Trade and Innovation in Services: Evidence from a Developing Economy

摘要

The literature on innovation and international trade has, until recently, focused almost exclusively on the manufacturing sector. One reason for this is that the bulk of international trade has actually taken place in manufactured products. Another is that technological developments have been traditionally associated with new or improved physical products. The services sector has been relatively neglected as an object of analysis because it was seen as largely untouched by both trade and innovation. This neglect has persisted despite the growing importance of services in the trade of most economies and the growing importance of productivity growth in services for overall economic growth. For example, according to IMF balance-of-payments data, 70 per cent of mid- and high-income economies have seen the share of service exports in total exports expand over the last 30 years. As a consequence, today many developing economies, from Malaysia to Mexico, see services exports and innovation as a potential source of dynamism for their economies and as a way of breaking out of the so-called middle income trap. Is this faith justified?