Cambridge Centre for Business Research Professional Services Firms Dataset, 1990-1997

The theories which have sought to explain the phenomena of agglomeration and deglomeration of firms have focused mostly on manufacturing industries and are dominated by manufacturing paradigms. Many of the factors cited in these theories to derive agglomeration may not be applicable to professional business service (PBS) industries (such as internal and external economies of scale, disintegration, flexible specialisation). Yet, geographic clusters of firms, especially small and medium sized enterprises (SMEs) competing in the same industry, exist also in PBS industries to which existing theory provides only limited explanation. <br> The location of PBS firms has attracted the attention of economic geographers, who have also sought explanations for the concentration of these firms in particular locations. The main reason cited to explain this phenomenon is demand driven, that is, PBS firms locate themselves in proximity to their clients. This explanation seems to be limited and does not acknowledge a range of both demand and supply factors which may affect this pattern of geographical concentration.<br> This research seeks explanations for two apparently contradictory phenomena related to the location of PBS firms. The first is the existence of geographical clusters of PBS SMEs in large metropolitan centres such as London. The second is the deglomeration of PBS SMEs, to the extent that these have been locating since the 1970s in smaller towns and even rural areas of England away from the main geographical clusters. The research is designed to acknowledge the unique characteristics of these industries (such as short value added chains typically implemented by a single production unit, limited potential for economies of scale in production, competitive advantage based on embodied expertise), which distinguish them from both manufacturing and other service industries, and which may explain both the geographical clusters of some firms in these industries and the de-concentration of others.