Statement from the Market
Opportunities for Services

Summary

"Issues related to temporary business travel continue to need to be addressed, as this travel is needed to support the web sites; High Tech, High Touch." Dorothy Riddle, Service-Growth Consultants Inc. "Brain drain from developing countries is nothing more than a service export."

Femi Boyede, Koinonia Ventures Limited 

Summary

Developing countries have some natural service sector advantages, but in other areas they have severe problems.

A recent example of an advantage used: a small insurance company in the US has outsourced all document processing to India, at a rate of 1/20th to 1/40th of previous costs. How did this happen? A concentrated effort on behalf of the government of India to develop and promote a national strategy for the export of services.

Disadvantages faced by many developing countries - and some solutions:

• Technological infrastructure. 'Incubator parks' with access to satellite up-links can increase businesses' connectivity; in-place technologies, such as cable television, may be considered for use to provide the 'last mile' connection to the consumer; governments can 'fast-track' infrastructure development.
• High costs of services exporting. Governments can promote exports by helping to lower costs (such as high rates of taxation) by creating tax free zones for imports and exports, and zero tax on corporate income.
• Visibility of services exports. It is nearly impossible to statistically measure the extent of service exports, and thus put appropriate policies in place.
• Credibility of firms from developing countries. Using portals or e-marketplaces may assist the reputation of firms.

(Reporting: Ian Worrell, ITC)