Prospects for Developing Country Exports of Services to the Year 2010: Projections and Public Policy Implications

Abstract

Internationalization of services has gained a great momentum in recent years. This article examines the prospects for developing countries in the international marketing of services. It analyzes past trends of service exports of developing countries and projects these to the year 2010. The projection was based on dynamic shift share analysis. The results show that the market share of developing countries will increase steadily up to the year 2010 in travel, financial, and communications services but will tend to decrease in transport services. A major policy implication of these findings is that developing countries need to change their priorities—from exports of primary commodities and soft manufactures to those of services—if they are to compete effectively in the international market and thrive economically in the twenty-first century. Specific policy initiatives that are required to achieve this goal are discussed.