Chile will aim to double services shipments by 2025 with a view to reaching US$8 billion

RIO DE JANEIRO, BRAZIL – Services have been gaining ground in world exports over the years: their share rose from 9% in 1970 to 25% in 2019, but this has not been capitalized in Chile. In fact, during the last decade this type of domestic shipments fell and their weight in the export basket declined. To date, they account for only 12% of total Chilean foreign sales, which is half the world average of 24% and even less than the OECD average of 27%.

For this reason, and given the interest and demand for diversifying the export basket in a “smart” way, more than a year ago the Undersecretariat for International Economic Relations (Subrei) began working, together with a team associated with Duke University’s Center for Global Value Chains, on a National Services Export Strategy, the bases of which will be presented next Tuesday.

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The plan establishes three concrete goals for 2025, the first being to double exports of knowledge-intensive services by that year, with a view to reaching US$8 billion.

It also aims to extend the international presence of 100 Chilean suppliers in these services, and to triple the installed capacity of data centers located in the country, from 150 MW to 500 MW.

The head of the Subrei, Rodrigo Yáñez, explains that in this “first stage”, the bases suggest focusing on sectors in which Chile is already a world leader in the export of goods based on natural resources, such as mining, aquaculture, forestry and fruit, in addition to the Information Technology (IT) and data center services industry.

The undersecretary recalls that the country already has an ecosystem of thousands of companies -many of them small and medium-sized- that provide knowledge-intensive services to extractive industries. “The focus is no longer on what is exploited, but on how it is exploited,” he specifies, adding that with these foundations, the aim is to position Chile “as a leading country in the provision of knowledge-intensive, digital and sustainable services.”

In 2019, more than 10,000 service companies supplying the mining and agricultural sectors, over 3,500 in the forestry sector and 1,000 in the aquaculture industry were registered, and together, these firms employ more than half a million people. The future strategy would allow “the move towards a new growth paradigm, based on knowledge-intensive and high-value services”, according to Subrei.

“TEAM CHILE SERVICES”

The bases to be presented by the Undersecretary’s Office propose the importance of a coordinated work between public and private actors, and as a starting point – based on recent experiences in OECD countries – it is proposed to create the “Team Chile Servicios”.

The plan is that this unit will be led by the Subrei, and that it will also be integrated by public agencies such as Corfo, InvestChile, ProChile and the Services Export Committee of the Ministry of Finance.

When it is formed, the group would be responsible for supervising the five working groups that are suggested to be formed, dedicated to institutionalization; human capital and export readiness; export and investment promotion; national services branding; and regulation, infrastructure and statistics.

A WORK THAT REQUIRES CONTINUITY

Yáñez points out that the way to reach these bases has been central to the work of the Subrei in the last year, and since they aim to have continuity, it is a topic that has been addressed in the handover meetings with the representatives of the incoming administration, specifically with the future Undersecretary José Miguel Ahumada.

The current head of the Subrei says that those who will lead the Ministry of Foreign Affairs “have been very receptive and interested in the details of this strategy”.

But he affirms that for the issue to have continuity, it will be the decision of the authorities of Gabriel Boric’s government to see how they continue working the bases they will present, enriching them, adapting them or even complementing them with other sectors.

“I believe there is a common line with the incoming administration to diversify exports and also increase exports based on advanced human capital, intensive in knowledge, in other words, in services”, says Yáñez.