The Unassuming Economist

In a recent column for VoxEU CEPR, Elwyn Davies, Mary Hallward-Driemeier and Gaurav Nayyar of the World Bank write about prospects of services-led development and the role of small firms in driving it.

“This column argues that the services sector deserves more credit for helping drive economic transformation than it generally receives. Using firm-level data from 20 developing economies, the authors find that while services establishments are smaller than manufacturing establishments, this matters less for their productivity. Services firms can scale up without sizing up through investments in human and other more intangible forms of capital can leverage the diffusion of digital technologies. “

This theme is elaborated upon further in their book, At Your Service?: The Promise of Services-Led Development (2021), which “assesses the scope of a services-driven development model and policy directions that maximize its potential”.

Related Reading:

Services Development and Comparative Advantage in Manufacturing

Global services value chains: A new path to development