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Thursday, October 30, 2003
Toral: Services exporting strategy
By Janette Toral
Digital Filipino
PLAYERS CLUELESS. I am currently doing a series of one-and-a half-day seminars with the Bureau of Export Trade Promotion on services exporting. It wasn’t easy to attract participants, despite the subsidized cost, because of the lack of understanding on what service exporting means.
Services exporting is about rendering or selling a service to a foreigner regardless of where the transaction takes place. If a foreigner tasked a person or entity in Cebu to do a website or research, that is services exporting.
This type of exporting does not have to take place outside the country. When a foreign tourist avails himself of local hotel, health, education, transportation, telecommunication, travel and restaurant offerings, among others, these are actually considered services exporting transactions.
Filipinos who open a services company in another country or deploy personnel to deliver in-person work are also considered to be doing services exporting.
HIGH GROWTH. By 2020, the World Trade Organization estimates that half of global trade will be in services exporting. Compared to goods exporting, which has an annual growth rate of only seven percent, services exporting has a higher growth rate of nine percent and delivers 45 percent more revenue per person.
Most governments around the world have put great emphasis on goods exporting for the past 30 years. But there is a paradigm shift now to seriously look into services exporting that requires a separate strategy and network altogether.
For this to take place, the government has to educate as many entities as possible about our services exporting potential.
This sector is unique as it is very diverse and fragmented. If the Philippine Exporters Confederation can well represent the goods exporting sector, it may not be considered the authority to represent the services sector.
Most of the players in this sector are inward looking as well. They start their business with the local market in mind and cater to the foreign market only as the opportunity arises.
AWARENESS. Having a services export strategy and information campaign will stimulate awareness and spark an internationalization process among players in the country.
Developing a services exporting strategy will take time. It needs a lot of data gathering among services export players today and segregating of foreign and local revenues.
The information and trade promotion needs of aspiring, potential and experienced services exporter will vary as well.
However, this is one opportunity whose multisectoral impact in the services sector will be high, if developed well.
Services exporting is not just about information and communications technology enabled services like call center, animation, software development and business process outsourcing. It covers 155 sub-sectors waiting to be developed and exported.
Having a national services exporting strategy will allow us to take advantage as well of the General Agreement on Trade in Services (GATS) in the near future.
(Janette Toral welcomes readers’ comments at janette@digitalfilipino.com.)
(October 30, 2003 issue)
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