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    Services are becoming a dominant driver of economic growth, both in developed and developing countries. However, awareness of the services sector's potential is still at a relatively low level. Developing countries are shifting towards services much sooner, than has been the case in the traditional development trajectory. Services can provide an alternative engine of growth, enabling latecomers to development to leapfrog the traditional manufacturing route. Meanwhile, despite strong global growth, services exports continue to make up less than 25% of world exports. The discrepancy between the size of the sector and its importance in exports points to a major untapped potential in services trade. Too few developing countries are taking advantage of new opportunities to specialize in the export of services tasks. Businesses and governments are often not aware of the opportunities or the factors that impact local competitiveness. Other reasons include the limited availability and quality of data.

    The International Trade Centre (ITC) responds to this need by building developing country export competitiveness in services. ITC's  priority focus is to bring world-class services expertise to build services enterprise competitiveness and concrete export going in ITC beneficiary countries. Supporting services exports is far from new to ITC. The focus of earlier ITC work involved a technical assistance programme to promote trade in services through assessing capacity, establishing local champions, training local stakeholders and supporting export promotion, support for GATS negotiations, for tourism promotion, including linkages to cultural and entertainment services and in developing services sector strategies. The new programme builds on prior ITC work and adds new depth. Consistent with the ITC Strategic Plan, the Trade in Services programme’s objectives are:
     

    • Produce and improve access to, and use of, reliable and user-friendly services-related trade intelligence, building awareness around the importance of services as a potential export driver for developing countries, including LDCs;
    • Build and strengthen trade support institutional capacity to foster an enabling business environment, to benchmark regulatory practices and to promote services exports;
    • Enhance the export readiness of services SMEs in responding to market opportunities, including in global and regional value chains; and
    • Achieve, as a cross-cutting objective, a higher level of sustainable and inclusive participation in the regional and international services economy.


    At the enterprise level, ITC provides training modules to help potential exporters understand the factors that add to and detract from competitiveness in their specific sectors, determine local shortcomings and make concerted efforts to improve performance. ITC also offers technical assistance in selected industries because of their rapidly growing importance and strong demand for ITC’s assistance from client countries.

    Initially the strategy will focus on three loose clusters of services industries, namely

    • Tourism (including Health Tourism and backward linkages to local products and services such as Creative and Cultural Services as well as Agrifood Products).
    • Transport/Logistics/Distribution and
    • IT-enabled Business Services (including Information Technology Outsourcing/Business Process Outsourcing/Knowledge Process Outsourcing).

    This initial choice reflects trends in the global export trade data and is also consistent with various demand and needs assessments carried out by ITC.

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    Trade in services in the global economy.jpg   ITC initial services sector focus.jpg ITC trade in services offering.jpg  
     

    Recent event: ITC's participation in the China International Fair for Trade in Services (CIFTIS) 2013

     
    Organized in May 2013, the International Trade Centre’s interactive seminar series on trade in services in CIFTIS highlighted key current issues and development trends of the sector and brought to the attention of business and policy stakeholders. Through the event, ITC collected feedback on how to assist in building services export excellence in developing and emerging economies, leading to growth in the sector.

    Programme and Speakers’ bios
    Speech
    Video
    Photo gallery
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    Information

    ITC is introducing new initiatives to build the export competitiveness of services sectors in developing country from 2013–2015. The programme’s objectives are to improve access to and the use of services-related trade intelligence, build trade support institutions’ capacity to foster an enabling business environment and enhance the export readiness of small- and medium-sized businesses. These goals are aimed at achieving a higher level of sustainable and inclusive participation in the regional and international services economy.

    Country Services Sector Analysis briefs:


    Related articles


    Training modules aimed at enterprises:


    Training modules aimed at support organizations and governments:


    Gender and trade in services:

    Data and research

    While global awareness is still at a relatively low level, the services sector is becoming a dominant driver of economic growth, including in developing countries.
    Click on open to view more information.

    Figure 1: Services as a Source of Growth

    Figure 1 Services as a source of growth
    The services sector accounts for 72 per cent of GDP in high-income countries, 53 per cent in middle-income countries and 46 per cent in low-income countries. World Bank evidence (Figure 2) shows that a stronger correlation exists between services growth and GDP than is the case for manufacturing growth and GDP.

    Figure 2: Services as a Driver of Growth

    Figure 2 Services as a Driver of Growth

    The potential for services-sector contributions to employment is even more striking. On average, services account for more than 74 per cent of employment in high income countries and more than 86 per cent of female employment. While aggregated developing country employment data is difficult to obtain, World Bank research shows the higher the level of employment in the services sector, the higher the female participation rate. A strong correlation also exists between services growth and poverty reduction (Figure 3), chiefly because the services sector generally employs more women (Figure 4).

    Figure 3: Services and Poverty Reduction

    Figure 3 Services and Poverty Reduction

    Figure 4: Female Participation in Services

    Figure 4 Female Participation in Services

    World Bank findings indicate that developing countries are shifting towards services sooner, and at a lower level of per capita income, than has been the case in the traditional development trajectory. This suggests that services could provide an alternative engine of growth, enabling some latecomers to development to leapfrog what has been seen as the traditional route to development through developing manufacturing first. Of particular interest in this regard is that the contribution to growth generated by services exports is especially strong for low-income countries and well above world average (Figure 5).

    Figure 5: Growing Contribution of Services Exports to GDP

    Figure 5 Growing Contribution of Services Exports to GDP

    Meanwhile, despite strong global growth (Figure 6), services exports, as measured by the balance of payments, continue to make up less than 25 per cent of world exports. The difference between the size of the sector and its importance in exports points to a huge, untapped potential in services trade. Developing countries’ share in services exports has doubled over the last two decades; even LDCs now figure among the ranks of the world’s services exporters.

    Figure 6: Growth in Commercial Services Exports 

    Figure 6 Growth in Commercial Services Exports

    Despite the growth potential, however, developing countries’ share in world services exports is still only 30 per cent as too few developing countries are taking advantage of new opportunities to specialize in the export of services tasks. The extent of these opportunities is highlighted by the new WTO/OECD trade in value-added data, which, based on global input/output analysis, shows that when intermediate services tasks are included, services make up nearly half of total global exports (Figure 7).
    Figure 7: Services Share in Global exports

    Figure 7 Services Share in Global exports

    Advisory Services

    ITC focuses on producing and improving access to services related trade intelligence; building and strengthening trade support institutions’ capacities to enable an effective policy framework; and enhancing the export readiness of small- and medium-sized enterprises (SMEs) in services sectors to respond to market opportunities. In order to fulfill these targets, ITC is currently implementing the following activities:
    • Provide handbooks and guides, such as the trade promotion organization (TPO) guide, coalition guide and handbook on quality; services-snapshots business briefs and an eco-system portraits series.
    • Assist with the creation of coalition of services industries (CSI) in South Africa and Indonesia.
    • Develop TPO capacities in promoting trade in services (e.g.: transfer of know-how from the Malaysia External Trade Development Corporation to Uganda Export Promotion Board)

    Network

    ITC works in close partnership with a variety of national, regional and international organizations regarding trade in services. One of ITC’s strengths is its ability to quickly identify and mobilize sectoral and geographical expertise at the internal (regional offices and technical sections) and external (extensive network of national and international consultants) levels. In close partnership with the World Trade Organization (WTO) and the United Nations Conference on Trade and Development (UNCTAD), ITC has enriched results by adding enterprise level experience. The outcomes are rolled out in user-friendly ways to services exporters and trade support institutions.
    ITC is actively building relationships on services trade with a number of organizations, including the Organisation for Economic Co-operation and Development, the Commonwealth Secretariat, World Bank, Asian Development Bank, Inter-American Development Bank, International Finance Corporation, United Nations Industrial Development Organization, International Organization for Standardization, World Intellectual Property Organization and United Nations Educational, Scientific and Cultural Organization. ITC is also in the process of strengthening its relationship with the International Chamber of Commerce and the B20, as well as national and regional chambers of commerce, think tanks, universities, associations and NGOs. Particular attention is given to identifying opportunities for public-private partnerships.

    Events

    Expand this section for more information about recent events relating to trade in services organized by ITC and our partners

    Brainstorming Meeting of the LDC Group in the WTO: Operationalising the LDC Services Waiver

    Geneva,3 - 4 October 2013, World Meteorological Organisation (WMO)
    ITC services experts participate in a brainstorming meeting of the LDC Group in the WTO, discussing current and potential services exports, as well as how to put into effect a services trade waiver for least developed countries, allowing WTO member states to provide preferential treatment to service suppliers from those countries.
    Agenda
    Presentation

    ITC interactive briefing on services

    Geneva, 19 March 2013, International Convention Centre
    The International Trade Centre’s interactive seminar series on trade in services highlights key current issues and development trends in trade in services and brings them to the attention of business and policy stakeholders. The objective of the seminars, part of ITC’s revitalized programme on Trade in Services, is to assist in building services export excellence in developing countries leading to services export growth.
    Programme
    Brochure
    Speech


    ITC at the WTO's 4th Global Review of Aid for Trade

    Aid for Trade, services and global value chains: Opportunities for least developed countries

    Geneva, 9 July 2013, WTO
    The WTO’s Global Review of Aid for Trade has been the preeminent multilateral forum exploring trade and development issues since 2007. Under this year’s theme of ‘Connecting to Value Chains’, the focus is on examining strategies to connect developing countries to international value chains and discussing the associated development benefits in the context of the post-2015 development agenda.

    The aim of this session is to affirm the central role of services in economic development and the potential for growth in services exports from Least Developed Countries (LDCs) by highlighting several successful LDC exporters.
    This event is organized by the Australian Mission and supported by the International Trade Centre, which has prepared a technical paper of case stories on services exporters of Least Developed Countries.
    Program
    In the press
    Technical paper: Least Developed Country Services Exports - Trends and success stories
    Photo gallery


    Workshop: Retailing services: Potential for, and Challenges to, Enhancing SME participation in Supply Chains in APEC

    Surabaya, Indonesia, 10-11 April 2013

    The workshop organized in the context of the Asia-Pacific Economic Cooperation (APEC) Indonesia 2013 aims to increase understanding of the contribution of retail services in supply chains. This sector plays an important role and is one of the largest industries in some economies in terms of income, output share and employment, especially in developing economies in the APEC region. The workshop explores how small and medium-sized enterprises have successfully integrated into the competitive retail sector, making it a solid platform on which to exchange good practices and encourage the sector’s growth and development.

    Program
    List of participants
    Presentations by Jean Drake-Brockman, Senior Services Adviser, ITC:



    Our partners' events: