Environment and Planning A 1994, volume 26, pages 95-106 Business service use by manufacturing firms in Mid Wales D M W N Hitchens Department of Economics, The Queen's University, Belfast P N O'Farrell Department of Economics, Heriot-Watt University, Edinburgh C Conway Department of Economics, The Queen's University, Belfast Received 18 December 1992; in revised form 17 June 1993 Abstract. The use of business services by small and medium-sized independent manufacturing firms located in the Mid Wales region is quantified. A cross section of services which provide clients with strategic information and expertise is focused upon; for example, training, market research, and product design. The main concern is with constraints upon the use of services arising from the location. Internal and external provision of services is examined. The source of supply of external services and the use of grant-aided services and services supplied by the Development Board for Rural Wales are considered. Difficulties arising from gaps in service availability or quality are reported. The level of use of external services by matched manufac- turing firms within close proximity to a regional concentration of business services in peripheral Northern Ireland is contrasted. Introduction A major issue in peripheral regional economics, especially for small and medium- sized firms, is the range, quality, and price competitiveness of the local supply infrastructure of producer services (O'Farrell and Hitchens, 1990a). Indeed research at the urban, regional, and national level indicates that producer services play an important role in facilitating industrial development (Bailly et al, 1987; Beyers and Alvine, 1985; Ley and Hutton, 1987). They play a strategic role in achieving competitiveness by affecting adjustment in response to changing economic conditions; products, processes, skills, and organisational and managerial change (Gillis, 1987). Hence, the inequality of the supply of services may affect performance (Daniels, 1985; Goddard, 1978; Marshall, 1982). Business services are very unevenly distributed within Britain. Every region outside the South East has less business service employment than would be expected from its share of all employment in manufacturing and services (Daniels, 1986; Gillespie and Green, 1987; Keeble et al, 1991). Specialist business services are poorly represented in peripheral regions and thus such areas are lacking in crucial information and skills (Goddard, 1980; James, 1978). This may be more significant for small manufacturing firms which obtain proportionately more services locally (Marshall, 1982). However, developments in telecommunications and trans- port relax the constraint of proximity between service suppliers and users (Daniels and Thrift, 1986; Goddard and Gillespie, 1986; Illeris, 1989). The problems arising from gaps and deficiencies in regional producer services and the implications for manufacturing competitiveness are considered in detail by O'Farrell and Hitchens (1990b).