Growth challenges for the business services industry - international comparison and policy issues

This report summarises the findings of a study on the growth factors and growth prospects of the business services (BS)industry, applying an internationally comparative perspective. The report untangles factors behind the extraordinary growth of the BS industry during last decade,comparing it with other market industries.It analyses how the growth pattern is affected by product differentiation and the structure of competition.The study analyses the role of business services in inter-industry relations and in national innovation systems. The study also analyses the factors behind this industry's poor productivity growth. A scenario analysis is applied to sketch future growth patterns of business services industry up to 2010. The report finally identifies future-oriented policy issues,after identifying the dominant market failure problems with regard to the BS industry.