Digitalisation of Services: What Does it Imply to Trade and Development?

Abstract

Digital technologies have driven a paradigm shift in how services are supplied and consumed across borders. On the supply side, new data networks, digital tools, and platforms enable services providers to transform the modes of services supply and expand their customer base beyond their national boundaries. Using online marketplace platforms such as Amazon, Alibaba, and eBay, firms of all sizes can reach out to potential customers and suppliers worldwide. Digital tools and platforms also help firms access online resources such as training and government services and attract a wide range of qualified workers with reduced recruitment time and hiring costs. On the demand side, digital technology allows access to more variety and choices of services at lower costs. It also provides convenience as well as customized or personalized services. Consumers may further benefit by getting services quicker due to fewer intermediaries. As digitalisation of services can reduce transaction costs compared to the analogue world, it allows consumers worldwide to have better access to good quality services at a competitive price. International trade in digitally deliverable services (DDS), or services that can be delivered over ICT networks, include ICT services themselves, sales and marketing services, insurance and financial services, professional services, back-office services; research and development (R&D), and education and training services, among others.