- Services are now a driving force in global trade, but many developing countries — especially least developed countries (LDCs) — are falling behind, particularly in services deliverable digitally
- Services account for 71% of global intermediate inputs, and their share of global exports rose to 27% in 2025
- Digitally deliverable services grew 7.1% a year on average over the past decade and now make up 56% of global services exports
- These span everything from insurance and financial services to engineering, scientific, architectural, and cultural heritage and recreational services
- LDCs’ share of global services exports has fallen to just 0.6%, and digitally deliverable services account for only 16% of their services exports
- Connectivity, payment, and skills gaps continue to hold back developing countries’ participation in digital trade
- Artificial intelligence and fragmented digital trade rules risk deepening existing divides
Services have become a driving force in global production and trade — supporting manufacturing, agriculture, and participation in global value chains — but many developing countries are falling behind, particularly in services that can be delivered digitally, the United Nations Trade and Development (UNCTAD) said.
In its Global Trade Update for September 2026, UNCTAD said the benefits of the services boom are not being shared evenly. Many developing countries, especially LDCs, face structural barriers that limit their participation in the fast-growing trade of digitally deliverable services — those that can be delivered remotely over computer networks, the agency said.
To close the gap, UNCTAD recommended three priority measures: improving services trade data, strengthening digital infrastructure and skills, and ensuring more meaningful participation by developing countries in international rule-making. “Together, these measures can help countries translate services growth into higher productivity, competitiveness and economic diversification,” it said.
Services are increasingly embedded in goods production and firms’ business models. In 2022, they accounted for 71% of global intermediate inputs — 78% in developed economies and 61% in developing economies. Services also make up 33% of intermediate inputs in industrial goods exports in developed economies, compared with 27% in developing economies and just 13% in LDCs. Better measurement of services trade, including services embedded in goods exports, is needed to more fully capture their contribution to competitiveness, diversification, and development, UNCTAD said.
Digitally deliverable services
World services exports grew by around 6.7% a year over the past decade and 8.3% in 2025. Digitally deliverable services grew even faster, averaging 7.1% a year, and now make up 56% of global services exports.
LDCs, however, are not keeping pace: their services exports grew just 3% a year, and their share of global services exports fell to 0.6% in 2025. Digitally deliverable services represent only 16% of LDC services exports, compared with 61% in developed economies.
These services cover a wide range of activities — insurance and financial services, telecommunications, computer and information services, intellectual property charges, research and development, trade-related technical, managerial, consultancy, engineering, scientific and architectural services, audiovisual services, health and education personal services, and cultural heritage and recreational services. “Competing in higher-value services requires stronger digital infrastructure, skills and regulatory capacity,” UNCTAD said.
As the digital divide persists, the rapid advance of artificial intelligence (AI) could widen it further. “Inadequate connectivity, costly international payments and skills shortages constrain participation in digital services trade. Affordability and connectivity gaps remain significant between developed and developing economies,” UNCTAD said, noting that half of the countries with the highest remittance costs are LDCs.
AI risks deepening these inequalities further, since computing capacity, data, finance and expertise remain concentrated in a small number of economies and firms — less than a third of developing countries have adopted national AI strategies.
Trade rules also need to evolve faster to keep pace with technology. “Multilateral services trade rules were largely designed before the digital era. Digital trade provisions have expanded rapidly through regional and bilateral agreements, creating a more fragmented regulatory landscape with uneven participation,” UNCTAD said.
Of the preferential trade agreements signed between 2000 and 2025, just over half (55%) include e-commerce or digital trade provisions. Since 2020, 90% of developed countries, 62% of developing countries, and 66% of LDCs have participated in agreements containing such provisions. To help developing countries participate more meaningfully, UNCTAD called for greater transparency, regulatory cooperation, and improved negotiating capacity.
READ: UNCTAD reports strong progress on trade facilitation reforms
