International Economics Commons^™

As in most OECD countries, the business services industry in the Netherlands has grown much faster than the market sector as a whole. It has, however, displayed stagnating productivity growth, in some periods even a fall in productivity. Does this fast-growing industry with a bad productivity record present a threat to aggregate productivity growth and, hence, to future economic growth? Reviewing existing empirical evidence, the paper argues that this concern need not be valid. The business services industry has an important role in the national innovation system and in knowledge spillovers to other industries. The innovation contribution of business services …