Location and knowledge interaction between head office and KIBS in city areas

The literature argues for a mutual dependency between head office location and the location of KIBS (knowledge-intensive business services) in major cities or capital regions. The locations of KIBS are presumed to be intimately connected to the agglomeration of corporate head offices, and they are often thought of as forming a joint head-office-corporate-service complex. However, less has been said in the literature about the actual importance of this co-location of head offices and KIBS. How important is co-location for head offices and how important is it for KIBS, why is it important, and does co-location affect the potential for knowledge sharing and learning between the actors (e.g., organizational innovations)? Is geographical proximity a precondition for successful consultancy? By 'unpacking' characteristics of the interaction between head offices and KIBS, with special attention to the significance of proximity between the actors, this paper elaborate these questions. Our discussion is based on empirical data from a survey of the head offices of the 198 largest firms in Norway, intensive case studies of 21 of these head offices, a survey of 600 KIBS firms, and intensive case studies of 13 of these firms.