Professional Occupations, Knowledge-Driven Firms, and Entrepreneurship: A National and Regional Analysis

By Gross, Andrew C.; Holtzblatt, Mark et al. | Business Economics, October 2013 | Go to article overview

Professional Occupations, Knowledge-Driven Firms, and Entrepreneurship: A National and Regional Analysis


Gross, Andrew C., Holtzblatt, Mark, Javalgi, Raj, Poor, Jozsef, Emeric, Solymossy, Business Economics


The worldwide dominance of Western nations in commercial knowledge-intensive services has declined between 1995 and 2010, but the slippage in revenue was only from 88 to 79 percent. The European Union, and North America remain the two largest regions in consumption and in exporting. Four professional service sectors--accounting, law, engineering, and management consultancy--have shown stability or even growth in the past decade. Entry and expansion requirements in these fields, at home and abroad, constitute barriers for both individual professionals and companies. Entrepreneurship is evident in these sectors, as small and medium size enterprises have nutin-tained their viability against large firms. Only accountancy shows a high degree of concentration, but competition in this sector, too, is expected from the emerging economies, especially China. Professional service firms of the West have forged strong linkages with both domestic and foreign clients via relationship marketing. Technology is an important factor via automation. Although each of the four sectors is facing both external and internal challenges, they continue to grow and appear to be meeting the challenges in part by more innovation and transparency.

Business Economics (2013) 48, 246-259. doi: 10.1057/be.20 13.22

Keywords: occupations; prgfessional; knowledge-intensive; services; entrepreneur

  Like the drummers, messengers, and concubines that accompanied
  ancient armies on the march, professional-service firms followed
  their industrial clients as they expanded around the world in
  the 1980s and 1990s. Wherever western multinationals went to set
  up or buy a new business, there too went their accountants,
  bankers, consultants, and lawyers. From Moscow to Buenos Aires,
  the slick professional-service firms were ready to advise on
  what deals to do, how to finance them, how to compute their
  consequence and how to tie up all those messy loose ends.
  It was heady stuff....

  Home Torts from Abroad: Professional-Service Firms The
  Economist, February 28, 2004, p. 14.

In the 20th century, the tertiary or service sector became dominant in the economies of both developed and developing nations, while the role of the secondary (manufacturing) and the primary (natural resource) sectors declined sharply. In the 21st century, this trend continues with knowledge-intensive services constituting a significant and growing segment. This field consists of five sub-sectors: business, communication, finance, education, and health services. The first three of these five have been labeled commercial knowledge-intensive services. The absolute size and the growth rates for value added by these services in major industrialized and emerging economies during 1995-2010 are shown in Table 1. The former cluster is far bigger and remains dominant; but the latter is starting to close the gap [Organisation for Economic Cooperation and Development 2001; National Science Board 2012].

Table 1. Value Added of Commercial Knowledge-Intensive
Services in Selected Major Western and Emerging Nations,
1995--2010

Country            (Billion Current $ and Percent
                                   Annual Growth)

                1995  2005   2010  Percent change
                                          '10/'95

France           248   385    522            5.1%

Germany          388   482    585             2.8

Spain             68   141    217             8.0

United Kingdom   182   473    542             7.5

United Suites   1461  2972   3607             6.2

Canada            79   180    273             8.6

Australia         69   153    339            11.2

Japan            767   790    916             1.2

China             99   227    714            14.1

India             35    88    225            13.2

Russia            34    92    205            12.7

Brazil            96   113    281             7.4

Mexico            38   105    128             8. … 

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