Developing economies risk missing out on the fast-growing digital economy without clearer and more predictable global trade rules, the United Nations Conference on Trade and Development (UNCTAD) said, warning that gaps in the current system could keep them on the sidelines of global innovation.

In its March Global Trade Update, UNCTAD highlighted the growing role of services trade as a pathway for countries to expand beyond traditional goods exports. It said sectors such as information technology, financial technology, logistics, and business services offer higher-value opportunities that can drive economic growth and job creation.

The report noted that services trade does more than generate revenue. It supports productivity improvements across industries by helping firms modernize operations, adopt new technologies, and connect to global value chains.

However, UNCTAD flagged structural barriers that continue to limit participation by developing countries. These include differences in regulatory systems, licensing requirements, and professional standards, which complicate cross-border expansion for service providers.

“Without stronger multilateral disciplines and predictable access in rapidly growing service sectors, including digital trade, data flows, financial services, and professional services, developing countries risk being left on the periphery of global innovation networks, limiting their ability to capture the full benefits of the digital and knowledge-driven economy,” the report said.

The agency pointed to the fragmented nature of global rules governing services markets as a key constraint. It said improving transparency in domestic regulations, recognizing professional qualifications across borders, and expanding technical assistance could help widen participation.

UNCTAD also underscored the role of a reformed World Trade Organization (WTO) in ensuring fairer access to global services markets. Stronger and enforceable commitments, it said, are necessary for developing economies to fully benefit from digital and knowledge-based industries.

“Without clearer commitments and enforceable rules, many developing economies and least developed countries struggle to participate effectively in global services markets, missing opportunities to diversify their economies, create higher-value jobs, and capture the benefits of knowledge-intensive and digitally deliverable services,” it added.

Trade ministers gathered at the WTO’s 14th Ministerial Conference in Cameroon from March 26 to 29 are expected to tackle how the global trading system can adapt to rapid technological and economic changes.

At the same time, UNCTAD warned that rising policy uncertainty and fragmentation are weakening the foundations of global trade. The report said the stability that once guided long-term investment and export growth is eroding, posing added challenges for countries seeking to expand their role in the digital economy.