EXPLAINING THE DEMAND FOR PRODUCER SERVICES: IS COST‐DRIVEN EXTERNALIZATION THE MAJOR FACTOR?

William B. Beyers

85 citations0/0 files storedPapers of the Regional Science Association

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Abstract

ABSTRACT Producer services employment has grown rapidly within advanced economies in recent years. The bases of demand related to this growth are not well understood by regional scientists. A common view is that this growth is largely attributable to cost-driven factors and vertical disintegration processes on the part of producer service users. This paper demonstrates that cost-driven externalization is not the most important force underlying growth in demand for producer services. The need for specialized knowledge is by far the most important factor behind producer services demand, combined with a variety of other cost, quasi-cost, and non-cost-driven forces.

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1991The Competitive Advantage of Nations 1990The Competitive Advantage of Nations 1994Lean and mean: the changing landscape of corporate power in the age of flexibility 1988Metropolis 1988Metropolis: From the Division of Labor to Urban Form.2014The Intelligent Enterprise 1993Manufacturing Demand for Business Services in a Core and Peripheral Region: Does Flexible Production Imply Vertical Disintegration of Business Services?1991Factories in Danish Fields: How High-Wage, Flexible Production has Succeeded in Peripheral Jutland

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2002Why do business service firms cluster? Small consultancies, clustering and decentralization in London and southern England 2008Urban Hierarchy or Local Buzz? High-Order Producer Service and (or) Knowledge-Intensive Business Service Location in Canada, 1991-2001 2000THE GEOGRAPHIES OF PRODUCER SERVICES 2014On the Relationship between Innovation and Wage Inequality: New Evidence from C anadian Cities 2011Internalisation or externalisation?

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