News Releases and Op-Eds
Finlayson: Exportable services an important source of job growth for BC
More than three-quarters of all employed people in British Columbia are engaged in producing “services” rather than “goods.” Services span a wide array of industry sectors, everything from retail and wholesale trade to professional services (engineering, law, accounting, architecture, etc.), scientific and technical services, transportation, financial services, accommodation and food services as well as services that are mainly delivered and/or largely funded by governments (public administration, education, and health and social services). Many of these service industries loom large in the labour market. Retail and wholesale trade, for example, together employ 350,000 British Columbians, another 200,000 or so toil in the broadly-defined education sector, 150,000 work in financial services, and 275,000 earn their livelihood by providing health-related services.
An important trend in the global economy is that more services are now being “traded” across borders. Some estimates suggest that, by 2015, fully one-quarter of global trade will involve the cross-border sale of services (the rest will consist of trade in resource products and manufactured goods). Some scholars go so far as to say the world is experiencing a “third industrial revolution” based on the increasing tradability of services. Falling transportation costs and steady advances in technology have greatly facilitated the expansion of cross-border services trade. In particular, there has been a notable increase in the range of services that can be transported “digitally” thanks to the internet and widespread access to low cost telecommunications.
The rise of tradable services as an important driver of modern global commerce is good news for British Columbia. The province has several strengths that position it for success in a world where the demand for tradable services is growing at a significant pace. These competitive advantages include a skilled multi-cultural work force; the province’s Pacific Rim location; a large tourism industry; and strong industry clusters in the areas of financial, professional, and scientific, technical and communications services. B.C.’s high quality educational institutions are also an asset. Education is already a key source of “export earnings” for the province, owing to the tens of thousands of foreign students studying in provincial institutions (and who generally pay “market-based” tuition fees rather than the lower, taxpayer-subsidized fees charged to domestic students).
Education can be an even bigger engine for export growth and economic development in the coming decade. There are also promising opportunities to expand B.C.’s exports in many other service industries – e.g., engineering, financial services, tourism, and a host of technology-related services that embody intellectual property and depend on highly educated labour. Tradable services currently represent more than 30% of the value of the province’s total international exports. A recent Business Council paper examined B.C.’s exports of advanced technology products and services. We found that the value of technology-based service exports exceeds that of technology-based goods exports by more than three-to-one. In addition, services account for a large majority of the 85,000 or so jobs found in the province’s advanced technology sector.
All of this underscores the main point: locally-produced services which can be sold to customers beyond B.C.’s borders are a vital source of employment today and are likely to figure even more prominently in the job market and economy in the future.
Some Examples of B.C. Service “Exports”
- Tourism (specifically, the portion of overall tourism spending attributable to out-of-province visitors)
- Transportation services linked to the movement of goods and people to/from B.C.
- Engineering, accounting, legal and other professional services provided by B.C. firms to foreign clients
- Environmental, scientific and technical services provided by B.C. firms to foreign clients
- Financial services sold/provided by B.C. companies to foreign clients
- Education services (out-of-country students attending B.C. education institutions)
- Advanced technology services (e.g., software, web-based services, digital animation, drug trials and specialized health-related research undertaken in B.C. at the behest of out-of-province funders)