Services as a New Engine of Growth for ASEAN, the People’s Republic of China, and India

Abstract

Development of a vibrant and competitive services sector is a key characteristic of modern economies. In the developed world, services frequently account for two-thirds or three-quarters of all economic activity. The transition from agriculture through manufacturing to a services economy has been the hallmark of economic development for many countries. In line with this trend, we see many emerging markets currently working hard to support and develop services industries, and to put in place the regulatory structures required for more integrated international services markets. Doing so is likely to form an important part of efforts to avoid the so-called “middle income trap”, as improving services sector productivity is key to invigorating the economy and supporting the sustained innovation needed to move to high income status.