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 India’s 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 India’s 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 India’s 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.
World Journal of Science, Technology and Sustainable Development – Emerald Publishing
Published: Sep 30, 2014