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Services accounted for 71% of global intermediate inputs in 2022, while their share of global exports rose from 23% in 2015 to 27% in 2025, according to UNCTAD.
Digitally deliverable services now make up 56% of global services exports, after growing at an average annual rate of 7.1% over the past decade.
Least developed countries remain largely excluded from this shift, with digitally deliverable services accounting for just 16% of their services exports, compared with 61% in developed economies.
UNCTAD says weak connectivity, high payment costs, limited skills and low AI readiness risk widening the gap further.
Services are becoming central to global production and trade, accounting for 71 per cent of global intermediate inputs in 2022, according to a United Nations report.
Their share of global exports rose from 23 per cent in 2015 to 27 per cent in 2025, the United Nations Conference on Trade and Development said in its September 2026 Global Trade Update.
The shift is being driven by digitally deliverable services, or DDS, which grew at an average annual rate of 7.1 per cent over the past decade and now make up 56 per cent of global services exports.
But least developed countries have captured only a small part of this growth. DDS account for just 16 per cent of their services exports, compared with 61 per cent in developed economies, UNCTAD said.
The agency said the growing use of services across sectors, known as servicification, is changing how goods are produced and traded. Logistics, finance, design and data management are increasingly embedded in manufacturing, agriculture and other activities, while companies are also bundling services such as maintenance and performance guarantees with physical products.
Services accounted for 78 per cent of intermediate inputs in developed economies in 2022, compared with 61 per cent in developing economies. Their role in exported goods is also significant, though uneven. Services made up 33 per cent of intermediate inputs in industrial goods exports in developed economies, 27 per cent in developing economies and just 13 per cent in LDCs covered by available data.
The gap is particularly visible in export performance.
Global services exports grew by about 6.7 per cent annually over the past decade and by 8.3 per cent in 2025. Services exports from LDCs grew by only 3 per cent a year over the same period.
Their share of global services exports, already below 1 per cent in 2010, declined to 0.6 per cent in 2025.
UNCTAD attributed this weaker performance to limited digital infrastructure, inadequate connectivity, weak regulatory frameworks and insufficient skills.
The composition of services exports also differs sharply. Developed economies, and a growing number of developing economies, have moved towards higher-value, knowledge-intensive and digitally deliverable services. LDCs remain more dependent on traditional services such as transport and travel.
Services are also poorly measured in many developing economies, especially when embedded in goods exports. UNCTAD said many countries lack bilateral data, mode-of-supply breakdowns and sector-level information, leaving a large part of services trade invisible in official statistics.
Participation in digital trade requires reliable and affordable connectivity, digital skills, smooth data and payment flows, and predictable regulation. Many developing countries, particularly LDCs, still face major infrastructure and affordability gaps.
Cross-border payments are another constraint. High transaction costs, limited interoperability and fragmented payment systems can prevent micro, small and medium-sized enterprises and freelancers from serving foreign customers. Half of the countries with the highest remittance costs are LDCs, the report said.
There have been improvements in parts of Africa. Mobile money use among adults in sub-Saharan Africa rose from about 27 per cent in 2021 to about 40 per cent in 2024. The Pan-African Payment and Settlement System is also helping reduce cross-border transaction costs and dependence on offshore clearing.
Intellectual property protection can create another barrier. UNCTAD cited its work with Caribbean Community countries, where creative services exporters face exclusion from major digital payment platforms and weak intellectual property enforcement, limiting their ability to monetise digital exports.
The report also warned that artificial intelligence could become another source of divergence.
AI deployment depends on advanced digital infrastructure, computing capacity, data, investment capital and skilled workers — resources concentrated in relatively few economies and firms.
UNCTAD said AI could raise productivity, support innovation and reduce the cost of producing and delivering digital services. But automation of routine and lower-skilled tasks could affect activities that have traditionally provided entry points for developing countries into global services markets.
The gap is reflected in the AI Preparedness Index, which covers 174 countries. In 2023, the average score was 0.65 for developed economies, 0.43 for small island developing states, 0.41 for developing economies and 0.31 for LDCs.
The index measures digital infrastructure, human capital and labour market policies, innovation and economic integration, and regulation and ethics.
Less than one-third of developing countries have adopted national AI strategies, according to UNCTAD, while gaps remain in digital infrastructure, skills, research capacity and access to computing resources.
The regulatory framework has also struggled to keep pace with digital trade.
The World Trade Organization’s 1998 Work Programme on Electronic Commerce created a forum for discussion, but provided limited clarity on multilateral rules and did not generate new market-opening commitments.
The 14th WTO Ministerial Conference, held in March 2026, failed to reach consensus on extending the moratorium on customs duties on electronic transmissions, resulting in its expiry.
At the conference, 66 WTO members advanced the Agreement on Electronic Commerce, seeking its incorporation into the WTO legal framework. Separately, 24 members pledged to maintain the moratorium and agreed on a common definition of electronic transmissions.
Digital trade rulemaking is increasingly moving into bilateral, regional and plurilateral agreements. Of 487 preferential trade agreements signed between 2000 and 2025, 55 per cent included e-commerce or digital trade provisions, 39 per cent included digital trade exceptions and 38 per cent covered personal data protection.
Since 2020, 90 per cent of developed countries, 62 per cent of developing countries and 66 per cent of LDCs have participated in preferential trade agreements containing digital trade provisions, showing wider but uneven engagement.
UNCTAD said developing countries need stronger statistical systems to measure services trade by partner, sector and mode of supply. It also called for affordable broadband, digital payment systems, digital identification frameworks and digital skills to help countries participate in modern services trade.
The agency said development assistance and international cooperation could help finance digital infrastructure and skills, while supporting governments in assessing and implementing digital trade commitments.
It also called for greater transparency, regulatory cooperation and interoperability as digital trade rules increasingly emerge through regional and plurilateral initiatives.
Developing countries, particularly LDCs, need meaningful participation in these processes so that emerging rules reflect differences in development needs, institutional capacities and regulatory priorities, UNCTAD said.