An architecture firm wins a contract to design an airport abroad. Engineers, software specialists and legal advisers help deliver it. Some work locally. Others work from overseas. As the contract grows, so does employment, not only within the firm but across its suppliers and the wider local economy.
Increasingly, this is what trade in services looks like.
Three in four workers in OECD economies are employed in services yet debates about trade and jobs still focus largely on manufacturing. New OECD evidence suggests that much of today's labour market adjustment is taking place elsewhere. Digitalisation makes more services tradable across borders, and the effects are reaching well beyond the firms directly involved. Many services that were once considered local can now be delivered internationally with the click of a button. What makes this shift important is not simply the number of jobs it creates, but the types of jobs it supports and who gets access to them. These questions are moving to the centre of international trade debates, including at this year's WTO Public Forum, which will highlight the growing role of services in job creation, economic opportunity and empowerment.
Services are increasingly at the centre of globalisation
Services trade takes different forms. Firms can deliver services directly across borders, establish affiliates abroad, or provide services through the movement of customers or workers. This analysis focuses on services delivered across borders, including exchange of activities such as software, engineering, finance, consulting and design.
Digitalisation has made many of these services easier to deliver remotely, expanding the opportunities for firms to reach international customers and collaborate across borders.
The result is a quiet but significant shift in the global economy. Firms can increasingly access
specialised expertise and serve international markets without having to be physically present in every location where they do business.
Services no longer sit alongside production; they underpin it. From manufacturing to business services, modern supply chains increasingly rely on knowledge-intensive tasks. That makes services trade an increasingly important driver of growth and employment.
Imported services create jobs too
Exports are easy to see but the benefits of imports are often less visible.
When firms expand services exports, employment tends to rise. OECD analysis finds that a 10% increase in services exports is associated with a 0.5% increase in sector-level employment.
But exports are only part of the story.
Imported services can also be a powerful source of job creation. Firms increasingly rely on specialised inputs, from software and engineering to finance and legal expertise. Access to these services can raise productivity, support expansion and increase labour demand elsewhere in the production process.
A 10% increase in imported services inputs is associated with employment gains of 1–2%, particularly in manufacturing and other non-services sectors.
The airport project illustrates why. Imported engineering, legal or digital services may substitute some tasks. They can also make viable projects that would not otherwise be possible. Access to specialised expertise can allow firms to undertake larger or more complex projects, creating demand for construction workers, equipment suppliers, transport services and other local businesses.
Imports are not only a source of competition. They can also be a source of growth.
Jobs created by services trade spread through local economies
The benefits of services do not stop at the firms that trade them.
As internationally connected businesses expand, demand spreads across the local economy. Employees spend more in shops, cafés and restaurants. Firms buy more support services. New activity creates further employment in sectors with little direct exposure to foreign markets.
The effects can be substantial.
According to OECD data, in Brazil, France and the United States, every additional job in tradable services generates between 0.6 and 1.6 additional jobs in local non-tradable services sectors.
This highlights an often-overlooked feature of services trade. Its employment effects are not confined to directly traded activities but ripple through local economies via supplier networks and consumer spending.
Services trade is changing career paths, job mobility and who benefits
Job creation, however, is only one dimension of how services trade affects workers.
As sectors become more trade-exposed, their workers tend to change jobs more frequently. Yet there is no evidence that greater exposure leads to higher unemployment, more temporary work or weaker attachment to the labour market.
This points to greater dynamism rather than greater insecurity.
Trade exposure is also associated with a shift towards larger firms, which are often better placed to compete internationally. For workers, this can mean greater access to training, career progression and professional networks.
The benefits also appear broader than is often assumed. Women and younger workers become more prevalent in some trade-exposed sectors as international activity expands, suggesting that the opportunities created by services trade may reach groups that have traditionally been less represented in internationally connected activities. Opportunities are not confined to highly educated workers. Different forms of services trade create opportunities across a wide range of occupations and skill levels.
Not all jobs are created equally. Trade in services influences not only the number of jobs available, but also how careers develop, how workers move between opportunities and the types of firms in which they work.
Skills and labour market policies must keep pace with services trade
The rise of services trade is blurring the boundaries between trade policy, labour market policy and skills policy.
Open and well-functioning services markets can boost productivity, strengthen supply chains and support employment. But the benefits will not automatically be shared across workers, sectors or regions.
To support the widest benefits of services trade, policies need to focus on adaptation as well as openness. Skills systems, lifelong learning and responsive labour market institutions can help workers move towards new opportunities as economies evolve.
Trade in services creates jobs through exports, imported inputs and local spillovers. More importantly, it is reshaping how labour markets work.
As digitalisation expands the range of services that can be traded internationally, the challenge is not simply to create more jobs. It is to ensure that workers can access the opportunities these markets create and that those opportunities translate into high-quality employment.