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Latin America's Emergence in Global Services

A New Driver of Structural Change in the Region?

image of Latin America's Emergence in Global Services
Business services have been one of the fastest growing export areas in emerging economies over the past decade. The spread of information and communication technologies and the rise in trade liberalization have facilitated the global unbundling and offshoring of services activities from advanced to developing countries, including those in Latin America. The empirical and analytical insights in this volume document how several countries in Latin America have entered the offshore services sector both through the attraction of multinational companies and the internationalization of domestic service suppliers. The future of the offshore services sector in Latin America will depend on its ability to upgrade its knowledge - and skill-intensive product offerings. This will call for the development of domestic technical capabilities, the adoption of renewed industrial policies, the promotion of backward and forward linkages, and the continued upgrading of human capital and information technology-integrated manufacturing.

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Introduction

The twenty-first century offers developing countries the opportunity to participate in the knowledge economy, a privilege previously reserved primarily for developed nations. The information and communications technology (ICT) revolution, which lowered the cost of computing and logistics, and the liberalization of trade and investment in goods and services, have transformed the way companies do business by allowing for the fragmentation of production and consumption. This process has triggered structural changes in the global economy. Moreover, these trends permit emerging nations to contribute significantly to the growth of the world’s services sector for the first time (Gereffi and Fernandez-Stark, 2010a).

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