What Are Invisible Exports?

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  • Written By: Osmand Vitez
  • Edited By: PJP Schroeder
  • Last Modified Date: 09 May 2020
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Invisible exports typically represent the intangible items that leave a country, which may or may not receive tabulation in the country’s export calculations. Examples of these items can include balance of payments, overseas payments, licensing, and profit repatriation, among others. Economists track invisible exports as these items do have an effect on the country’s economy, though they may be lower than traditional exports. In many cases, these export types involve services rather than goods, which come from a variety of different sectors that fall outside of the manufacturing industry. Many different countries can export some type of service in their economies.

A common group of invisible exports is the outsourcing of services from one nation to another. For example, a company with little manufacturing may be able to export services such as call centers or technical support. This may fall into the intangibles that economists review when they look deeper into the types of goods and services a nation can offer other economies. The intangible service does not often fall under normal import and export rules, which can make it difficult to compute a true export. In some cases, these types of services may be unable to have accurate representation in export computations for economic purposes.

Another group of invisible exports that may not have representation in traditional export computations include profit repatriation. When a foreign company has a business locale in an economy, the profits made from this division often go back to the home country. The result is income that leaves one economy and does not really provide any positive impact on the foreign economy. Repatriation essentially takes money earned from one economy and places it into another. In many cases, it may be easier for economists to define the amount of nonrepatriated funds that will eventually go to the home country of foreign companies.

Invisible exports can indicate that a country is actually much stronger than first realized due to these intangible services. For example, tourism may fall into the invisible export category, with many different foreign individuals visiting a country. When tourism is at a high point, more foreign money pours into a country’s economy due to more buyers entering the market purchasing souvenirs and other products and services. Though many countries may not realize the effects of tourism, it can have a strong effect on a nation’s economy. Large countries with other sources of exports may fail to fully realize the effects of tourism.

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Post 1

Do the products of the illegal drug trade ever factor into discussions of "invisible exports?" There are countries in the world where the drug trade is huge and has a definite impact on the local economy, but it is almost impossible to track due to its nature.

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