Globalisation and services-driven economic growth

Abstract

Over the past several decades the weight and the role of services in the global economy have steadily gained importance. Originally, services were primarily seen as a residual category of economic output that could not be attributed to either agriculture or manufacturing. The more or less continuous growth of the sector throughout the twentieth and early stages of the twenty-first century however, has led to a gradual reappraisal (Daniels, 2004; Elfring, 1989). While interest in the role of services in economic transformation goes back to at least halfway the previous century (see for example Clark, 1940; Kuznets, 1957; Stigler, 1956), it has intensified notably from the 1970s onwards, spurred by developments such as the rapid growth of producer services and the heightened recognition of producer services’ role in innovation and competitiveness (Hertog, 2000; OECD, 2000; Wood, 2002a). More recently still, the digitisation and advances in information and communication technologies (ICT) that in combination with services trade liberalisation have allowed for the unbundling and drastic reorganisation of services production have fuelled further debate (Baldwin, 2011; Blinder, 2006; Lambregts et al., 2015). According to the latest estimates, services account for no less than 62.5 per cent of global GDP and about 43 per cent of global employment (CIA Factbook, 2015). Moreover, a wide and rapidly growing variety of services has become tradeable in the past decades, enabling countries across the world, including in the Global South, to bank on services exports as an economic growth strategy (UNCTAD, 2004). Services now feature firmly alongside commodities and manufactured goods in global and regional trade agreements and their potential role in development has started to gain the full attention from academics as well as international development agencies such as the World Bank, UNCTAD, UNESCAP, IMF, ILO, OECD and ADB. Services, in sum, have evolved from a dependent and largely neglected economic category to the world’s largest and arguably most dynamic generator of value added and jobs (ILO, 2015), a major driving force of globalisation (Blinder, 2006, Bryson, 2007; Dossani and Kenney, 2007), and – possibly – the next engine for growth in countries across the Global South (Ghani and O’Connell, 2014; Kleibert, 2015; 2 Lambregts et al., 2015). This naturally makes the world of services an increasingly relevant field of interdisciplinary scholarly enquiry, with a number of issues vying for attention. This book concentrates on the question how the global reorganisation of services production alters the relation between and generates different sets of challenges and opportunities in the Global North and the Global South. It examines and provides empirical accounts of how changes in the geography of service delivery generate new interdependencies between services producing and services consuming regions across the globe; how services help to mitigate the impact of and contribute to recovery from economic crises in the Global North; and how the unbundling and relocation of services production fosters economic development and service sector-driven modernisation processes in new locations in the Global South. The remainder of this introductory chapter further sets the scene, identifies some of the major issues at stake, defines the book’s objective and outlines the rest of the book.