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Cross-Border Supply of Services: The Private Sector’s Experience

Explore IBM's global operations, the impact of cross-border service delivery, and the evolving landscape of computer services in international trade. Learn about WTO objectives, technological advancements, and the push for liberalization in CRS.

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Cross-Border Supply of Services: The Private Sector’s Experience

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  1. Cross-Border Supply of Services:The Private Sector’s Experience Douglas Gregory Vice President, Governmental Programs EMEA IBM Corporation

  2. IBM Today • Operations and customers in over 160 countries • 140K people work in the US, 180K outside of the US • Nearly 60 percent of revenue from outside of the U.S. • Nearly half of revenue from services • Nearly two-thirds of revenue from software and services • Serving global customers from worldwide network of interconnected data centers and software development labs • Cross-border delivery of services is growing

  3. IBM Research Worldwide Watson 1961 Zurich 1956 Beijing 1995 Almaden 1955 Tokyo 1982 Austin 1995 Haifa 1972 Delhi 1998 Agenda slide

  4. IBM Research & Development • World’s largest IT research organization • Innovation-driven, customer focused • More than 3,000 scientists and engineers • 8 research laboratories and 24 development laboratories worldwide • 5 Nobel prizes (high-temperature superconductivity, scanning tunneling microscopy) • R&D investment: more than $5 billion per year • Strong focus on Services • On-Demand Innovation Services (ODIS)

  5. Benefits from Information Technology • Enhanced productivity and efficiency, reduced costs, and increased economic competitiveness across a broad range of manufacturing and services sectors • 63 ITA participants have recognized these benefits and encouraged IT deployment by agreeing to eliminate customs duties on IT products • Computer and Related Services (CRS) provide the next step in realizing the benefits of IT • Liberalization of CRS, including cross-border delivery, will help to spread the benefits of IT

  6. Opportunities in Cross-Border Services • The Internet facilitates cross-border delivery of Computer and Related Services and other CRS-enabled services • The Internet enables the integration of a variety of CRS into a single offering • Interconnected worldwide data centers provide capability for: • Efficient allocation of data processing resources in a global grid computing environment • Remote back up and disaster recovery for global customers • Cross-border delivery via networks, including the Internet, makes CRS available to a broader set of users in a cost-effective manner • Cross-border delivery via networks enables service providers from developing countries to reach export markets that otherwise would be out of reach

  7. Evolving Computer Services • The Internet was not a consideration during the Uruguay Round (1986-1994) • New developments include the Web, application hosting, remote data centers and backup storage, grid computing, on demand computing, and e-commerce • Information technology and IT services will continue to evolve • Trade agreements for IT services need to be designed so they do not quickly become obsolete • Technology neutrality of the GATS ensures that Mode 1 (or Mode 2) commitments cover delivery via the Internet • Internet gambling case finding

  8. Business Process Outsourcing • IT-enabled services to help a business or government organization run its operations • IBM sees this as an enormous US$500B market opportunity • May include Computer and Related Services alone or in combination with Management Consulting Services under the GATS • Cross-border delivery via networks creates opportunities: • Organizations have access to the best services at the most competitive prices • Service providers from both developed and developing countries can serve global markets

  9. Doha Round Objectives • Commitments for full liberalization in CRS • Cover technologically evolving services • Commitments at “2-digit level” (CPC 84) • Commitments for full liberalization in Management Consulting (CPC 865) and Services Related to Management Consulting (CPC 866) • Liberalize for services that can be delivered electronically

  10. WTO Friends of Computer Services • Informal group of countries formed to promote liberalization of CRS • Includes developed and developing countries • FOCS group of 14 countries issued joint statement on 25 February 2005 • CRS as “tool for economic development” • Statement calls for full liberalization of CRS • “by making full market access and national treatment commitments for the sector as a whole (CPC 84)”

  11. The following countries signed the FOCS joint statement endorsing full liberalization of Computer and Related Services: Friends of Computer Services

  12. Conclusion • The Internet has enabled much greater cross-border trade in services, including CRS • Liberalization of CRS enables economic development and job growth • The Doha Round is an economic development opportunity for both developed and developing countries

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