PDF: 2962 pages, 5.2 MB - Bay Area Council Economic Institute

Global Reach
At the same time, India’s National Association of Software and Service Companies (NASSCOM)
forecasts sales of Indian IT services, business process outsourcing (BPO), and software—India’s
leading value-added export category—at $47 billion in 2008–09, up 16–17% from the previous
year and nearly double the $24 billion in sales seen in FY2006. Current estimates represent a
downward revision from earlier forecasts, due to the economic downturn. The U.S. has typically
accounted for about two-thirds of India’s IT, BPO and software exports.
A November 2006 working paper by UC Berkeley’s Fisher Center for Real Estate & Urban
Economics, points out significant opportunities for California services exports—notably by
small and mid-sized businesses—to China and India. The Fisher Center estimates that California
accounts for as much as 20% of total U.S. services exports ($551.6 billion in 2008). Leading
services exports include travel and tourism, royalty and licensing fees, education, film and tape
rentals, and R&D testing.
While both China and India are well down the list of top U.S. trading partners with respect to
services (behind the UK, Canada, Japan and Germany, among others), data on unaffiliated
trade—excluding investment-related intercompany transfers—indicate that the U.S. enjoys a sizable
services trade surplus with both of those countries. In 2004, for example, services accounted
for 47% of U.S. exports to India and 15% of imports. Similarly, services made up 18% of exports
to China versus 3% of imports.
The Center identified export opportunities in a number of specific sectors where California
has strength:
Education and professional training
Energy and environmental services
Technical, engineering and scientific services
Real estate services
Architecture and design
Logistics
Software and IT services
Finance, banking and insurance
Legal services
Travel and tourism
Small and mid-sized companies face a range of obstacles—pricing issues, capitalization, the need
to modify products for foreign markets, and legal and regulatory challenges—but the Fisher Center
working paper sees potential for growth by leveraging U.S. and foreign government support;
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