Business Services. Part 1: Evolution - ARCHIVED

The significance of business services in the economy and their role in fostering competitiveness has attracted considerable attention in recent years. This paper, the first of a two-part series, examines the evolution of business services in Canada over the last three decades. It draws a demographic profile of this group from an industrial and a geographical perspective, and analyzes its size, structure, output and growth, R & D involvement as well as the sources of demand and supply of business service commodities.

The industrial group is made up of a large number of small firms that produce services to be used primarily as intermediate inputs in the production processes of other industries. Business services industries are labour intensive with high value-added and are predominantly located in metropolitan areas. Their growth has outpaced the economy average by a huge margin. Despite the high level of exports, increasing deficits characterize international trade in business service commodities. Business services account for a significant proportion of R & D performed in Canada. They are not immune to economic downturns.