Business Wire

Global Trade in Services to Increase by $2trn Over Next Five Years, According to New Report by Western Union and Oxford Economics

Share

The Western Union Company (NYSE: WU), a leader in cross-border, cross-currency money movement and payments, today launches a new report, “The Global Services Trade Revolutions: Fuelling post-pandemic economic recovery and growth ,” in partnership with Oxford Economics – a leader in global forecasting and quantitative analysis.

This press release features multimedia. View the full release here: https://www.businesswire.com/news/home/20200811005332/en/

Comparison of global services export forecasts (Graphic: Business Wire)

Comparison of global services export forecasts (Graphic: Business Wire)

The report projects the value of international trade in services* rising from $6.1trn in 2019 to $8.0trn by 2025, equating to an increase of almost a third (31%) in the value of global flows over this period.

It is predicted this growth will be accelerated by the adoption of new technology and digitization of working practices forced by the onset of the COVID-19 pandemic – which, combined with a shift in attitudes to online interactions, is likely to fuel economic recovery and growth of cross-border trade in services in the coming five years.

Western Union Business Solutions and Oxford Economics’ central forecast scenario envisages a relatively strong economic recovery, but it is also possible that a more pessimistic scenario will unfold, characterized by a steeper near-term contraction and a more prolonged and incomplete recovery (see Comparison of global services export forecasts graph). Still, this scenario would only magnify the relative outperformance of digitally-deliverable services.

“For far too long the global service industry has been undervalued and its importance underestimated. This report shows that this needs to change. The economic impact of COVID-19 will be felt for years to come, but we can clearly see that the regions and industries that recognize and appreciate the value of global services will be in a better position to drive future success and ultimately, recovery,” said Andrew Summerill, President, Payments at Western Union.

Sector breakdown

The analysis suggests while the global economy is suffering in the short-term, trade in modern digital services will prove comparatively resilient through the current crisis. It estimates that the value of cross-border flows of B2B, ICT and financial services will decline by just 6% in 2020, compared to the value of goods trade, which will decline an estimated 13% (see 2019-2025 Predicted growth in international services trade graph).

Meanwhile, hard-hit traditional services categories such as tourism will decline by around 40% in 2020, while air passenger transport will decline by over 50%. As a share of total services trade, these categories are projected to slide to 39% by 2025 – down from 41% in 2019.

Geographic breakdown

The report also analysed these trends across eight large developed economies, finding B2B services will be the main driver of export growth, with financial services also important for key hubs like the USA, UK, Hong Kong and Singapore. Outside this sample, other predicted ‘hotspots’ for digital services export growth over the medium term include Korea and Japan, Australia and New Zealand, and Qatar and Saudi Arabia.

The USA will post the largest overall increase in services exports during the forecast period, the result of its global leadership in many categories of professional services, as well as its investments in digital infrastructure and technological innovation (see 2019-2025 Predicted growth in services exports by country).

Furthermore, it is estimated a broad, multilateral liberalization of trade policies on services could provide an additional 11% boost to the value of global services trade by 2025, which would equal an $890bn increase in the value of these cross-border transactions.

“The pandemic has already super-charged the growth in digital services and highlighted the potential for remote services to transcend global borders. Over the next decade, we’re going to see swathes of new business models redefine the possibilities for cross-border transactions. And in the short-term, global trade in services will be a vital component of recovery, and it will be digitally focused industries that will be the driving force,” added Summerill. The report, which aims to shine a light on the valuable contribution that global digital services trade brings to the economy now and its potential for the future, uncovers that trade in services has typically been undervalued, when compared to trade in goods or manufacturing.

The report estimates that services currently account for more than half (55%) of all global trade flows, equating to US$13.7trn of cross-border transactions in 2019. Official statistics state that the share of services in total trade amounted to 24% in 2019, up from 19% in 1995.1

“Our aim is to champion the industries fuelling economic growth and recovery and to provide support to boost the growth of the digital services sector,” concluded Summerill.

To access the report in full, please click here.

Note on research and methodology

The key framework in which Oxford Economics’ analysis is conducted is its own Global Econometric Model (GEM). The GEM replicates the world economy by interlinking 80 countries, 6 regional trading blocs and the Eurozone. These countries are interlinked through international trade in goods and services, competitiveness (measured by unit labour costs adjusted for the exchange rate), capital markets, interest rates and commodity prices. Historic data and forecasts are updated on a monthly basis by our country economists.

*Definitions of international trade in services used for this study:

  • Business-to-business (B2B) services: Professional services (e.g. engineering, legal) and royalty & license fees (e.g. fees for the use of patented technology).
  • Information and communications technology (ICT) services: Services related to computers (e.g. software development) and communication devices (e.g. telephone services).
  • Financial services: Activities of the finance industry including banking, insurance and asset management.
  • Transport & distribution: Services related to the international movement of goods (e.g. shipping, air cargo and cross-border road & rail transport) or transport of people (e.g. air passenger services).
  • Tourism & travel: Spending by temporary visitors to another country for leisure, business or other purposes such as education or medical tourism (exports are defined as inbound tourism flows).
  • Construction: Services relating to the construction/demolition of buildings and other structures, as well as installations and building repairs.
  • Public services: Services commissioned by the public sector.

About Western Union

The Western Union Company (NYSE: WU) is a global leader in cross-border, cross-currency money movement and payments. Our omnichannel platform connects the digital and physical worlds and makes it possible for consumers and businesses to send and receive money and make payments with speed, ease, and reliability. As of June 30, 2020, our network included over 550,000 retail agent locations offering our branded services in more than 200 countries and territories, with the capability to send money to billions of accounts. Additionally, westernunion.com, our fastest growing channel in 2019, is available in over 75 countries, plus additional territories, to move money around the world. With our global reach, Western Union moves money for better, connecting family, friends, and businesses to enable financial inclusion and support economic growth. For more information, visit www.westernunion.com.

About Oxford Economics

Oxford Economics is a leader in global forecasting and quantitative analysis. Our worldwide client base comprises more than 1,500 international corporations, financial institutions, government organisations, and universities.

Headquartered in Oxford, with offices around the world, we employ 400 staff, including 250 economists and analysts. Our best-in-class global economic and industry models and analytical tools give us an unmatched ability to forecast external market trends and assess their economic, social and business impact.

1 Oxford Economics estimates based on the OECD Trade in Value-Added (TiVA) database, together with services activities within manufacturing firms as reported in Miroudot and Cadestin (2017), “Services in Global Value Chains: From Inputs to Value-Creating Activities,” OECD Trade Policy Papers No. 197

WU-G

Contact information

Cristina Hoole
Western Union
Mobile: +44-(0)7766 070978
Cristina.Hoole@wu.com

About Business Wire

For more than 50 years, Business Wire has been the global leader in press release distribution and regulatory disclosure.

Subscribe to releases from Business Wire

Subscribe to all the latest releases from Business Wire by registering your e-mail address below. You can unsubscribe at any time.

Latest releases from Business Wire

Takeda Presents New Data Highlighting Scientific Advancements in Lung Cancer at ESMO Virtual Congress18.9.2020 13:55:00 EESTPress release

Takeda Pharmaceutical Company Limited (TSE:4502/NYSE:TAK) (“Takeda”) today announced that the company is presenting data from its lung cancer portfolio at the virtual European Society for Medical Oncology (ESMO) conference. Notably, insights from sub-analyses of the Phase 3 ALTA 1L study reinforce both the compelling evidence of intracranial efficacy with ALUNBRIG® (brigatinib) as a first-line treatment for patients with anaplastic lymphoma kinase-positive (ALK+) non-small cell lung cancer (NSCLC) as well as associated quality of life (QoL) data. Takeda is also featuring updated 10-month follow-up results from the Phase 1/2 trial of mobocertinib (TAK-788), demonstrating mobocertinib achieved a duration of response (DoR) of more than one year in the trial’s study population of patients with epidermal growth factor receptor (EGFR) Exon20 insertion+ metastatic NSCLC (mNSCLC). “We’re pleased to present our ongoing research in lung cancer at this year’s virtual ESMO congress, including new

Incyte Announces Encouraging Results From Phase 2 Trial of Retifanlimab (INCMGA0012) in Patients With Previously Treated, Advanced Squamous Cell Carcinoma of the Anal Canal18.9.2020 13:00:00 EESTPress release

Incyte (Nasdaq:INCY) today announced results from its Phase 2 POD1UM-202 trial evaluating retifanlimab, a PD-1 inhibitor, in previously treated patients with advanced squamous cell carcinoma of the anal canal (SCAC) who have progressed following standard platinum-based chemotherapy. The trial enrolled 94 patients, including those with well-controlled human immunodeficiency virus (HIV) infection (10%). Retifanlimab monotherapy resulted in a confirmed objective response rate (ORR) of 14% as determined by independent central review (ICR) using RECIST v1.1. Responses were observed regardless of PD-L1 status, presence of liver metastases, age or HIV+ status. Retifanlimab was generally well-tolerated with a safety profile as expected of a PD-1 inhibitor and no loss of HIV infection control. Key findings from POD1UM-202: N=94 ORR* (95% CI) 13.8% (7.6-22.5) Best OR*, n 1 CR 12 PR 33 SD DCR 48.9% DOR, median (95% CI), months 9.5 (5.6-NE) PFS, median (95% CI), months 2.3 (1.9-3.6) OS, median (95

Sigfox and Cube Infrastructure Managers Announce Major Partnership in IoT Infrastructure18.9.2020 10:30:00 EESTPress release

Sigfox, the global 0G network1 and cloud provider for industrial data, is proud to announce a new strategic alliance with Cube Infrastructure Managers (Cube), through the sale of its German 0G network to Cube. Sigfox has grown its 0G IoT services by rolling out 0G networks across 72 countries and regions, which was largely achieved with partners called Sigfox Operators. These operators are the owners of the 0G networks, which they operate as exclusive connectivity providers of Sigfox IoT services, offering worldwide connectivity to customers. The sale of the German network to Cube will allow Sigfox to finance its continued innovation efforts in data value extraction and improvements in cloud algorithms to reduce energy consumption and allow the implementation of even more cost-effective devices and sensors. This press release features multimedia. View the full release here: https://www.businesswire.com/news/home/20200918005116/en/ Cube Infrastructure Managers, the European infrastructu

Sensorion successfully raises approximately €31 (US$ 36.5) million in an oversubscribed private placement to US and European investors18.9.2020 09:00:00 EESTPress release

Regulatory News: Not for release, publication or distribution, directly or indirectly, in or into the United States, Canada, Australia or Japan. This press release is not intended as an offer and is for informational purpose only Sensorion (Paris:ALSEN) (FR0012596468 – ALSEN – the “Company”) a pioneering clinical-stage biotechnology company which specializes in the development of novel therapies to restore, treat and prevent within the field of hearing loss disorders announces today the success of its previously announced capital increase. The Company has placed 18,236,000 new ordinary shares with a nominal value of €0.10 each (the “New Shares”), for total gross proceeds of approximately € 31 million by means of an accelerated bookbuild offering to the benefit of categories of persons (the “Reserved Offering”). The issue price of the New Shares is €1.70 per share, representing a 3.5% discount to the weighted average share price on the day preceding the date on which the issuance price

ESMO 2020: Phase II CLARINET FORTE Results Show Increasing Dose Frequencies of Somatuline® Autogel® (lanreotide) Allows Patients with NETs to Delay Treatment Escalation by up to 8.3 Months18.9.2020 08:00:00 EESTPress release

Regulatory News: Ipsen (Euronext: IPN; ADR: IPSEY) today announced the release of first efficacy and safety data from the CLARINET FORTE study, with the abstract to be presented as a mini-oral presentation at the 2020 European Society for Medical Oncology (ESMO) Congress, taking place virtually from 19-21 September 2020. The prospective single-arm, open-label, exploratory, international Phase II study investigated the efficacy and safety of increasing the dose frequency of Somatuline® Autogel ® (lanreotide) in patients with pancreatic or midgut NETs with centrally-assessed progression within the last two years while on a standard lanreotide regimen for ≥24 weeks. An extension of progression-free survival (PFS) rates and encouraging disease-control rates (DCR) were recorded in both tumor types, with no new safety signals. “These results support a clinically meaningful benefit to a population of patients with high unmet medical need by potentially delaying escalation to more toxic treatm

Vifor Pharma Group Announces Successful Sale of OM Pharma18.9.2020 08:00:00 EESTPress release

Regulatory News: Vifor Pharma has today announced the successful sale of 100% of the share capital of OM Pharma, a Vifor Pharma Group company to Optimus Holding Ltd. The terms of the deal include: A purchase consideration of MCHF 435 for 100% of the share capital An earn out related to potential future value gains on 20% of Optimus Holding Ltd. equity to be determined before the end of 2027 upon a trade sale, IPO or EBITDA multiple This earn out together with the purchase consideration could result in a total transaction value exceeding MCHF 500. The deal is expected to close within 30 days. OM Pharma is a Geneva-based company mainly active in the field of microbial derived immunotherapeutics and has developed strongly outside the core strategy of Vifor Pharma over the past few years. Optimus Holding Ltd. is a Swiss Group, founded by Etienne Jornod together with long-standing Swiss entrepreneurs and Abdi Ibrahim (28.5%), a Turkey-based pharmaceutical company operating in 12 countries a

In our pressroom you can read all our latest releases, find our press contacts, images, documents and other relevant information about us.

Visit our pressroom