By Tawanda Chiware
If you mention exports, most people think about products, and they might picture container ships and airplanes.
But the fastest growing exports are services. Increased companies are finding profit in exporting services, and several trends almost guarantee that service export growth will escalate.
What is more is you may already export services without realizing it!
Here are five key things you might not know about the growing world of service exports.
#1: Service Exports Cover a Wide Range of Activities.
If people think of anything when they hear the term “service export,” they might think of construction services, large foreign investment projects, or film stars and production crews on foreign sets.
But there is a whole lot more. In short, any service provided by people from one country to people or companies from another is a service export.
Here are some examples of services that are exported from the Zimbabwe every week:
- Rents paid by a Zimbabwean resident for property owned outside Zimbabwe
- Franchise support
- Architects and engineers designing a project
- Cloud service providers whose platform is used by companies based outside Zimbabwe
- Call centre support provided to users from outside the country
- Remote access to IT systems located outside Zimbabwe.
- A team of consultants or installation experts traveling to a foreign destination to assist with an install or troubleshooting
- Tax advisors providing advice to foreign companies
- Medical personnel who read test results from patients located in another country
- Financial, benefit, HR, IT, and management support provided by a company’s Zimbabwean headquarters for the benefit of the company’s foreign subsidiaries
All of these are considered exports because they are provided by a service provider in Zimbabwe to someone from another country.
No doubt, many companies have already exported services without even knowing it!
#2: Services Are the Fastest Growing Exports Worldwide.
Service are the fastest growing exports about everywhere.
The United States of America is the largest single country services exporter according to the International Trade Commission.
#4: Current Megatrends Guarantee Even More Service Exports.
Some of these trends include:
- The proliferation of cloud-based services, including blue-tooth technologies, wearables, and the Internet based services.
- The continued rapid growth of global e-commerce
- Exploding middle classes in emerging markets will mean more disposable income for products, but also services
- Developing economies with growing populations will require massive infrastructure investments in infrastructure, leading to lots of service opportunities
- Technology developments such as 3-D printing, telemedicine, artificial intelligence, and robotics
Each of these trends and others likely to emerge will drive cross-border services in ways we cannot yet even imagine.
#3: Service Exports Are Seriously Under-Reported.
Although exports of services are growing much faster, no one has yet produced an agreed way to measure and track services exports.
There are no recognized set of “harmonized codes” to categorize services, and so they are categorized inconsistently.
As noted, many companies are exporting services without realizing it or tracking it.
#5: The Trade in Services Agreement Will Make Services Exports Even Easier.
The media is full of discussions about various free trade agreements, but the Trade in Services Agreement (TiSA) is almost never mentioned.
Yet it may have the greatest impact of any trade agreement ever negotiated.
Such an agreement is required with a focus on standardizing regulatory provisions to put service providers in one signatory country on the same footing as any other service provider within the trade zone.
This will have game-changing implications about harmonizing regulations and standards