Explaining the Spatial Pattern of Knowledge Intensive Business Services

There is a widespread discussion regarding the role of information and communication technologies (ICTs) in the era of digital economy. Though, the question how these technologies are related to the economic activities in space, is not answered fully yet. Partially, it is conditioned by the invisible and complex nature of ICTs, which is hard to deconstruct and even harder to explore. What is obvious is that those technologies are not evenly distributed and equally accessible to everyone – not all people, places and businesses benefit equally from the advantages that those technologies generate (Tranos and Mack, 2015). Hence, if those technologies create comparative advantages to places through increasing digital accessibility (Tranos, Reggiani, et al., 2013) the lack of those technologies might cause respective results. The importance of internet’s physical infrastructure is well noted by policy makers. Aiming to foster the network-based knowledge economy and growth in Europe, the Digital Agenda for Europe (DAE) was adopted in 2010 with the specific broadband coverage goals, which is acknowledged as priority at all policy levels of Europe: - Universal broadband coverage by 2013, which was already achieved in 2013 mainly (96.1%) through fixed technologies Universal broadband coverage of speeds at least 30mbps, and penetration of ultra-fast broadband (above 100mbps) in 50% of European households for 2020. These speeds are achieved through Next Generation Access (NGA) coverage (Soldi, Cavallini, et al., 2016, Valdani Vicari & Associati and IHS Inc., 2015, Point Topic, 2012). The developmental role of ICTs at regional level also a subject of interest for researchers. This study tries to determine the comparative importance of broadband coverage (as main part of ICTs) for knowledge intensive business services in European regions. The Knowledge intensive business services are also subject of increasing interest of both, scholars and policy makers intending to foster a knowledge-based economy. The study uses spatial analysis techniques to understand the comparative importance of broadband coverage for knowledge intensive business services. The results suggest that there is no homogeneous impact of internet’s physical infrastructure on KI(B)S – the comparative importance of broadband is different for Eastern, Western, Southern and Northern Europe depending on the region-specific characteristics, such as absorptive capacity of a region. The results of the study also revealed the higher importance of advanced broadband technologies in comparison with the standard ones. It is an important implication for policy makers as well, who might emphasize to improve the NGA technologies coverage at regional level.