A Segmentation Approach to Understanding Business and Professional Services in City-regions: Shifting the Horizon Beyond Global Cities

In an increasingly globalized world successful economic activity, in both manufacturing and services, is founded upon the exploitation of four sources of competitive advantage — price, quality, design and knowledge/expertise. These are not mutually exclusive (Bryson, Daniels and Rusten 2004). As a result, manufacturing production in developed market economies has fragmented into increasingly smaller components that are outsourced or offshored to increase efficiency, profits, and value (Gage and Lesher, 2005). The manufacturing that remains in the developed market economies must compete by targeting sectors and markets that require client customization, niche manufacturing or fashion-driven fast production. These require significant inputs of knowledge and expertise, whether provided internally or externally by independent firms, and these `changes have redefined the way in which many manufacturing firms use services and interact with service suppliers’ (Gage and Lesher, 2005: 7). Knowledge inputs are also required by service providers, while final consumers utilize the services of a range of knowledge providers, from accountants to image consultants (Bryson and Wellington, 2003). The net rise in importance of knowledge has been accompanied by a dramatic growth of independent business and professional service (BPS) firms that provide intermediate inputs to the production system.