Research On Impacts Of Knowledge Intensive Business Services On China’s Innovative Economy

In the context of building innovative nation being established as strategic mission of China’s middle and long term planning, developing and perfecting the national system of innovation become a hot topic in recent researches. With the deepening and development of knowledge-based economy, Knowledge intensive business services (KIBS), as the major part of knowledge and information service sub-system, are showing their great contribution to the innovation capability for their distinct characteristics. However, both the whole service industry and the structure of service industry in China are much less developed compare to developed countries. Therefore, it is very important to conduct in-depth research about the contribution of KIBS to innovation and figure out the potential problems in China to orientate the future development of service industry, thereby realizing the smooth transition of economic base from resource-driven to innovation-driven and service-driven.Based on the systematical analysis of the function and mechanism of KIBS on the system of innovation, this paper first discussed the relationship between KIBS and regional innovation and established a conceptual model of the functional mechanism of KIBS on the innovation system through three dimensions of innovation diffusion, innovation efficiency and innovation capability. Second, this paper analysed the impact of KIBS as a whole on regional innovative capability from the perspective of industrial agglomeration and spatial agglomeration by using knowledge production function and regional panel data. Additionally, we introduced the average level of human capital and its cross-term with KIBS agglomeration to investigate the potential threshold effect of human capital. Third, through combing the function of KIBS in the system of innovation and the theory of innovation production process, this paper analysed the impact of KIBS and its sub-industries on the regional two-stage innovation efficiency, and compared their performances in different stage. Meanwhile, this paper also introduced some control variables including industrial structure, industrial scale basis, government support, ownership structure, foreign knowledge spillover, economic development and the quality of labour force to give a full picture of the determinants of regional innovation efficiency. Finally, through the view of industrial linkage, based on the input-output tables of2002.,2005,2007and2010and industrial technological characteristics, this paper established innovation diffusion matrix, and then analysed the contributions made by KIBS in industrial innovation network from the perspectives of absolute amount of innovation diffusion, unit amount of innovation diffusion and innovation obtaining method to discuss the contribution of KIBS in industrial innovation network. Furthermore, the social network analysis is adopted to analyse and visualize the structure feature and evolutionary trend of innovation diffusion network.The results show that:(1) Generally, the agglomeration of KIBS has a positive impact on regional innovation capability, but it is conditional at certain level of human capital.(2) The impacts of KIBS on the efficiency of regional innovation and R&D stage are not significant, but it is when it turns to the industrialization stage. To specify, the information and communication services and financial services have positive impacts on the efficiency of industrialization stage, while the business services and science and technology services are not significant in any stages.(3) The development of two-stage efficiency in China is not harmonious, the industrial structure, industrial scale basis, foreign knowledge spillover and the quality of labour force have positive impact on regional innovation efficiency, while the government support, ownership structure have an adverse one. And their impacts are manifested in different stages.(4) The total contribution amount of KIBS to innovation diffusion is relative low, but the unit contribution amount of KIBS is relative high.(5) In the system, the innovation obtaining method is gradually transferring from a self-promotion way to an outside-dependent way.(6) The scale of innovation diffusion network is becoming simpler, while the structure is becoming more centralized, polarized and layered. From the way of innovation diffusion, the science and techonology services have turned into the most important innovation source, seizing the central of the network. Other services and agriculture are the second and third source respectively. From the way of innovation adsorption, the network distribution is more generalized and balanced.The major contributions of this paper are as follows:(1) Established the conceptual model of the functional mechanism of KIBS on regional system of innovation.The former researchers have presented many beneficial discussions about the knowledge creation and diffusion mechanism in KIBS, between KIBS and its clients and between different knowledge systems. However, in my knowledge, they fail to elaborate a systematical conceptual model of the functional mechanism of KIBS on regional innovation system. Based on the previous literatures, this paper established a conceptual model of the functional mechanism of KIBS on regional system of innovation through specifying the regional innovation system into three dimensions, which provided an analysis frameword for the empirical part and a theoretical reference to the relative research.(2) Expanded the traditional knowledge production function, and considere the heterogeneity of labour force between developed and developing regions.The domestic scholars discussed the determinats of regional innovation capability from loads of interesting view and included many constructive results, but the attensions paid to KIBS are not sufficient. Both in the theoretical and empirical researches of foreign scholars, the importance of KIBS in regional innovation are fully accepted, but these researches tend to focus on the developed regions, which neglected the developing countries. Given the relative underdevelopmed service economy in China and the heterogeneity of labour force, this paper expanded the traditional knowledge production function by introducing the impact of KIBS agglomeration and its cross-term with human capital, thereby forming a beneficial complement for the relative research.(3) Combined the the role of KIBS in the system of innovation and the theory of innovation production process.KIBS extert their impacts on regional innovation system mainly through two ways:acting as the secondary knowledge basis and promoting the knowledge diffusion. But in recent literatures, little has combind the function of KIBS with the innovation production process. This paper, through combing them, investigated the impact of KIBS and its sub-industries on the regional innovation efficiency in different stages and made a comparison analysis, provided a new research view for relative theoretical and empirical analysis. In addition, the industrial structure, industrial scale basis, government support, ownership structure, foreign knowledge spillover, economic development and the quality of labour force are concerned as control variables, which orientated the policy focus of promoting innovation efficiency and improving innovative development.(4) Analysed the historical evolution of industrial innovation diffusion network from the view of service industry.Recent researches about technological innovation diffusion mainly focused on the manufacturing industry, while relative neglected the contribution of service industry in this network. Meanwhile, considering the rapid development of China’s KIBS in last ten years, to discuss its contribution to innovation diffusion from the historical way is more meaningful. Therefore, this paper examined the role of KIBS in industrial innovation diffusion and the historical evolution of the network from the view of industrial linkage by using four year input-output table to establish the innovation diffusion matrix, which enriched the empirical research of technological innovation diffusion and provided more empirical evidence for relative research.