GEOGRAPHY OF SERVICES

GROUP MEMBERS  Le Nguyen Trong Anh  Le Khanh An  Pham Ngoc Anh  Tran Trinh Phuong November,

Outline  Patterns & Trajectories  International trade in services  Transnational investment patterns  Export processing zones  Agglomeration and new business service concentration

PATTERNS And TRAJECTORIES

PATTERNS and TRAJECTORIES  The percentage of employment is uneven among different areas (DCs and LDCs)

Changing employment in services as a percentage of total employment PATTERNS and TRAJECTORIES

 A significant amount is non-tradable. Informal economy and level of development PATTERNS and TRAJECTORIES

 The annual percentage growth in services  Relatively high in LDCs  Relatively slower in DCs PATTERNS and TRAJECTORIES

Average annual percentage growth in service,

International Trade

 2005: World services exports rose 20% of total merchandise and services.  Value increased to $2415bill  Annual growth rate: 10% International Trade In services

 Some LDCs: China, South Korean, India, Singapore And top 5: US, Europe, Germany, France, Japan accounted for 40% world export The fastest growing services: computer and information(20%); insurance(17%); financial services( 9.7%) International Trade In services

Transnational Investment Patterns

 Outward FDI in services dominated by US, Europe, Japan  1980: LCDs began open services sectors to FDI  2002: services accouted for 2/3 FDI inflow ( ~ $500bill)  Capturing global FDI is priority of less devoloped countries Transnational Investment Patters

 FDI has shifted toward services.  Factor leads to increase in FDI global: Non-tradable services delivery Countries with more relaxed regulation in services industry Co. with International strategies in building and strengthening their competitive advantages Information and technology Transnational Investment Patters

EPZS – Export processing zone

 LDCs attempt to attract foreign investment by offering financial and other incentives.  Governments use subsidies to stimulate service industries, most common in tourism, transportation and financial services.  EPZs are being used to attract investment in export-oriented services. Most of EPZs are located in LDCs. EPZS – Export processing zone

Number of countries with EPZs for services World91 Asia and the Pacific26 Latin America and the Caribbean26 Africa20 Central and Eastern Europe13 Europe Union and other developed countries 6 EPZS – Export processing zone

 Features of EPZS: Strong technology 100% exemption from import duties and sale taxes Full repatriation of earnings Preferential customs clearance Skill workforce EPZS – Export processing zone

Agglomeration & new Servies

 Agglomerate to small centers, the world cities  High value-added services, skilled labor and tacit forms of knowledge.  Low value-added service functions: back offices, call centers and offshore banks.  Both types of services are embodied in people and embedded in local and international contexts, forming complex mixtures of the local and global. Their locations in space – at the cores and peripheries of the world economy Agglomeration & new Business Servies

1.The centralization of high value- added services  monitoring frequent changes in niche product markets  keeping abreast of new technologies and government regulations  keeping an eye on the competition  staying attuned to an increasingly complex financial environment  initiating or resisting leveraged buy-outs and hostile takeovers  seeking new investment opportunities, and so forth. Agglomeration & new Business Servies

2. The decentralization of low value-added services  Back offices Back-office tasks involve unskilled or semi-skilled labor, primarily women A few of the interfirm linkages associated with headquarters activities  call centers places where calls are placed, or received, in high volume for the purpose of sales, marketing, customer service, telemarketing, technical support or other specialized business activity the workforce consists primarily of low-skilled women, and high turnover rates are common  Offshore banking The high degree of capital intensity, which combine computers, software, buildings and an occasional worker to form actor networks that vary from place to place. Agglomeration & new Business Servies

Thank you