Characteristics of the Factors Affecting the Performance of the Global Business Services Sector in Latvia

Abstract

In Latvia, the global business services sector accounts for 2.3 % of GDP, and its share in total service exports is 8 %, while the turnover of the sector in 2019 was estimated at EUR 400 mln., which indicates that the global business services sector in Latvia is an important component of the national economy. The global business services sector in Latvia has developed relatively recently, so it has not yet been sufficiently assessed and researched. The aim of the research is to describe the factors affecting the development of the global business services sector in Latvia. The research concluded that the global business services sector in Latvia was promoted by such factors as the availability of labour and low labour costs, as well as a relatively favourable business environment. The potential of the global business services sector in Latvia is also characterized by its advantageous geographical location, especially from the perspective of Scandinavian investors (including in terms of cultural similarities), as well as the foreign language skills of potential employees. The establishment of the Association of Business Service Leaders in Latvia (ABSL Latvia) (the only such an association in the Baltic States that defends the interests of this sector) is also an important driver for the development of the sector.