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Globalization. UPGRADE SHARE

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PREMIUM

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WHY DO THESE
TRENDS REVEAL?
T H E Y R E F L E C T D E V E LO P M E N T
IN CHINA
Resources A N D OT H E R E M E R G I N G
ECONOMIES, WHICH ARE NOW
C O N S U M I N G M O R E O F W H AT
T H E Y P R O D U C E D.

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SERVICES TRADE IS
GROWING 60%FASTER
THAN GOODS TRADE
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Policy focuses on goods on trade
(e.g.,autos, computers, apparel),
but services trade is becoming
increasingly important.

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Background
Gross services Services embedded Intangible Assets Free cross-border
Trade in goods trade Multinantional Companies send
digital services
A conventional measure of the Trade stats do not track soaringb
intangible assets to their a!liates
value of services. Roughly one-third of the value that cross-border flows of free digital
around the world- including
goes into traded manufactured services, including email, real-time
software, branding, design,

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goods comes from services like mapping, video conferencing, and
operational processes, and other IP
R&D, engineering, sales and social media - and these services

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developed in headquarters- and
marketing, finance and HR. undoubtly create value for users but
these represents tremendous but
are not counted in trade statistics.
undercounted value.

LABOR-COST ARBITRAGE READ MORE

HAS BECOME LESS
IMPORTANT
It 's a common
perception that
trade flows are However, only 18% of
driven by goods trade today is
R&D and innovation are becoming companies from low-wage to
increasingly important searching for low- high-wage countries

04 Companies are spending more on R&D and

intangible assets such as brand, software,
operational processes, and other intellectual
cost labor.

Share of goods trade

property.
Low-cost
arbitrage
18% of goods trade
Exports from countries whose
GDP per capita is one-fifth or
less than the importing
country.

access to skilled labor

access to natural
Other factors: resources

82% of goods Proximity to

traded customers

Quality of
infrastructure

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