International Trade in Services.pdf - DSpace at Khazar University

Engineering Services: How to Compete in the Most Global of the Professions 295
markets, improving access to finance, promoting quality education and training
in engineering, adopting an offensive (rather than defensive) trade strategy, and
using trade negotiations to advance the interest in engineering exports. Then the
role of engineers and professional bodies are considered, with special attention to
designing business strategies to reinforce competitiveness, strengthening professional
standards, meeting international standards, and promoting professional
qualifications. The final section concludes by setting out the questions that stakeholders
should bear in mind as they advance reforms. Tables are presented that
identify initiatives to build trade capacity in engineering services by recognizing
the dynamics in the marketplace and the common restrictions that affect the trade
in engineering services.
What Is the Situation of and What Are the
Prospects for Trade in Engineering Services
Global spending on engineering services constitutes roughly 2 percent of world
income, and companies in developed countries are moving an increasing share of
the supply of these knowledge-intensive services to developing countries. While
labor costs remain an important motivation for this trade, access to local skills
and markets is often driving the decisions by multinationals. It is estimated
that the sector will grow by 2.4 percent on average until 2020 and create millions
of high-income jobs in developing countries, many of which will be linked
to exports. Of the industry’s estimated US$1 trillion turnover in 2020, some
14–20 percent may be provided by emerging markets. This implies that the international
supply by companies based in developing countries would double
roughly every four years until 2020 (Booz Allen Hamilton 2006).
National trade statistics on engineering services are limited at best. Table 9.1
presents data on trade in architectural, engineering, and other technical services
in 2006 for a number of markets. This broad category includes some services that
are not covered in common definitions of engineering services, and our numbers
here should therefore be interpreted with caution. The data reveal that emerging
markets such as those of Brazil, India, the Republic of Korea, the Russian Federation,
and Singapore are large exporters and that these countries, plus Kazakhstan,
are also major importers. China would have been included among the top traders
if data were available, and so would several Persian Gulf countries.
Rapid economic growth in countries such as China and India and in regions
such as the Gulf and, until recently, Eastern Europe has led to greater demand for
infrastructure. Aging infrastructure in developed economies also generates much
demand for engineering services (Holloway 2007). The construction boom in the
Middle East, particularly in resource-rich countries, has attracted plenty of