Knowledge-intensive business services (KIBS) are professional services that create new added value by creating, accumulating, and disseminating new knowledge. When it comes to conducting business involving new technology, KIBS play the roles of innovator, user, and producer of new technology that has led to technological innovation. This study aimed to determine the role of KIBS as a tool for innovation in a country’s economic system. Specifically, the degree and role of their impact on the Korean economy were analyzed and compared for the entire KIBS sector, T-KIBS (a new technology-based professional service), P-KIBS (a traditional professional service), and every subsector. For this purpose, the demand-inducement model, supply inducement model, and interlinkage effects method were applied using the 2019 input-output table published in 2022.
The analysis showed that the indirect production inducement effect of the entire KIBS industry on other industries was 0.800 KRW, the indirect added value inducement effect was 0.330 KRW, and the supply disruption effect was 1.144 KRW. For T-KIBS, the indirect production inducement effect was 0.687 KRW, the indirect added value inducement effect was 0.272 KRW, and the supply disruption effect was 0.730 KRW. For P-KIBS, the indirect production inducement effect was 1.472 KRW, the indirect added value inducement effect was 0.646 KRW, and the supply disruption effect was 2.657 KRW. Finally, regarding the economic ripple effect of the KIBS subsector, legal and management support services and advertisements corresponding to P-KIBS showed higher figures than the T-KIBS subsectors in all sectors, including production inducement, the added value inducement effect, and the supply disruption effect.
These results revealed that in the South Korean economic system, KIBS contribute to production and value addition across all industrial sectors. It is apparent that the absence of supply significantly disrupts other industries. Furthermore, production inducement effects are evenly distributed among all the KIBS subsectors in the secondary and tertiary sectors, while the value-added effects have a greater impact on the tertiary sector. In terms of the supply shortage effects, the secondary sector experiences a more significant impact. This underscores the crucial role of KIBS in sustaining and enhancing overall economic activity in South Korea.
This study is significant in that it not only investigated KIBS as an industry group using the advantages provided by industry linkage analysis but also examined and compared detailed subsectors, thereby elaborately evaluating the influence relationship between KIBS and other industries. Therefore, the results presented in this study are expected to be useful for fostering the KIBS industrial sector and establishing economic innovation policies using KIBS.