How are services being
internationalised? And which
ones?
Bill Cave
OECD Statistics Directorate
OECD ITS-TIS
September 2006
1 1
Overview

Internationalisation of services?

A number of strands of OECD statistical and
analytical work are relevant

FDI, Trade in services, Globalisation indicators

Also Information Society and Migration

What evidence is there?

Conclusions and future needs
Conceptual work

OECD Benchmark Definition of FDI (with IMF and
others)

Manual on Statistics of International Trade in
Services (an Interagency joint work)

OECD Handbook on Economic Globalisation
Indicators

Other OECD work: ICT, e-commerce definitions, and
Guide to measuring the Information Society.
General perceptions about trade in services

Barriers to trade in services
–
–
–
–

‘Not tradeable’ by definition
Physical proximity or link
Language, culture
Many regulatory barriers
Services that facilitate goods trade
– Freight transport, logistics
– Insurance, export credit services
– Wholesale distribution




Business services follow multinationals
Internet, telecommunications, IT services allow more remote
delivery
Increasing movement of people
Worldwide information – International TV, Newspapers,
Magazines, Search engines
OECD ITS-TIS
September 2006
4 4
Evidence?
1 FDI data

Increase in services proportion of FDI flows

Led by financial services, RE and business services,
transport and communication services.

Evidence partly distorted by SPEs

Definition of services in terms of ISIC sections E to P
Evidence?
2 International trade in services




Resident-nonresident trade only 20% of total trade
and stable
Research confirms distance more important for
services
Transport and travel still 50% of services trade 2004
Fastest growing services (nominal values):
–
–
–
–

Computer and information services
Insurance and financial services
Royalties and license fees
Other business services
Services defined by BPM5 classification
Evidence?
3 FATS





New data source: statistics are patchy, difficult to
aggregate
More service sales through foreign affiliates than
cross-border trade
Foreign affiliates more likely to sell locally services
than goods
For sales: wholesale biggest, followed by financial,
RE & business services, transport & communication
Services defined by ISIC sections G to P
OECD ITS-TIS
September 2006
7 7
Other evidence?






ICT sector is highly and increasingly globalised
Increasing range of services can be delivered remotely –
offshoring
Statistical puzzle related to India/China exports of services and
OECD imports
Migration – increasing inflows of foreign born into OECD
countries
Plans to collect more data on migrants e.g. occupation, age,
gender, education, year of arrival, sector of activity
Private sector sources on multinationals – useful background
difficult to square with official data
Conclusions




Official data provide useful but limited insights into
internationalisation
Most internationalised appear to be wholesale
financial/insurance, IT services, freight transport and
couriers.
Services that can be delivered digitally are
increasingly internationalised
Distance, culture, language and regulatory barriers
are important factors
Suggestions for future work

Difficult to analyse FDI,TIS, FATS and Enterprise
statistics in same framework

More cooperative work on definitions, linking data sets

Multinationals have to be looked at internationally as
well as nationally

Measure trade based on economic control v trade
based on residency (connected to modes of supply)

Economic impact of migration => more links to BOP
(remittances) and employment statistics
OECD ITS-TIS
September 2006
10 10
Thank you for your attention