Today's globalisation is taking place on many levels. Our politics, economy, defence, culture, ecology and social life are increasingly intertwined with residents of other countries around the world. The ability to communicate and organise globally without distance playing a limiting role has brought the world closer together.
This "proximity" is also reflected in international trade. The export of goods and services in the Netherlands has tripled within 20 years. This growth is slightly stronger for services (301 percent) than for goods (267 percent). Whereas in 1995, Dutch service exports accounted for one-fifth of total exports, in 2017 the share of Dutch service exports had increased to a quarter. Service exports in the Netherlands also proved to be resistant to the 2009 economic crisis; whereas goods trade fell by 17 percent, service exports remained stable. Dutch service exports have grown faster than goods exports, especially over the past decade. Since 2012, the export of services from the Netherlands has increased 67 percent compared to a 37 percent increase in the export of goods (CBS, 2020a). International trade in services accounts for more than 11 percent of the Dutch GDP. This share has increased in recent years, while the importance of trade in goods has remained stable (Lemmers, 2015).
There are several reasons why international trade in services is rising. One is that companies have found other ways to produce. In the past, a company produced where it was located and sold its products in its vicinity. In the traditional division of labour, a producer looks for locations with the most favourable mix of availability of cheap labour, qualified labour, raw materials and capital. Because it has become relatively easy to organise and integrate production processes in geographically distant places, production is cut even further. Nowadays, companies are increasingly looking for the best location for parts of the production process. On the one hand, this increase is a result of the direct transfer of services in the production chain abroad, such as accountants, controllers and HR managers. Furthermore, the coordination of other activities such as IT and help desk functions are increasingly shifted out of the company’s home country (Vos & Loog, 2018). On the other hand, the fragmentation of the production of goods also boosts trade in services due to an increased need for transport of (semi-finished) products and because companies increasingly have their own production carried out abroad under their own management. The goods are only processed, not sold, which results in trade in services instead of goods. And even in regular production we see more and more that companies lease their machines rather than buying them, which is again a trade in services (NVL, 2018).
In recent years we not only see an increase in international services being acquired by companies, but also by consumers. As most services do not need a physical global distribution channel, they lend themselves perfectly to direct online purchase from the worldwide vendor. This means that service providers can sell to the world by just opening a website or creating an app. Multiple new digital giants such as Booking.com, Airbnb and Uber have optimised this business model by creating platforms targeted at consumers who can find large numbers of service providers in one digital location.
This new reality of direct (or semi-direct via a platform) digitised service transfers to and from enterprises or consumers, regardless of their locations, provides new challenges to statisticians. These digitised services are being sold and acquired worldwide, but generally not by the standard of well-monitored large-sized enterprises. The services are provided by smaller enterprises or even consumers. Even if they sell their services via platforms, they are often located somewhere else in the world and tend to have few employees. These services are for the largest part bought by consumers or small enterprises, which are scarcely monitored. This means that we can expect to have problems monitoring digitised services.
We live undisputedly in a very unique time. Disruptive inference of COVID-19 has changed our lives and hit the global economy. The coronavirus crisis has also affected international trade in services. In the second quarter of 2020, Dutch exports of services amounted to 52.8 billion euros. That is 12 percent lower than in the same period in 2019. Dutch imports of services fell by 17 percent. This is an unprecedented contraction of the international trade in services (CBS, 2020b).
As a result of the coronavirus crisis over the past months, we have been living in an even more digital society than ever before. The digital transformation has inevitably been accelerated by the COVID-19 pandemic, which can be observed in the Dutch trade in services in the second quarter of 2020. There were certainly companies that saw their international trade in services increase significantly. For example, the increase in online spending in the Netherlands resulted in turnover growth for online payment platforms. Also, Dutch exports of intellectual property grew by 13 percent as companies that support digital activities such as streaming of films and music have seen their imports and exports increase (CBS,2017a). The availability of data on digitalised products will also provide useful insight into the current impact of COVID-19 on the digital transformation of society.
Statistics Netherlands has conducted several projects over the last few years to improve the estimates for these digitised services. For the 2010 revision, estimates for several types of digitised services were implemented in the national accounts. The 2015 revision saw an update and expansion of those estimates, which were also included in the international trade in services statistics. The objective of this project is to create better estimates for the import of digitised services for the 2021 revision of the national accounts; to be published in 2023. More precisely, this means that we are going to focus on estimating the size of the import of six different types of digitised services for a time series on 2010-2016.
- Dwelling services due to digital intermediation (intermediation via Airbnb), imports
- Digital intermediation services of hotel services (such as Booking.com), imports
- Upscaling taxi services due to digital intermediation (such as Uber.com), imports
- Digital intermediation of travel (not taxi) services, imports
- Imports of database services and database originals
- Imports of goods via e-commerce as a sales channel