PROXIMITY BETWEEN SERVICE PRODUCERS AND SERVICE USERS

When do service firms - especially producers of informations services - need to locate close to their customers, and when are they free to locate according to other criteria? This question is highlighted by data on interregional trade in services, by questionnaire studies of sales and purchases of services, and by interview studies on the need for proximity to customers and on the consequences for the location of computer services and technological advice. Three types of services are distinguished: (1) Back offices transmit their services via telecommunications and can locate independently of their customers (low rents and wages then are important) (2) Unsophisticated, customized service firms offer frequently used services and must locate close to their customers, both for cost reasons and because mutual knowledge and trust are decisive (3) Highly specialized service firms may locate independently of their customers, because the high value of their services justify any travelling costs connected with meetings (the recruitment of qualified staff then is important).