For example, many manufactured products include a large services component that is buried in the price. By some estimates, as much as 30 per cent of the value of goods exports is actually created through services. Consider a smartphone. The parts and labour needed to assemble it might constitute less than half of what the consumer will eventually pay for it.
Most of the difference represents the cost of all the software that is loaded on the phone. Here is another example. Many companies today purchase back-office computing services on the cloud. Previously, a company may have invested in equipment and software and hired specialized staff to perform these functions. By purchasing cloud services, the company saves those expenses and boosts its productivity.