Data-driven services have new export opportunities, highlighted a recent World Bank report.
In essence, not only can entrepreneurs market their products remotely, but intangible data-enabled services now flow across borders.
The rise of data-driven services creates opportunities for new entrants to world trade and can foster economic growth for countries that have traditionally lagged in access to world markets.
For example, according to the World Bank, India’s rising service exports have been associated with increases in per capita income and a decline in the headcount rates of people living in urban and rural poverty.
India‘s digital services industry has also created jobs, especially for women and in smaller cities with populations of around 1 million or less, which can help bridge economic and social inequalities.
The Philippines is another major beneficiary, exporting approximately $ 23 billion in information technology (IT) -enabled services, which is equivalent to nearly half of the country’s commercial merchandise exports and more than double its total agricultural exports.
In Africa, Senegal, a low-income country, has a dynamic digital services sector focused on business services as well as applications and software solutions targeting regional markets.
As another case related to export opportunities, Mauritius has developed a fast-growing external sales-oriented digital business services industry, diversifying its service-focused economy away from the country’s tourism sector.
For the World Bank, such an expansion into digital services has proven important in light of the collapse in tourism brought on by the Covid-19 pandemic.
Studies show that trade in services, particularly IT-enabled business services, is not as prone to sudden crashes as other forms of global trade.