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Growth challenges for the Dutch business services industry; international comparison and policy issues


  • Henk Kox


This report summarises the findings of a study on the growth factors and growth prospects of the business services (BS) industry. It puts Dutch BS industry in an international comparative perspective, identifying its particular strengths and weaknesses. Lees ook het bijbehorende persbericht.The study sketches policy options for fostering the growth and welfare contribution of the Dutch business services industry.Chapter 2 chapter untangles factors behind the extraordinary growth of the BS industry during last decade, comparing it with other market industries. It analyses how the growth pattern is affected by product differentiation and the structure of competition. Particular attention is given to the role of foreign competition.Chapter 3 deals with the impact of BS industry on the growth capacity of other industries. It shows how intermediary BS inputs can put other industries on a higher growth path that is associated with a higher specialisation level in labour and human capital (increased roundaboutedness). Knowledge-intensive BS branches not only generate their own innovations (e.g. software industry) but also contribute to the dissemination of best-practice knowledge and innovations throughout the economy. Remarkably, the BS industry has itself a very poor record of productivity growth. Over time, with a growing BS industry, this may become a drag on macro-economic growth if current trends will continue.Chapter 4 pinpoints the main aspects in which the Dutch BS industry differed from its foreign counterparts, showing its comparative strengths and weaknesses. The strengths appear to be associated with its very fast growth and its relative openness to foreign competition. The main weaknesses relate to meagre innovation efforts and a stagnating labour productivity growth.Chapter 5 provides a scenario analysis of the future growth of Dutch BS industry, covering the period till 2010. Apart from general GDP growth, six driving forces determine the growth outcomes for BS industry: technological change; outsourcing tendencies; final domestic demand structure; internationalisation tendencies; institutional developments; and structural changes in factor markets. Two coherent scenarios, an optimistic and a pessimistic one, sketch the possible courses of events. The chapter concludes with a quantitative projection of BS growth until 2010.Chapter 6 identifies future-oriented policy issues, after identifying the dominant market failure problems with regard to the BS industry. The main policy options relate to: strengthening the BS industry's own productivity development; achieving more market transparency; getting more exposure of markets to foreign competition; and strengthening the innovation contribution of the BS industry.

Suggested Citation

  • Henk Kox, 2002. "Growth challenges for the Dutch business services industry; international comparison and policy issues," CPB Special Publication 40, CPB Netherlands Bureau for Economic Policy Analysis.
  • Handle: RePEc:cpb:spcial:40

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    Cited by:

    1. Andrés Maroto-Sánchez, 2010. "Productivity in the services sector: conventional and current explanations," The Service Industries Journal, Taylor & Francis Journals, vol. 32(5), pages 719-746, October.
    2. Henk Kox & George Leeuwen & Henry Wiel, 2007. "Market Structure, Productivity and Scale in European Business Services," Palgrave Macmillan Books, in: Luis Rubalcaba & Henk Kox (ed.), Business Services in European Economic Growth, chapter 11, pages 195-212, Palgrave Macmillan.
    3. Maroto-Sánchez, Andrés & Cuadrado-Roura, Juan R., 2009. "Is growth of services an obstacle to productivity growth? A comparative analysis," Structural Change and Economic Dynamics, Elsevier, vol. 20(4), pages 254-265, December.
    4. Meindert Flikkema & Paul Jansen & Lidewey Van Der Sluis, 2007. "Identifying Neo-Schumpeterian Innovation in Service Firms: A Conceptual Essay with a Novel Classification," Economics of Innovation and New Technology, Taylor & Francis Journals, vol. 16(7), pages 541-558.
    5. Mulder, Nanno & Sáez, Sebastián & De Camino, Claudia & Finot, Alfonso, 2007. "Trade in services in Latin America and the Caribbean: an analysis of recent trends," Comercio Internacional 4429, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL).
    6. Henk L.M. Kox, 2004. "The Contribution of Business Services to Aggregate Productivity Growth," Contributions to Economic Analysis, in: Fostering Productivity: Patterns, Determinants and Policy Implications, pages 243-264, Emerald Group Publishing Limited.
    7. Andrés Maroto & Luis Rubalcaba, 2008. "Services productivity revisited," The Service Industries Journal, Taylor & Francis Journals, vol. 28(3), pages 337-353, April.
    8. Henk L. M. Kox, 2013. "Export Decisions of Services Firms Between Agglomeration Effects and Market-Entry Costs," Advances in Spatial Science, in: Juan R. Cuadrado-Roura (ed.), Service Industries and Regions, edition 127, chapter 0, pages 177-201, Springer.
    9. Harold Creusen & Bert Minne & Henry van der Wiel, 2006. "Competition in the Netherlands; an analysis of the period 1993-2001," CPB Document 136, CPB Netherlands Bureau for Economic Policy Analysis.
    10. Gallouj, Faïz & Weber, K. Matthias & Stare, Metka & Rubalcaba, Luis, 2015. "The futures of the service economy in Europe: A foresight analysis," Technological Forecasting and Social Change, Elsevier, vol. 94(C), pages 80-96.
    11. Kox, Henk L.M. & Rubalcaba, Luis, 2007. "Business services and the changing structure of European economic growth," MPRA Paper 3750, University Library of Munich, Germany.
    12. Henk L.M. Kox, 2003. "Business services and the Baumol disease," Development and Comp Systems 0309007, University Library of Munich, Germany.
    13. Pim den Hertog & Luis Rubalcaba, 2010. "Policy Frameworks for Service Innovation: A Menu-Approach," Chapters, in: Faïz Gallouj & Faridah Djellal (ed.), The Handbook of Innovation and Services, chapter 26, Edward Elgar Publishing.
    14. Andrés Maroto-Sanchez, 2010. "Growth and productivity in the service sector: The state of the art," Working Papers 07/10, Instituto Universitario de Análisis Económico y Social.
    15. Henry van der Wiel & George van Leeuwen, 2003. "Do ICT spillovers matter; evidence from Dutch firm-level data," CPB Discussion Paper 26, CPB Netherlands Bureau for Economic Policy Analysis.
    16. Juan R. Cuadrado-Roura & Andres Maroto-Sanchez, 2011. "Regional productivity growth in European countries. The role of services," ERSA conference papers ersa10p163, European Regional Science Association.

    More about this item

    JEL classification:

    • L8 - Industrial Organization - - Industry Studies: Services
    • L84 - Industrial Organization - - Industry Studies: Services - - - Personal, Professional, and Business Services
    • L1 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance
    • L25 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Performance
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes
    • O4 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity
    • D2 - Microeconomics - - Production and Organizations


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