Digital Trade

Least Developed Countries are being left behind in the fastest-growing segment of world trade. While digitally deliverable services now account for over half of global services exports, LDCs capture a vanishing share of that growth, and their position is worsening even as their exports rise in absolute terms. Between 2015 and 2023, their digital-services exports grew 43% in dollar terms, yet their global market share fell over the same period. That divergence is the puzzle this analysis takes up: not why a digital divide exists, which is intuitive enough, but why it keeps widening even as LDCs’ own exports grow. Is this simply a matter of infrastructure catching up over time, or does the digital services economy, with its compounding returns, concentrated capital, and now-fragmenting trade rules, structurally reward early movers in ways that make the gap self-reinforcing rather than self-correcting?