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degrees, the content of the interaction process between KIBS and their customers
(Strambach, 2002a, 2002b).
A number of case studies in dif erent KIBS sectors have shown that the critical knowl-
edge transfer functions of KIBS include:
transferring knowledge in the form of expert technological knowledge and
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management know- how
exchanging empirical knowledge and best practice from dif erent branch contexts
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integrating dif erent stocks of knowledge and competencies that exist in innova-
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tion systems
adapting existing knowledge to the specii c needs of the client (Bessant and Rush,
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2000; Wood, 2002).
These services are therefore in the forefront of the development of the information
economy. The dynamic growth of KIBS is an indication of the presence, in a particular
local economy, of a knowledge-rich business environment, a pool of other types of i rm
that recognise the need for expert external business services and a sophisticated division
of labour. Figure 23.4 shows the dynamic changes taking place in KIBS in the economies
of English cities during the 1990s. It may be seen that the average growth rate in these
sectors in England during the 1990s was 1.27 per cent. Most of the urban economies that
exceeded this rate of growth were located in and around London, particularly to the west
and south of the metropolis. The local economy of Cambridge was also one of the faster
growing areas in the greater south east (GSE). Only four other urban economies outside
the GSE experienced similar rates of growth, albeit from a low initial base in 1991. These
were Telford and Bridgnorth, Derby, Preston and Burnley.
Figure 23.4 shows clear dif erences in the spatial dynamics of change in key sectors
of the information economy. While London and its western arc running from Surrey
through the Thames valley and out to Cambridgeshire were at the forefront of the
developing information economy during the 1990s, the growth trajectories in many of
England's more peripheral cities and those from the midlands to the north east were not
keeping pace with the national shift towards an immaterial knowledge-based economy.
8. Knowledge spillovers, networks and spatial nodes
In the information society, business market links and non-market social networks play
crucial roles in knowledge spillovers and transfers. In principle the spatial evolution of
networks starts in neutral space in which many locations are candidates to be key nodes
in the system (Boschma and Frenken, 2006). But in practice only a few places emerge
over time as central nodes with high levels of connectivity to other hubs. Network evo-
lution can be understood as a continually changing landscape of connectivity between
emerging and existing nodes, depending on the intensity of their interactions and, to
some extent, their geographical distance from each other (Castells, 1996).
Connectivity between nodes tends to be skewed and this contributes to the selection
processes between them. This leads to the development of hierarchical relationships
between them, with a few locations becoming the best connected primary nodes and
others becoming secondary hubs, while most locations develop into less connected
