The US Exports Intelligence

Most Americans work in the service sector so it’s not surprising that most export-related jobs are in the service sector (The U.S. exports about $2.2 trillion of goods and $1.2 trillion of services, but services are more labor intensive than manufacturing so they support more export jobs per dollar.)

Richard Baldwin writes:

In 2022, US service exports supported 8.9 million American jobs.

US manufacturing exports supported 2.2 million.

That’s four-to-one in favour of services. Yet in the national narrative, ‘export jobs’ almost always means things done in steel mills and factories.

…When a household in Germany pays for Netflix, that is an American export. When a Brazilian retailer buys Microsoft cloud capacity, that is an American export. When JPMorgan structures a financial deal in London, or an American consulting firm advises a company in Singapore, those are American exports too.

None of these is shipped in a container. No customs official records them as they clear the customshouse. Yet they are exports since they earn foreign income for America just as surely as the ‘Boeings, Beans and Beef’ that President Trump sold on his recent China trip.

Need I remind you that when OpenAI sells intelligence to people abroad, that is a US export? N.B. this is the future.

World trade in goods expanded roughly five-fold between 1990 and 2020. Trade in digitally enabled services expanded more than eleven-fold over the same period. These are the modern services.

The trade debate is fixated on manufacturing—where America is doing fine—while largely ignoring services, where America is crushing. Increasingly, our most valuable exports travel not on container ships but at the speed of light over fiber.