Analysis of Service Export Competitiveness Using the Manufacturing-Service Universal Space Model

Dae-Young Koh and Chun Kon Kim
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Dae-Young Koh: Korea Institute for Industrial Economics and Trade
Chun Kon Kim: Korea Institute for Industrial Economics and Trade

Industrial Economic Review from Korea Institute for Industrial Economics and Trade

Abstract: Despite the rapid expansion of trade in services, especially digital services, few studies have attempted to quantitatively assess the competitiveness of service exports. The main purpose of this study is to analyze the export competitiveness of South Korea’s service sectors and to derive policy implications from the empirical findings. This study utilizes the World Trade Organization (WTO)’s Trade in Services by Mode of Supply (TiSMoS) dataset in addition to various indicators derived from a Universal Space Model (USM) that encompasses both manufacturing and services.

The results of the analysis show that the level of South Korea’s service specialization (particularly in high-value-added digital services) is very low compared to global leaders, and its export specialization structure remains concentrated in high-value-added manufacturing. This highlights the need for substantial policy efforts to build core capabilities and enhance national competitiveness. The findings also reveal specific service sector segments that Korea should make a priority, namely, intellectual property licensing and research and development (R&D) services.

Keywords: service industry; trade in services; service exports; digital trade; digital exports; export competitiveness; universal space model; TiSMoS; intellectual property licensing (search for similar items in EconPapers)
JEL-codes: F14 F21 F23 (search for similar items in EconPapers)
Pages: 20
Date: 2025
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Published in KIET Industrial Economic Review Vol. 30, No. 6

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