Regions on course for the fourth industrial revolution: the role of a strong indigenous T-KIBS sector

This study gives evidence of the importance that the regional configuration of the heterogeneous nature of the KIBS sector has for the disruptive economic and productive transformation of local industrial sectors in the context of the fourth industrial revolution. From the perspective that a region’s industrial development mostly builds upon existing local capability endowments to form a trajectory of related diversifications, we argue that regions with a strong T-KIBS sector potentially have resource-based relatedness in their ‘knowledge space’ allowing their local manufacturing sector to more easily diversify production towards industry 4.0. The study assays whether the internal configuration of the local KIBS sector contributes to the economic outcome of local industry (GVA per worker). To do so we employ spatial econometrics models on a multiple sourced database that includes regional information for 24 EU countries. The main findings indicate that the local presence of Technology-based KIBS firms pays-off for the economic performance of regional industry.