Modern Technology in the increasing service exports
Technology is an important element in our day-to-day life, but it also leads to productivity growth, competition in the global market, and determines global value chains. Therefore, the innovation of technology encourages new businesses and builds more competition and trade internationally. In addition, for many countries to have technological dynamism creates new opportunities.
Also, this type of technology allows the increasing service sector to be even more unbundled as many activities can be divided into different tasks and done in different countries, and services can be specialized and scaled where they can be consumed and supplied everywhere in the world.
The service sector now accounts for 50% of the world’s income and 70% of the world's employment while it is also becoming a very important key element for international trade where almost 25% of the service exports play an important role in the global economy. However, this is thanks to the technology that allows it to happen with the fast descent of telecommunication costs, the boost in the global adoption of the internet, and the development of broadband internet services that grant their delivery across the world.
Costa Rica has revolutionized their business destination from tourism and products to new investment opportunities in the service sector; for example, outsourcing, trade hub of technology and IT services, and software development. With our increasing access to technology, the efficiency of our service sector can only expand.
Furthermore, the World Economic Forum ranks Costa Rica as the top destination for quality human capital, validated in its second spot ranking across Latin America in the 2021 English Proficiency Index, and Coursera Global Skills Index 2020 ranked Costa Rica third in Latin America for its coding and programming skills.
For this reason, our country is now preferred as an offshoring destination for large companies and because of this, we effectively export services to North America, Asia and Europe. In fact, the Costa Rican Investment Promotion Agency (CINDE) states that the IT services exports represent 7% of the country’s GDP, with more than 169 companies operating out of the country. With this, Costa Rica displays a strong business environment for companies with an increasing service sector and plays at the top as an exporter of high value-added services in Latin America.
Written by: Valeria Peña Sequeira, International Business and Commerce Expert.