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Working Paper 12-21

The Services Sector in Asia: Is It an Engine of Growth?

by Donghyun Park, Asian Development Bank
and Kwanho Shin, Korea University

October 2012

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The underdeveloped services sector in Asia has the potential to become a new engine of economic growth in developing Asia, which has traditionally relied on export-oriented manufacturing to power its growth. In this paper, Park and Shin empirically analyze the prospects for the services sector in Asia. Their analysis of 12 Asian countries indicates that the services sector has already contributed substantially to the region's growth in the past. Somewhat surprisingly, in light of the difficulty of achieving productivity gains in services, they also find that services labor productivity grew at a healthy pace in much of the region. Overall their analysis provides substantial cause for optimism about the role of the services sector as an engine of growth in Asia. However, they caution that some Asian countries where the services sector is currently struggling, such as Korea and Thailand, will find it more challenging to develop the sector.


Working Paper 12-23: Overlooked Opportunity: Tradable Business Services, Developing Asia, and Growth November 2012

Working Paper 12-20: Performance of the Services Sector in Korea: An Empirical Investigation October 2012

Working Paper 12-18: Developing the Services Sector as Engine of Growth for Asia: An Overview October 2012

Working Paper 12-17: Prospects for Services Trade Negotiations October 2012

Working Paper 12-16: Transactions: A New Look at Services Sector Foreign Direct Investment in Asia October 2012