Knowledge-Intensive Business Services and the Innovativeness of Manufacturing Companies in the European Union

The aim of this article is to examine the innovation performance of manufacturing companies across the European Union and their use of knowledge-intensive business services (KIBS) as measured by the number of patent applications. Methodology of this research concentrates on the use of comparative analysis and the rank correlation. The study is based on data from the World Input-Output Database (WIOD) and Eurostat. It covers EU countries in the 1995–2012 period. The study results show that manufacturing companies in EU15 countries were more intensive and more innovative in terms of KIBS in the study period than manufacturing companies in EU12 countries. There is a positive, statistically significant correlation between KIBS intensity in both the broad and narrow sense and the number of patent applications filed by manufacturing companies. A stronger correlation occurred with respect to KIBS in the narrow sense and in more technologically advanced sectors. The findings of the study have potential implications for innovation policy, which is currently focused on supporting R&D activities. The study shows that, in order to strengthen the innovativeness of manufacturing companies, it is necessary to support not only R&D activities but also the development of KIBS companies and the innovation systems they help create.