TRENDS IN INTERNATIONAL TRADE AND FOREIGN DIRECT INVESTMENT IN SERVICES
Cross-border Trade in Services Is Not New!
“Do you know what blockchain technology is?” This is the question that was posed by the organizer of a small, private meeting composed of business and legal consultants in Downtown Los Angeles in 2017. For some sitting at the table, blockchain technology was a new concept. Blockchain technology is a digital ledger that allows for information sharing among authorized parties and eliminates a third-party or middleman who controls how information is distributed. Each person has access to the exact same information, which is impossible to copy or alter using this technology. The meeting organizer explained how blockchain technology had been introduced to the agricultural sector to enhance the tracking system applied to the whole supply chain from the farm to the table to ensure product safety. The technology also presented an opportunity for service providers in this meeting to collaborate and offer several services to farmers, especially in the Sub-Saharan African region, on developing their competitiveness in the U.S. market through the use of blockchain technology.
Blockchain technology is an important 21st-century innovation that is revolutionizing the way in which not only commodities, but services are offered both domestically and internationally. For example, the banking industry continues exploring ways in which the technology could improve efficiency and security in financial transactions in the global economy. In 2018, analysts predicted that companies, mainly in the area of financial services, would spend up to US$2.1 billion on blockchain technology, twice as much compared to the previous year (Mearian 2018). A year later, more company executives expressed that blockchain technology was among its top five priorities. However, only 23% of company executives actually began incorporating blockchain technology, down from 34% the year prior (Budman et al. 2019, 4).
Blockchain technology continues to have a tremendous impact on numerous global services-based industries. At the same time, it is important to understand that this technology is merely a part of a long line of innovative solutions for cross-border trade in services that go as far back as ancient history. In other words, although new technologies continue to appear that further facilitate the cross-border trade in services, the import and export of services have a long historical and sustainable track record, as in the areas of transportation, logistics, finance, and insurance.