Structural Change and Manufacturing-Kibs Integration : Does it Matter for KIBS' Performance to Fight Deindustrialization?

The current literature shows that the development of Knowledge-Intensive Business Services (KIBS) hinges on high-tech manufacturing. Given the deindustrialization in Western countries and the advance of manufacturing in Asia, this study analyzes how the change in the share of jobs and value-added in manufacturing influences KIBS integration therein. The subsystem approach is employed to assess the effects of deindustrialization on KIBS integration into manufacturing for a sample of countries for the 2000-2014 timeframe. The results show that the rise of China explains the decline in manufacturing and KIBS in Western countries between 2008 and 2014. Overall, European countries and subsystems with greater technological intensity significantly declined. The deterioration of manufacturing negatively affects KIBS, rendering it urgent to reverse this process