Special Issue Territorial servitization: Conceptualization, quantification and research agenda – Winter 2020

Territorial servitization is the analysis of how manufacturing firms and knowledge-intensive business service (KIBS) sectors collaborate in working towards a renaissance of manufacturing competitiveness within regions of developed economies. This editorial note provides four insights. First, it sums up the existing body of knowledge on the topic. Second, it quantifies and maps the territorial servitization activity in Spanish regions. Third, it presents and reflects on the collection of five papers in this special issue, which bring new insights into how geographical proximity, innovation systems, and KIBS heterogeneity benefit our understanding of territorial servitization. Finally, the study provides a number of yet unresolved topics that deserve further academic attention.

This study evaluates how regional competitiveness and relevant properties of the manufacturing industry—i.e., size and rate of manufacturing firms—impact changes in the rate of business service firms. By employing fixed-effects regression models on a sample of 81 Costa Rican counties during 2010-2016, the findings reveal that the quality of the local environment positively affects business service specialization. Besides, manufacturing businesses contribute to increase in the rate of business services; however, this effect is only significant in counties with a greater manufacturing base, that is, in counties with a critical mass of manufacturers, in terms of number of manufacturers.

Territorial servitization is a topic of interest due its impact on regional growth and innovation. Considering that the formation of new KIBS is a good indicator of such TS process and with the aim of contributing to the empirical literature on this topic, this study analyses to what extent the ‘manufacturing quality’ and ‘innovation environment’ profiles determined the different types of new knowledge intensive business services (KIBS). The research tackles the creation of new KIBS in 17 Spanish regions for the period 2000 to 2016 in the respective regions. The results reveal that new KIBS were deeply affected by economic changes that happened as a result of the great 2008 crisis and some KIBS categories are more affected by the techno-economic environment than others.

Servitization strategy is becoming increasingly recognized as a key source of value with important competitive and economic implications across the globe. It has been proven to contribute to territorial performance through the provision of services to manufacturing businesses. However, this contribution has largely been the consequence of the configuration of local industrial structures, and most importantly, of the interconnectedness between manufacturing firms and knowledge-intensive business service (KIBS) firms. Hence, the process of territorial servitization is highly conditioned by the association between manufacturing businesses and KIBS firms. To date, the literature on territorial servitization has mostly described the implications of KIBS firms for service deployment and service innovation in manufacturing, with knowledge and technological capabilities being considered the main variables in its success. Nevertheless, the literature is silent on how the geographical distance between KIBS firms and manufacturing companies may affect servitization capacity. This paper aims to raise the importance of the geographical distance of KIBS firms in manufacturers’ servitization capacity. To meet this aim, an analysis of two manufacturing companies; Alpha and Beta, is provided. They are both located in the Basque country but collaborate with KIBS firms located in different geographical areas, either “inside” or “outside” the Basque region. Through a qualitative study based on (i) measuring these firms’ capacity for servitization, and (ii) in-depth interviews, results suggest that geographical distance plays a key role in the KIBS firm-Manufacturer relationship for servitization capacity purposes, and should be regards as an important aspect for successful territorial servitization.

The literature provides empirical evidence on the importance of geographic location for an effective provision of knowledge intensive business services (KIBS). According to the postulates of territorial servitization, KIBS are also fundamental for the development of manufacturing firms. Despite this, KIBS can be an important source of innovation. In Latin America there is still little attention paid to KIBS, both from academia and from policy makers. The purpose of this research is to analyse the relationship between KIBS co-locations and the innovativeness of the manufacturing firms in context of emerging countries. Drawing on the World Bank Enterprise Survey (WBES) for Latin-American countries, authors analysed 3,029 manufacturing firms using the OLS method. Findings indicated that manufacturing firms’ locations based on KIBS proximity, is a critical determinant of innovativeness. This relationship is considerably stronger in Central American countries, while in South America this relationship is negative, which leads to debate.

The present paper discusses a theoretical model to explain the link between servitization and territorial competitiveness based on the situation in Italy. A key assumption of the model is that once the link between manufacturing and KIBS is established within a TES, there is a positive feedback between the increasing productivity (competitiveness) and the link between firms and KIBS, which becomes stronger and stronger triggering a self-reinforcing dynamic. This means that every evolutionary step of the system influences the next and thus the evolution of the entire system, so generating path dependence. Such a system has a high number of asymptotic states, and the initial state (time zero), unforeseen shocks, or other kinds of fluctuations, can lead the system into any of the different domains of the asymptotic states (1). In other words, both the theoretical assumptions and the empirical model outlined in this paper demonstrate that when a functional relationship between manufacturing and services is established (servitization), economic performance is positive or very positive.