge-intensive start-ups.

Purpose – The main aim of this chapter is to analyse the implications of innovation and, directly and indirectly, of cooperation on the internationalisation of knowledge-intensive business services (KIBS). Specifically, we analyse the potential impact of innovation capability on the propensity of KIBS to internationalise. We also look at whether cooperation has any influence on the international growth of these firms or on their innovation results.

Methodology/approach – This is an empirical research. Empirical analyses are based on information provided by the Spanish Technological Innovation Panel data for the period 2003–2005. Tobit and probit models are estimated to test our hypotheses.

Findings – The empirical findings support all our theoretical hypotheses. A positive relationship between cooperation, innovation and internationalisation of KIBS is also found. Thus, the results confirm the relevance of innovation for internationalisation. KIBS that establish collaborative relationships find access to international markets easier and improve their innovation capability. In these terms, cooperation is found to be directly and indirectly related with internationalisation in KIBS.

Originality/value of paper – The services sector is the most important sector in Spain and Europe nowadays, and it is the sector that has experienced the fastest growth in recent years. However, the research efforts it has received have not been commensurate with its size and role in international commerce. In general, the literature has paid scant attention to the relationships between innovation and internationalisation in services sectors, and more specifically, among KIBS. This chapter sheds light on this topic.

Though KIBS constitute only a small proportion of all services, researchers frequently accord them a significance beyond that indicated by their share in employment or value added (Tether & Hipp, 2002; Gallouj, 2002). For example, KIBS are held to play ‘an increasingly dynamic and pivotal role in ‘new’ knowledge-based economies’ (Howells, 2000, p. 4), as sources of important new technologies, high-quality, high-wage employment and wealth creation (Tether, 2004). Unfortunately, while much of the rhetoric seems intuitively reasonable, one inevitably encounters definitional difficulties in delimiting the specifics of innovation in KIBS, with a variety of, more or less operational, working definitions employed by the academic literature (Wong & He, 2005).

Universities have a new role in the commercialisation of knowledge (Etzkowitz, 1998). The new role began with science parks and increased collaboration in 1980s and, with other forms of commercialisation, broadened to licensing and spin-off creation in 1990s, which also involved students (Rasmussen, Moen, & Guldbransen, 2006). Commercialisation has led to a situation where a complex web of relations exists between higher education, spin-offs created by them and large firms. All together the progress has been important because the ‘commercialisation of knowledge connects the higher education to the users of the knowledge’ (Etzkowitz, 1998). The rise of the knowledge-based society also brings the creation of knowledge-intensive firms into focus. The aim of the chapter is to create more understanding how small technology-based Knowledge Intensive Business Service (KIBS) firms can have a new role in knowledge commercialisation. In this chapter, the innovation chain is considered as a continuum from basic research through applied research to product development and finally commercialisation. There still exists a ‘valley of death’ between research and commercialisation (Markham, 2002). Spin-offs are one means to cross it.

Agriculture and associated services are central to the rural economy of the United Kingdom. Rural veterinary enterprises are important providers of services to livestock producers, but are now facing concerns over their future economic viability. The objectives of this chapter are to outline the changes occurring in the veterinary and agricultural sectors, and to explore the main issues affecting veterinary enterprises in a changing business environment.

This is a conceptual chapter contextualised mainly within the United Kingdom. As such, the methodological approach comprises a critical review of current academic literatures, as well as government reports and relevant media articles.

The findings demonstrate that the commercial success of rural veterinary enterprises is critical to ensuring the future provision of high-quality animal health services to both farmers and government. The current issues facing farmers are likely to affect their willingness and resources to invest in veterinary services. Furthermore, farmers may have doubts as to vets’ ability to provide business-focussed services that add value. In addition, many public services are outsourced to private veterinary enterprises, and forthcoming policy changes are expected to lead to reduced income from public sources for both vets and their livestock farming clients. While wider issues affecting agriculture are beyond the control of private veterinary practitioners, veterinary enterprises will need to ensure that they can deal with such challenges and, where required, adapt their services accordingly.

The chapter is based on a review of extant literatures, and the scope of the research is therefore limited to existing knowledge about the farm animal veterinary business landscape.

The chapter summarises current knowledge of the challenges facing rural veterinary enterprises. While some of the issues described are specific to the veterinary sector, many are also relevant to other rural SMEs providing knowledge-intensive services to farmers. The chapter also describes areas requiring further empirical research.

The implemented European Union Services Directive aimed at creating a unified European market for trade in services. However, the implementation of the institutions was not fully successful as to the characteristics of international services caused challenges in the ratification of the Directive. Research on international services is facing similar challenges based on the fragmented, inconclusive, and at times even contradictory findings of international services literature with regard to service characteristics. Thus, each academic field of international business, economic geography, and service management has tried to identify international service characteristics, but no unified characterization is found. The challenges in defining the different types of services, difference in the levels of analysis, and various impacts of policies and institutional environments on the service, cause these differences. The authors see the need for a unified framework that combines the different literatures and considers the policy implications. The authors develop a framework consisting of four components of international service characteristics, that is, the connectivity of service actors to the environment, the configuration of service activities within organizational set-ups, the dyadic collaborative interaction between service actors, and the created value by the services. The authors specifically consider policy and institutions as well as a vast variety of literature streams to support the arguments.

The aim of this chapter is to present a comprehensive definition of Global Services that encompasses the wide variety of phenomena currently present in the international trade in services to bring to light the shift we are witnessing from Business Process Outsourcing (BPO), Information Technology Outsourcing (ITO), and Knowledge Process Outsourcing (KPO) models toward end-to-end (E2E) services and to highlight the factors which have had and will have an effect on these processes in the coming years.

This research explores how subsidiary embeddedness in different networks, both internal and external to the firm, contributes to the innovation of the service multinational corporation (MNC). Specifically, the authors analyze the different effects of networks on MNC’s subsidiaries performing competence-creating or competence-exploiting innovation activities, in the context of the service industry. The present study analyzes the data of 178 foreign-owned subsidiaries in the service sector performing innovation in Spain. The results of data analysis at two points in time show that external and internal embeddedness have a positive impact on the subsidiary innovation. Moreover, external embeddedness has a major positive influence on the competence-creating rather than on the competence-exploiting activities, while the internal embeddedness is equally important for both types of innovation. Therefore, this study contributes to further our understanding of how subsidiaries’ linkages affect innovation of the service MNC.