Page 162 - Contributed Paper Session (CPS) - Volume 1

CPS1239 Valerie M.B. et al.
and 2017 stayed broadly constant: On average, a dollar of demand for
manufacturing production generates nearly $0.20 of services globally.
However, the indirect component is not only about twice as large but has
grown by more than 15%: the total (direct and indirect) contribution of
services to a $1 dollar value added in manufacturing increased from $0.55 in
2000 to $0.62 in 2017.
The contribution of services to exports is also high. We find that although
services exports as a share of total exports have stayed around 17% between
2000 and 2017 in Asia, the contribution of services to exports has grown by
25% during the same period, and constitute about 34% of total exports I value
added terms. Moreover, most of the services are domestically-procured, and
come from sectors that are not exported such as finance, wholesale trade and
transportation. All countries show a substantial contribution: for every $1 of
manufacturing value added demand in developing Asia, about $0.16 comes
from the direct contribution of services and $.26 comes from services’ indirect
contribution. This compares to $0.21 and $0.38 in OECD countries,
respectively.
Globally, all manufacturing sectors show that services contribute to
between 50% and 60% of their value added, and the phenomenon is not only
limited to high-tech manufacturing sectors. Figure 2 shows the direct and
indirect contribution of services to the value added of each manufacturing
sector globally. Transportation equipment, which is deeply embedded in
global value chains, is not only the most servified manufacturing sector (at
57% in 2017), but this contribution grew the most of all manufacturing sectors
between 2000 and 2017. This is not surprising: transport equipment,
particularly autos, is also one of the most automated sectors (using robots).
Other sectors, such as paper printing and publishing, as well as food,
beverages, and tobacco, tend to be mostly nontraded, and are directly linked
to services such as publishing and restaurants, respectively. Only one sector,
leather and footwear, became less servified between 2000 and 2017, although
services still contribute to 50% of their value added.

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