 KIBS Driving Sustainable Economic Growth: A Comparative Analysis of South Korea and the United States (2010–2020)Yong Jae Shin ()
Sustainability, 2025, vol. 17, issue 7, 1-28 Abstract: This study investigates the economic role and spillover effects of Knowledge-Intensive Business Services (KIBS), one of the key instruments for sustainable economic growth, in South Korea and the United States from 2010 to 2020. KIBS, comprising Technology-Intensive KIBS (T-KIBS) and Professional KIBS (P-KIBS), serve as critical drivers of innovation within organizations and economic systems, fostering long-term economic sustainability. To rigorously assess the economic spillover effects of KIBS in promoting sustainable economic growth, this study examines how its impact varies based on industrial structure, economic scale, and firms’ capacity to leverage KIBS effectively, while also identifying key structural differences across national contexts. The findings reveal that both countries exhibit a similar economic function for KIBS, with T-KIBS categorized as a “primitive final demand type” and P-KIBS as a “primitive intermediate demand type”. However, the economic spillover effects of KIBS were more stable in the U.S., whereas South Korea experienced greater fluctuations. In particular, South Korea’s P-KIBS had a more pronounced impact on the secondary sector, particularly manufacturing. As of 2020, the production-inducing effect of South Korea’s P-KIBS on the manufacturing sector was 39.1%, while its value-added-inducing effect stood at 27.0%, and its supply-shortage effect reached 50.9%. These values exceeded those of P-KIBS in the United States and generally surpassed the economic spillover effects observed for South Korea’s T-KIBS. Furthermore, the inter-industry linkage analysis suggests that KIBS plays a more significant role as a raw material input within the U.S. economic system. In 2020, the forward linkage effect of U.S. T-KIBS was 0.853, while that of U.S. P-KIBS stood at 2.116. These figures were higher than the forward linkage effects recorded for South Korea’s T-KIBS (0.635) and P-KIBS (1.590), underscoring the stronger integration of KIBS into the U.S. industrial structure. Additionally, the supply-shortage effects were more significant than other economic spillover effects in both countries, underscoring KIBS’ critical function as a key production input. These findings underscore the necessity of differentiated policies for fostering and supplying KIBS based on each country’s industrial structure and economic characteristics. Given its pivotal role in economic growth, this study emphasizes the need for a stable supply of KIBS to ensure continued productivity and value creation. Furthermore, this study emphasizes the necessity of fostering innovation within the T-KIBS sector, particularly in research and development, to enhance its contribution to financial and organizational innovation. By developing strategic policies tailored to national economic conditions, countries can maximize the economic benefits Cof KIBS and strengthen their long-term economic sustainability. Keywords: KIBS; T-KIBS; P-KIBS; sustainable economic growth; input–output analysis; exogenous specification (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:gam:jsusta:v:17:y:2025:i:7:p:2974-:d:1621899 Access Statistics for this article Sustainability is currently edited by Ms. Alexandra Wu More articles in Sustainability from MDPI |
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