Knowledge intensive business services and long term growth

The goal of this paper is to (re)assess the relationship between knowledge intensive business services (KIBS) and the economic growth. Taking into account various conflicting relationships between KIBS and growth, we build a multi agent-based system involving industrial firms, consumer-services firms, consumers, KIBS firms and a banking system. Our main result is that KIBS can be regarded as an engine for the economic growth and that they operate as a substitute for the material capital accumulation. Nevertheless, material capital accumulation still appears as a significant factor of economic growth.

► We build a multi-agent based model of economic growth. ► The model includes consumer-services and KIBS sectors. ► We find that KIBS can foster economic growth by multiple channels.