The growing significance of services as the engine for economic activity is widely recognized. Services represent two-thirds of the EU’s gross domestic product and those working in it, and this includes Finland, where the service sector has in many respects traditionally been less developed than elsewhere in Europe. An assessment of the significance of services must, however, take into consideration the many occasions when it is impossible in practice to keep services and industry apart. In the operations of many traditional industrial companies the proportion of services provided for customers is much higher than that of machines and equipment.

From the business perspective, the potential of services is enormous. Social and health care services, training, energy and environmental services, transport and financing are only a few examples. Just as important are the actual business-life services (maintenance and installation, IT, consulting, etc), which have a particularly strong international dimension.

Consideration of the ways to promote the services business can be separated at three levels: national, EU and global. At the national level the market potential offered by the public sector is considerable. In particular many local government services can be produced more efficiently than at present and in a greater range by private companies. This will require additional cooperation between the municipalities and companies.

In the EU, services account for only about 20 per cent of the trading between Member States. The service markets in Europe are very national. The original aim of the Services Directive, which is now at the implementation stage, was the wide-scale elimination of national restrictions and red tape aimed at services. The final watered-down outcome of the Directive was in this respect a disappointment. It gave, however, the Member States a strong message and obliged them to simplify the regulation of service activities nationally.

The main concern in the opening up of worldwide service markets is the rules of the game and their uniformity, evenness and predictability. Holding a key position here is the WTO, whose efforts to bring the Doha Round to a conclusion are, at the time of writing, once again at a critical stage. In addition, the liberalization of services must be taken clearly as the focal point in bilateral free trade negotiations that are taking place in the EU.