OECD ITS-TIS

1
How are services being internationalised? And
which ones?

• Bill Cave
• OECD Statistics Directorate

2
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

3
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.

4
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

5
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

6
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

7
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

8
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

9
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

10
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 gt more links to BOP
  (remittances) and employment statistics

11

• Thank you for your attention