Page 17 - THE SOUTH CHINA BUSINESS JOURNAL
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ay provide comprehensive services that handle international trade would bypass America’s
customs clearance procedures and costs for small services sectors. However, this is no longer the
business owners who lack the expertise and time to case. The digital revolution is opening the door
tackle the minutiae of such matters. The evidence to global opportunities for the gigantic U.S.
supports the view that online channels reduce professional and business services sector. This shift
transaction costs associated with international holds great promise for the American middle class.
trade significantly.
It’s critical to understand the size and importance
One takeaway from the paper is that digital trade of America’s professional and business services
allows small business exporters and larger firms to supersector to the U.S. economy writ large. These
prosper together. Some of the services mentioned industries employ 20.8 million Americans, a total
above in areas such as digital advertising (e.g., representing nearly 70% more Americans than
Google’s Market Finder) are fostering new trade those employed in manufacturing. Earnings in
ecosystems of mutual benefit. these industries are 20% higher on average than
those in manufacturing (average hourly earnings
The cumulative effect of these digital technologies of $36 versus $30, according to BLS data).
is that more small business exporters are able to
reach more international markets. The Chamber’s Exactly what sectors are these? Professional and
findings are supported by an earlier study which business services include computer, software and
found that 94% of the smallest 10% of commercial other ICT services; architectural, engineering,
sellers on eBay engage in exporting, not far behind project management, and specialized design
the largest 10% (99%), Only 5% of commercial services; accounting, bookkeeping, auditing,
sellers in that study were single country exporters, and payroll services; legal services; consulting;
with a remarkable 81% selling to five or more research services; advertising; audiovisual and
foreign countries. photographic services; banking, insurance, and
other financial services; travel arrangement and
The Chamber report found that the digital trade reservation services; and waste management. The
revolution nonetheless remains a work in progress United States is home to world-beating firms in all
for U.S. small business exporters While 92% of of these growing industries.
small businesses that export use digital tools, a
large majority flagged ongoing concerns. Small Professional and business services are increasingly
businesses surveyed noted the challenge posed tradeable thanks to digital technologies. According
by foreign regulations such as data localization to a report issued by the U.S. International Trade
requirements, privacy rules, and liability risks, as Commission, 63% of all U.S. services exports now
well as taxes. However, with further progress on have the potential to be delivered to customers
these fronts and further steps to take advantage abroad digitally. Partly as a result, global trade in
of digital trade, the small businesses surveyed services increased twice as fast as merchandise
projected a 14% increase in sales, which would trade (by around 50%) between 2010 and 2019,
increase U.S. economic output by $81 billion and according to a report by Oxford Economics.
add 900,000 jobs.
While the United States is already the world’s
The Opportunity: The U.S. largest exporter of services according to official
Services Sector statistics ($875 billion in 2019), the trade potential
for these services sectors is almost untapped. One
Most U.S. small business exporters are in four U.S. manufacturers exports, but just one
manufacturers or other merchandise exporters, in every 20 providers of business services does so;
but digital trade affords huge opportunities for and just 3% of U.S. services output is exported,
firms in the U.S. services sector as well. according to research by J. Bradford Jensen of the
Peterson Institute for International Economics.
Services dominate the U.S. economy today, but
it was long thought in the 20th Century that All told, these trends are hugely positive news
for the U.S. economy. Millions of highly-
compensated American jobs are already supported
by international services trade, and digital trade
provides exciting prospects for further growth in
overseas sales by firms in these highly competitive
U.S. industries.
SOUTH CHINA BUSINESS JOURNAL 14
customs clearance procedures and costs for small services sectors. However, this is no longer the
business owners who lack the expertise and time to case. The digital revolution is opening the door
tackle the minutiae of such matters. The evidence to global opportunities for the gigantic U.S.
supports the view that online channels reduce professional and business services sector. This shift
transaction costs associated with international holds great promise for the American middle class.
trade significantly.
It’s critical to understand the size and importance
One takeaway from the paper is that digital trade of America’s professional and business services
allows small business exporters and larger firms to supersector to the U.S. economy writ large. These
prosper together. Some of the services mentioned industries employ 20.8 million Americans, a total
above in areas such as digital advertising (e.g., representing nearly 70% more Americans than
Google’s Market Finder) are fostering new trade those employed in manufacturing. Earnings in
ecosystems of mutual benefit. these industries are 20% higher on average than
those in manufacturing (average hourly earnings
The cumulative effect of these digital technologies of $36 versus $30, according to BLS data).
is that more small business exporters are able to
reach more international markets. The Chamber’s Exactly what sectors are these? Professional and
findings are supported by an earlier study which business services include computer, software and
found that 94% of the smallest 10% of commercial other ICT services; architectural, engineering,
sellers on eBay engage in exporting, not far behind project management, and specialized design
the largest 10% (99%), Only 5% of commercial services; accounting, bookkeeping, auditing,
sellers in that study were single country exporters, and payroll services; legal services; consulting;
with a remarkable 81% selling to five or more research services; advertising; audiovisual and
foreign countries. photographic services; banking, insurance, and
other financial services; travel arrangement and
The Chamber report found that the digital trade reservation services; and waste management. The
revolution nonetheless remains a work in progress United States is home to world-beating firms in all
for U.S. small business exporters While 92% of of these growing industries.
small businesses that export use digital tools, a
large majority flagged ongoing concerns. Small Professional and business services are increasingly
businesses surveyed noted the challenge posed tradeable thanks to digital technologies. According
by foreign regulations such as data localization to a report issued by the U.S. International Trade
requirements, privacy rules, and liability risks, as Commission, 63% of all U.S. services exports now
well as taxes. However, with further progress on have the potential to be delivered to customers
these fronts and further steps to take advantage abroad digitally. Partly as a result, global trade in
of digital trade, the small businesses surveyed services increased twice as fast as merchandise
projected a 14% increase in sales, which would trade (by around 50%) between 2010 and 2019,
increase U.S. economic output by $81 billion and according to a report by Oxford Economics.
add 900,000 jobs.
While the United States is already the world’s
The Opportunity: The U.S. largest exporter of services according to official
Services Sector statistics ($875 billion in 2019), the trade potential
for these services sectors is almost untapped. One
Most U.S. small business exporters are in four U.S. manufacturers exports, but just one
manufacturers or other merchandise exporters, in every 20 providers of business services does so;
but digital trade affords huge opportunities for and just 3% of U.S. services output is exported,
firms in the U.S. services sector as well. according to research by J. Bradford Jensen of the
Peterson Institute for International Economics.
Services dominate the U.S. economy today, but
it was long thought in the 20th Century that All told, these trends are hugely positive news
for the U.S. economy. Millions of highly-
compensated American jobs are already supported
by international services trade, and digital trade
provides exciting prospects for further growth in
overseas sales by firms in these highly competitive
U.S. industries.
SOUTH CHINA BUSINESS JOURNAL 14
