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Exporting Services Economic Future Lies

September 16, 2021 // by administrator

Exporting Services Economic Future Lies

The argument is that with the Future end of manufacturing, and no product to sell internationally to support it, non-resource states like Victoria will either fall into recession quickly or see a prolonged period of falling real incomes. Some believe that the solution is an infrastructure program that aims to improve economic productivity. While this is a valuable strategy, it’s not one that can sustain over the long-term. It also doesn’t take into account the potential of Victoria’s services economy.

While the news media is full of stories about manufacturing job losses in the Victorian, the rest of Victorian’s economy has been creating services jobs. In the decade from 2013 to 2013, there was a net loss in manufacturing jobs. However, there were a quarter of a million additional jobs in health, education, and professional services. While manufacturing jobs have declined to 9%, services jobs have increased to 77%.

Future Motor Vehicle Manufacturing

This will made worse by the closing of the motor vehicle manufacturing industry. Sally Weller also point out that dumping so many displaced workers onto the labour market at once is going to create a lot of misery for those who are retrench. They will be help by government programs, I hope. There will be new export opportunities for other parts of the manufacturing sector if there is a lower dollar.

The economy appears to be doing well right now. The significant increase in job listings on has been due to improved business confidence, housing, and retail sales. These numbers are up 12% in Victoria since September last year, compared to the national average of 9.9%. This will aid in manufacturing adjustment if it is sustain by fiscal and monetary policy flexibility.

What are the prospects for those of us working in services jobs? The global trade in services is one of the areas our Institute has been focusing on for the Victorian Government

Once, exporting services was consider an absurdity. Delivering services had to done personally. They could not deliver remotely. This notion has been completely replace by the characteristics and technology of services.

Future Victorian Government

A comprehensive study of global services trade was present to the Victorian government last Year. It found that exporting services is big business, for all except Australia, and by implication Victoria. Particularly, the emerging economies of Asia, India, and China are at a point in their development when they have a growing demand for high-quality services but lack the ability to supply them domestically. As a result, the countries like India and China are increasing their imports of services at 15-20% annually. This could change in the future, but for now there’s an opportunity.

Our prototype Australian services export entrepreneur is, of course, our humble and underpaid academic who cracks difficult markets instead of the highly paid management consultant. Through partnerships with international institutions, universities have become culturally savvy beachheads in foreign markets. They have also partnered with overseas institutions to offer both onshore and offshore course delivery.

Education services are now a major component of our exports. In Victoria, our universities are among the most important export organizations in the state.

The chart shows that education is the key to the success of Australian services exports into developing countries like China and India. About 90% of Australian exports are to India and China from travel services. (Victorian data on services exports to particular countries is not available).

Export Of Education

The export of education services has been increasing rapidly, at 11.7% per year between 2001 and 2009. However, the exports of strategically important professional services, where we have built a substantial capacity as a service industry, are much lower than the other business services. They are included in other business service and have almost no effect on the chart.

Over the 2004-2012 period, China and India imported other business services at 17% and 12 percent per annum, respectively. However, Australia’s exports to China of other business service were only 3%. The growth rate of Australian exports to India of other business services was too modest to be meaningful. Although the data is not complete, it seems that the United States has successfully taken advantage of China’s opportunity. It is difficult to pinpoint the top service exporters to India that are most successful, Germany and the UK stand out.

Although the Australian dollar is a major factor in poor local export performance, it can also be exacerbated by other factors. Many obstacles exist to the export of services to Asian destinations. Not least, cultural and language differences. But necessity is a powerful driver of determination, especially in the education sector. Universities have become some of the most important exporters in Victoria because they need compensatory revenue. This may be true for many other professional services.

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