Internet has become an important platform of service delivery. ICT has enabled unbundling of economic activities at a very fine level of disaggregation – ultimately at the level of individual tasks. Firms are growing their offshore outsourcing of services, similar to what has been going on in manufacturing for quite some time. Countries and regions are increasingly specializing in different stages of business processes or company value chains. What we see on the global scene are stronger global hubs of specialization rather than nationally collaborative and integrated production and manufacturing systems. 

It is a question of deeper international division of labor in both inter- and intra-firm transactions, which is likely to spur global economic growth in a similar way as expanding exports and foreign direct investment. Yet, we know quite little of the implications of this new paradigm globalization.

International competition is likely to change dramatically. Competition that used to be between industries and firms will increasingly move to the level of tasks and hence will be intensive among individuals performing those tasks. That leads to several questions of regional specialization and labor market outcomes:

To what extent high-skill tasks will become tradable? 

What kinds of jobs are most prone to be off-shored?

Are services jobs becoming off-shoreable to the same extent as manufacturing jobs? 

What does international competition in services, or “exported” services look like; what types of skills are required, and what regions do to benefit from “exporting” services?

Today, an increasing number of service activities have been digitized and converted into an algorithm. Consequently, a significant part of service production has already been separated from the consumption of those services. Overall productivity has grown and specialization across regions increased. Gains from trade for digitized services or tasks are likely to be as large as the gains from trade in goods have been.

The general policy issue is how to adapt to the emerging “second unbundling globalization”. Specific policy issues relate to regulation of ICT infrastructure, and promotion of ICT enabled services.

Are there needs for international standardization, and if, at what level?

Is network neutrality the best way to guarantee the most efficient service provision? If so, how should it be promoted at national and international level?

Are there any specific policy measures to increase regions’ or countries’ attractiveness as location of higher value added (tradable) services?

Which production factors remain immobile in the “new globalization”?

Under what conditions do domestic ICT markets become a platform for international competition in services?