Services and Development in the Global South
Services generate more than half of global gross domestic product and more than 60 per cent of all jobs. Trade in services has been growing faster than trade in manufactured goods. This is because services have become increasingly tradable as a result of technology and globalisation dynamics. They no longer have to be consumed at the time and place of their provision. The delivery of services across national borders is marked by greater complexity and variety than the delivery of goods. IT companies offer platforms and programmes across national borders, often without having representation in each target market. Management consultants and other professional services increasingly provide their advice remotely. Firms with a more traditional approach such as banks and insurance companies, meanwhile, have internationalised by opening branches in new markets. They keep certain activities centralised for control and economies of scale.
The growth dynamics of the service sector call exclusively manufacturing-oriented development strategies into question. At the very least, the availability of high-quality intermediary services boosts the productivity of manufacturing firms (Hoekman & Shepherd, 2017). This reflects the decisive role of services, especially advanced business services, in enabling firms to access markets and connecting the various segments of production networks and value chains (Coe et al., 2014). Rodrik and Sandhu (2024) suggest that labour-absorbing services must be a priority for developing countries because the manufacturing sector is increasingly capital-intensive. From a firm perspective, competitiveness and profitability have become closely associated with services or, more correctly, product–service systems because manufactured goods are typically sold along with services such as after-sales support. These embedded services generate more revenues than the initial sale of the product (Yusuf, 2015). An extreme argument is that countries can leapfrog from agricultural societies into service-based economies (Fforde, 2018).
The optimism about tradable services is exemplified by Fernández Stark et al. (2011). They argue that services that are outsourced and offshored by Northern lead firms foster development and, in particular, innovation through enhanced connectivity with global markets, also offering good jobs across the Global South. Others have been more sceptical. India, which is widely regarded as a role model of service-led development, suffers from a huge gap between the successful IT industry and lagging sectors (D’Costa, 2011). Research on the Philippines indicates that service offshoring is prone to low value-adding, routinised tasks, with almost no upgrading over time (Kleibert, 2016). Fintech has expanded access to financial services, but it can also deepen disparities and inequalities, as observed in Latin America (Ioannou & Wójcik, 2022). There is, moreover, a sharp divide between a few jobs in advanced, tradable services and many low-paid, low-skilled non-tradable service jobs (Bhorat et al., 2018; Turok & Visagie, 2019). The platform economy has exacerbated the problem in some respects with the precarisation of labour, even for skilled IT professionals (Anwar & Graham, 2020, 2021).
The purpose of this special issue is to investigate opportunities and drawbacks of service sector development for Southern nations. It is not limited to North–South relations, meaning global outsourcing and offshoring. We are particularly interested in dynamics that originate in the Global South. Papers are welcome that deal with:
- patterns of investment and trade in services across the Global South,
- socio-economic disparities that result from service sector growth,
- business strategies of Southern service providers for expansion into distinct markets,
- relocation of tasks between countries and related production networks/value chains at global and regional levels,
- developmental effects of investment and trade in services, including sustainable development through green finance, and
- the impact of technology on the service sector (artificial intelligence, digitalisation of work, fintech etc.)
- policies that affect investment and trade in services, including regional integration.
Submission Instructions
Abstracts of around 350 words should be sent by email to Sören Scholvin (soren.scholvin@ucn.cl) by 31 May 2025. The abstracts should identify the topic, research question and research methodology.
The submission deadline for full papers is 31 December 2025. All papers will go through the journal’s peer-review process.
Acceptance of the abstract does not imply acceptance of the paper.