GEOGRAPHY OF SERVICES
GROUP MEMBERS
 Le Nguyen Trong Anh
 Le Khanh An
 Pham Ngoc Anh
 Tran Trinh Phuong
November, 2008
Outline
 Patterns & Trajectories
 International trade in services
 Transnational investment patterns
 Export processing zones
 Agglomeration and new business service concentration
PATTERNS
And
TRAJECTORIES
PATTERNS and TRAJECTORIES
The percentage of employment is uneven among
different areas (DCs and LDCs)
PATTERNS and TRAJECTORIES
Changing employment in services as a percentage of total
employment
PATTERNS and TRAJECTORIES
 A significant amount is non-tradable.
Informal economy and level of development
PATTERNS and TRAJECTORIES
The annual percentage growth in services
 Relatively high in LDCs
 Relatively slower in DCs
Average annual percentage growth in service, 2000-04
International Trade
International Trade In services
 2005: World services exports rose 20% of total merchandise and
services.
 Value increased to $2415bill
 Annual growth rate: 10%
International Trade In services
International Trade In services
 Some LDCs: China, South Korean, India, Singapore
And top 5: US, Europe, Germany, France, Japan accounted for
40% world export
The fastest growing services: computer and information(20%);
insurance(17%); financial services( 9.7%)
Transnational Investment
Patterns
Transnational Investment Patters
 Outward FDI in services dominated by US, Europe, Japan
 1980: LCDs began open services sectors to FDI
 2002: services accouted for 2/3 FDI inflow ( ~ $500bill)
 Capturing global FDI is priority of less devoloped countries
Transnational Investment Patters
 FDI has shifted toward services.
 Factor leads to increase in FDI global:
 Non-tradable services delivery
 Countries with more relaxed regulation in services industry
 Co. with International strategies in building and
strengthening their competitive advantages
 Information and technology
EPZS – Export processing zone
EPZS – Export processing zone
 LDCs attempt to attract foreign investment by offering financial
and other incentives.
 Governments use subsidies to stimulate service industries, most
common in tourism, transportation and financial services.
 EPZs are being used to attract investment in export-oriented
services. Most of EPZs are located in LDCs.
EPZS – Export processing zone
Number of countries with EPZs
for services
World
91
Asia and the Pacific
26
Latin America and the Caribbean
26
Africa
20
Central and Eastern Europe
13
Europe Union and other developed
6
countries
EPZS – Export processing zone
 Features of EPZS:
•
•
•
•
•
Strong technology
100% exemption from import duties and sale taxes
Full repatriation of earnings
Preferential customs clearance
Skill workforce
Agglomeration & new Servies
Agglomeration & new Business Servies
 Agglomerate to small centers, the world cities
 High value-added services, skilled labor and tacit forms of
knowledge.
 Low value-added service functions: back offices, call centers
and offshore banks.
 Both types of services are embodied in people and embedded in
local and international contexts, forming complex mixtures of
the local and global. Their locations in space – at the cores and
peripheries of the world economy
Agglomeration & new Business Servies
1. The centralization of high value- added services
 monitoring frequent changes in niche product markets
 keeping abreast of new technologies and government
regulations
 keeping an eye on the competition
 staying attuned to an increasingly complex financial
environment
 initiating or resisting leveraged buy-outs and hostile takeovers
 seeking new investment opportunities, and so forth.
Agglomeration & new Business Servies
2. The decentralization of low value-added services
Back offices
• Back-office tasks involve unskilled or semi-skilled labor, primarily women
• A few of the interfirm linkages associated with headquarters activities
call centers
• places where calls are placed, or received, in high volume for the purpose of
sales, marketing, customer service, telemarketing, technical support or other
specialized business activity
• the workforce consists primarily of low-skilled women, and high turnover rates
are common
 Offshore banking
• The high degree of capital intensity, which combine computers, software,
buildings and an occasional worker to form actor networks that vary from place to
place.
Thank you