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GEOGRAPHY OF SERVICES

GEOGRAPHY OF SERVICES. GROUP MEMBERS. Le Nguyen Trong Anh Le Khanh An Pham Ngoc Anh Tran Trinh Phuong. Outline. Patterns & Trajectories International trade in services Transnational investment patterns Export processing zones Agglomeration and new business service concentration.

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GEOGRAPHY OF SERVICES

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  1. GEOGRAPHY OF SERVICES

  2. GROUP MEMBERS • Le Nguyen Trong Anh • Le Khanh An • Pham Ngoc Anh • Tran Trinh Phuong

  3. Outline • Patterns & Trajectories • International trade in services • Transnational investment patterns • Export processing zones • Agglomeration and new business service concentration

  4. PATTERNS And TRAJECTORIES

  5. PATTERNS and TRAJECTORIES • The percentage of employment is uneven among different areas (DCs and LDCs)

  6. PATTERNS and TRAJECTORIES Changing employment in services as a percentage of total employment

  7. PATTERNS and TRAJECTORIES Informal economy and level of development • A significant amount is non-tradable.

  8. PATTERNS and TRAJECTORIES • The annual percentage growth in services • Relatively high in LDCs • Relatively slower in DCs

  9. Average annual percentage growth in service, 2000-04

  10. International Trade

  11. International Trade In services • 2005: World services exports rose 20% of total merchandise and services. • Value increased to $2415bill • Annual growth rate: 10%

  12. International Trade In services

  13. International Trade In services • Some LDCs: China, South Korean, India, Singapore And top 5: US, Europe, Germany, France, Japan accounted for 40% world export The fastest growing services: computer and information(20%); insurance(17%); financial services( 9.7%)

  14. Transnational Investment Patterns

  15. Transnational Investment Patters • Outward FDI in services dominated by US, Europe, Japan • 1980: LCDs began open services sectors to FDI • 2002: services accouted for 2/3 FDI inflow ( ~ $500bill) • Capturing global FDI is priority of less devoloped countries

  16. Transnational Investment Patters • FDI has shifted toward services. • Factor leads to increase in FDI global: • Non-tradable services delivery • Countries with more relaxed regulation in services industry • Co. with International strategies in building and strengthening their competitive advantages • Information and technology

  17. EPZS – Export processing zone

  18. EPZS – Export processing zone • LDCs attempt to attract foreign investment by offering financial and other incentives. • Governments use subsidies to stimulate service industries, most common in tourism, transportation and financial services. • EPZs are being used to attract investment in export-oriented services. Most of EPZs are located in LDCs.

  19. EPZS – Export processing zone

  20. EPZS – Export processing zone • Features of EPZS: • Strong technology • 100% exemption from import duties and sale taxes • Full repatriation of earnings • Preferential customs clearance • Skill workforce

  21. Agglomeration & new Servies

  22. Agglomeration & new Business Servies • Agglomerate to small centers, the world cities • High value-added services, skilled labor and tacit forms of knowledge.  Low value-added service functions: back offices, call centers and offshore banks.  Both types of services are embodied in people and embedded in local and international contexts, forming complex mixtures of the local and global. Their locations in space – at the cores and peripheries of the world economy

  23. Agglomeration & new Business Servies • The centralization of high value- added services  monitoring frequent changes in niche product markets  keeping abreast of new technologies and government regulations  keeping an eye on the competition  staying attuned to an increasingly complex financial environment  initiating or resisting leveraged buy-outs and hostile takeovers  seeking new investment opportunities, and so forth.

  24. Agglomeration & new Business Servies 2. The decentralization of low value-added services Back offices • Back-office tasks involve unskilled or semi-skilled labor, primarily women • A few of the interfirm linkages associated with headquarters activities call centers • places where calls are placed, or received, in high volume for the purpose of sales, marketing, customer service, telemarketing, technical support or other specialized business activity • the workforce consists primarily of low-skilled women, and high turnover rates are common • Offshore banking • The high degree of capital intensity, which combine computers, software, buildings and an occasional worker to form actor networks that vary from place to place.

  25. Thank you

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