The services sector now accounts for over 70% of total employment and value added in OECD economies. It also accounts for almost all employment growth in the OECD area. But despite its growing weight, productivity growth in services has been slow in many OECD countries and the share of the working-age population employed in services remains low in many countries.
Introduction and Synthesis
If policy makers wish to strengthen economic growth and improve the foundations for the future performance of OECD economies, the services sector will need to do better. But strengthening growth performance is not the only challenge; OECD countries are also confronted with the growing globalisation of services and manufacturing and with rapid technological change.
The Service Economy in OECD Countries
Improving the performance of the services sector is important to enhance aggregate economic growth. This is primarily due to the service sector having quantitatively become the most important sector in all OECD economies.
The Impact of Structural Policies on Trade-Related Adjustments and the Shift to Services
Long-term economic performance is closely linked to the capacity of countries to change their economic structure. This chapter examines the policy stances that facilitate labour mobility and remove impediments to service-sector development. The two issues are closely related.
The Economy-Wide Effects of Services Trade Barriers
This chapter examines whether and how the benefits of services trade reform in seven services sectors are passed on to other sectors in the economy. The seven services sectors are: air passenger transport; banking; distribution services; electricity generation; maritime transport; professional services (engineering); and telecommunications.
The Impact of Services Barriers on Effective Rates of Protection in Agriculture and Manufacturing
This chapter seeks to determine how protection of services affects the effective protection of agricultural and manufacturing sectors using the most recent estimates of services barriers in telecommunication, banking, distribution, electricity, professional services, and air and maritime transport in selected developing and transition economies.
Promoting Innovation in Services
Improving innovative capabilities in the service sector is important to boosting overall economic performance. Service-sector firms in general are less likely to innovate than manufacturing firms, but they are becoming more innovative and knowledge-intensive, especially in business and financial intermediation services.
Potential Off-Shoring of ICT-Intensive Occupations
Services are increasingly tradable, mainly as a result of rapid technological advances, in particular in information and communication technologies (ICT), and continuing liberalisation of trade in services.
ICT Use in Services and the Growth of Digital Content Services
ICT-enabled co-ordination and digital delivery of services are major drivers of service-firm innovation, development and performance. Services’ use of e-business and digital delivery is increasing, and some service sectors are leading in buying and selling over the Internet and in more complex and integrated internal ICT applications that focus on customers and market networks to a greater extent than supply-chain and productionorientated applications common in manufacturing.
Case Studies of Successful Companies and Lessons for Public Policy
The success of individual firms can illustrate lessons learned from economy-wide research on how public policy and private company policy affect the development of the services sector.
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