The globalization of services (especially knowledge-intensive services) not only involves the geographical extension of services economic activity across borders, but also is an intrinsic part of wider processes of change in the international organization of production and division of labor. Liberalization and the application of new information and communication technologies have transformed services, not simply improving their growth processes or increasing their trade, but altering how industrial activities are conducted, integrating services and goods, and contributing to the unbundling of services activities.
This chapter discusses the many factors involved in the globalization of services. The first two sections explore the particular modes (and barriers) of international “trade” in services. The following section examines the characteristics of services multinationals. The next section explores the role of services in globalization and international division of labor. The chapter then turns to knowledge-intensive services, defining knowledge intensity and knowledge-intensive business services, and the particular issues associated with the internationalization of knowledge-intensive business services (KIBS), including their outsourcing and offshoring.
Liberalization and International “Trade” in Services
Internationalization of services is encountered by many of us on ...