4.4 Services That Predominantly Serve Final Demand Are Less Exported

FIGURE 4.4 Services That Predominantly Serve Final Demand Are Less Exported

Shares of final demand and exports in total output of selected services subsectors, by group, 2014

Share of total output (%) 100 90 80 70 60 50 40 30 20 10 0

Health

Education RetailOther servicesAccommodationand food WholesaleTransportation ICT FinanceProfessional, scientific, technical Skill-intensive social servicesa Low-skill domesticb Low-skill tradablesc Global innovatorsd

Export share Final demand share

Source: Calculations based on World Input-Output Database. Note: The dataset covers 40 countries—primarily high-income countries, but also large low- and middle-income countries (LMICs) such as Brazil, China, India, Indonesia, the Republic of Korea, Mexico, and Turkey, as well as several smaller European LMICs such as Bulgaria, Croatia, and Romania. The dataset covers all regions except the Middle East and North Africa and Sub-Saharan Africa. Final demand comprises consumption, investment, and (net) exports. ICT = information and communication technology. a. Skill-intensive social services employ a relatively low share of low-skilled workers in services such as health and education. Although less traded internationally than other subsector groups, they can be exported through such means as foreign direct investment (FDI), enrollment of foreign students, and “medical tourism.” b. Low-skill domestic services employ mostly low-skilled workers (those with only primary education or less). With some exceptions, they have few linkages to other sectors and are less tradable internationally than other subsector groups. “Other services” refers to administrative and support services; arts, entertainment, and recreation services; and other social, community, and personal services. c. Low-skill tradable services employ mostly low-skilled workers and are considered tradable in international markets. Some (such as transportation and warehousing) are relatively capital intensive, have linkages to other sectors, and may be amenable to offshoring. d. Global innovator services employ mostly high-skilled workers (those with postsecondary education or more) and are highly traded in international markets. Collectively, they have the greatest linkages with other sectors and are particularly amenable to offshoring. Some are relatively capital intensive and also characterized by high research and development (R&D) intensity.

China; Ireland; Italy; Japan; the Netherlands, Singapore, Spain, Switzerland, the United Kingdom, and the United States.1

The share of exports from high-income countries across global innovator services remained high between 2005 and 2017, albeit declining over time. Their share of global exports of financial services was as high as 95 percent in 2005 but declined to 89 percent in 2017. Similarly, high-income countries exported 94 percent of ICT services globally in 2005, a share that declined to 86 percent in 2017. They also exported 90 percent of