Export of services: a sustainable growth strategy
Increased export of services could kill three birds with one stone: by moving up in the industrial value chain, we can better fund the welfare state, keep people employed, and finally transform and grow a more sustainable economy by decoupling growth from CO2, writes Professor Tor W. Andreassen.
The topic is not new. In 2015, the Minister of foreign affairs, Mr. Børge Brende (H), argued in a newspaper article (DN: An agreement can provide growth in export) why the Government had signed an agreement for increased export of services – Tisa (Trade in Services Agreement).
Seven years later, the Minister of Industry, Mr., Christian Vestre (Ap) launches an audacious goal: an increase of 50% in the export of non-traditional exports by 2030. Mr. Brende’s and Mr. Vestres’ initiatives must be seen together. Export of services may be the common denominator.
Services are activities, while goods are things, i.e., objects. Goods are something you have, while services are something you do (to body, mind, or things). Today, 80% of Norway’s GDP is services.
Increased export of services could kill three birds with one stone: by moving up in the industrial value chain, we can better fund the welfare state, keep people employed, and finally transform and grow a more sustainable economy by decoupling growth from CO2.
Roughly speaking, services constitute about 30% of GDP in low-income countries, about 50% in medium-income countries, and close to 70% in high-income countries. Most services are market-based and increasingly across-boarders. Despite these encouraging facts, the export of services is still only 20% of the total world trade. In other words, there is a huge potential for further growth.
Profitable and sustainable growth in the export of services is unchartered waters for policymakers and leaders in the private and public sectors. Consequently, we must haste carefully.
Any initiative to promote sustainable and profitable growth in the export of services must ensure that key design and implementation decisions are science and evidence-based.
To facilitate this, the DIG-center at NHH has launched a new research project: “Digital Innovation and sustainable growth in export of services” (DIG-x).
DIG-x’s goal is to support leaders and policymakers with scientific evidence that better reflects value creation and the performance of a service economy and improve the impact of measures on the micro and macro level promoting the export of services.
An eight-member task force - Abelia, Virke, and researchers from DIG - will support the Government’s initiative.
DIG-x mandate is fourfold:
- First, document the known (un)knowns or facts of service export by collecting and presenting existing data from industry reports and agents like SSB, EU, and OECD.
- Second, perform a literature review to document the contemporary research’s knowledge base related to service export.
- Third, from this knowledge base, develop a research agenda to be presented to the Research Council of Norway (NFR),
- Finally, identify three to four service industries with growth potential.