Service industry to dominate business

Rita A.Widiadana, The Jakarta Post, Nusa Dua, Bali

The global business environment will change dramatically in the near future with the service industry dominating the world economy, and developing countries like Indonesia must improve their service industry if they want to play a bigger role in international trade.

This is the conclusion of the International Conference on Global Business in Service here in Nusa Dua involving participants from Malaysia, Australia, the United States, Mauritius, Brunei Darussalam, India and Indonesia.

In his keynote speech, Rudjito, president commissioner of Bank Rakyat Indonesia, commented that Indonesia must work very hard to upgrade its service industry including banking, tourism and travel, hospitality and transportation.

"Improving discipline, efficiency, quality human resources and education is the key to creating a successful service industry," he said.

The service Industry has become more important to the economies of most countries as total world trade service now accounts for about 30 percent of total world trade.

The growth of international service trade is quite high at 16 percent per year.

Services also account for more than 70 percent of production activities and employment in developed countries.

The strongest growth in export of services was recorded by China and the ASEAN countries including Thailand, Malaysia, Singapore, Indonesia, the Philippines, Brunei Darussalam, Vietnam and Myanmar.

Sri Susilowati, head of the international program at Trisakti University's school of economics, however, commented that Indonesia, in terms of its service industry, lagged behind some ASEAN countries such as Singapore, Thailand and Malaysia.

"Compare the country with Malaysia, which has similar cultural roots and people. The Malaysian service industry is progressing quickly due to self-discipline, strong commitment, an excellent education system, punctuality and the willingness to progress," Susilowati said.

She used as an example the tourist industry, saying Indonesia with its diverse cultural and natural attractions could draw no more than 5 million tourists generating US$6.5 billion a year as compared to a tiny country like Singapore, which was able to attract more than 11 million visitors every year.

"The key to their success is their improved and efficient, adaptive and excellent services in various tourist-related industries, including airlines, hotels, transportation, promotions, hospitality -- and their excellent infrastructure," she said.

China is another success story in the global trade and service industry with annual double digit growth.

The conference was jointly organized by Trisakti University in Jakarta, Udayana University in Bali, Edith Cowan University, Curtin University and Adelaide University in Australia.