The Role of Business-Service Offices in the Economy of Medium-Sized Cities

Abstract

In the Netherlands over the last fifteen years business-service activities have decentralized towards the intermediate provinces and the regions around the large cities in the west. A survey, based on postal questionnaires, was conducted to analyze this sector in thirteen medium-sized cities in the intermediate provinces. Work in this paper centers on the role of the business-service offices in the urban economy. From Pred's information-circulation theory it is argued that this role can be demonstrated by the following measures: the amount of local inputs, the degree of external control, the size of regional exports, and the size of the business-service sector (both in terms of employment and establishments). It is demonstrated that business services are not so reliant on a local market and on the manufacturing sector as has been assumed formerly. However, there are differences between the different types of offices. In a consideration of the role of business services in the economy of medium-sized cities it is shown that there are important variations between the cities studied. Initial advantages, the region in which the city is situated, planning policies, and the nature of the market are some factors accounting for the variations. Given the strong degree of regional export orientation, the intermediate function of business services and their recent and possible future growth, these results suggest that regional and urban policies, which in the Netherlands concentrate on stimulating indigenous development opportunities in the cities and regions themselves, need to reexamine the role of business services in the economy.