The politics of services globalization

The politics of services globalization published by Ovum, Ltd. in May, 2008. This report consists of 12 Pages and the price starts from US $ 1100.

Introduction

The US periodically goes through flare-ups of protectionism. While wiser heads typically prevail in controlling the flames, we are now going into a new cycle that has the potential to become a major inferno. The reason: the US is about to enter something of a perfect protectionist storm, embarking on a recession at the same time that foreign trade and balance of payment deficits (especially with China) are high, in the midst of what is likely to be a close election campaign between a Republican “free trader” and a Democratic “fair trader.”

With heated debates and a Democrat-controlled Congress almost inevitable, protectionist fervor is almost certain to ignite. We hope the focus will continue to be on traditional hot spots such as manufacturing, agricultural goods, or possibly foreign acquisition of US assets. With luck, it will bypass the really critical issue of services globalization until after the election, when we have a slightly better chance of entering into a rational discussion of the real issues rather than a bout of competing, populist sound bites.

Key messages

• The US is already a services economy
• Global services competition is moving rapidly up the value chain
• Do you want the good news or the bad?
• The need for solutions rather than reactions

Protectionist sparks

Small and sweeping issues drive fears

The downside of public attention

Election + recession = a volatile mix

A shifting economic profile

• Agriculture and manufacturing' s waning role
• Concerns about offshoring center on lower-skilled jobs

Moving up the services value chain

• Stage is being set for offshoring of high-skilled jobs
• A growing trend to offshore R&D

Implications for US and developed country policies

Challenging demographic and education trends

Offshoring as precursor to automation

Following in the paths of agriculture and manufacturing

Of national priorities and political will

Offshoring just one of many pressing challenges

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