New technologies like driverless vehicles, robots, artificial intelligence (AI), Internet of Things (IoT), additive manufacturing and blockchain may seem like abstract buzzwords, but their implications for the future of global trade are all too real.
Cross-border trade is nothing if not expensive. Think of how much time, effort and expense goes into making raw ingredients into finished goods and moving them from country of origin to end consumer through globe-spanning supply chains over land, air and sea. Each logistical touchpoint generates yet another stack of paperwork confirming the what and the where, before the next step in the transcontinental journey begins.
On their own, each individual advancement—say warehouse robotics or IoT—is effective enough but taken together, these technologies stand to usher in a new, hyper-efficient era in trade, helping to level the playing field between small businesses in developing economies and the established mega-corporations of first-world nations. This is one of the key findings in the World Trade Organization’s latest research, World Trade Report 2018: The Future of World Trade – How Digital Technologies are Transforming Global Commerce.
Though data from some sources calls into the question the economic productivity gains achieved through technology, there’s little doubt that digital innovations are instrumental in reducing the speed and friction at which business gets done. AI offloads much of the decision-making minutiae from humans, freeing personnel to focus on meaningful work that requires evaluation and insight. Artificial intelligence reduces error rates, thereby eliminating much of the time needed to revisit and repair. Automated warehouses powered by robotic systems find and sort goods quickly and safely.
Then there’s blockchain, the tamper-proof decentralized database technology that securely stores information for access by stakeholders anywhere, at anytime. Blockchain has already gained momentum in shipping and logistics by cutting much of the manual and repetitive paperwork out of the process, helping goods move more quickly from start to finish.
The technologies shaping societies and businesses today are laying the foundational groundwork for how trade will happen tomorrow. As the world becomes more interconnected through the likes of blockchain and IoT, information will flow more quickly between trading partners, enabling physical goods to more quickly move from departure to destination as well.
Emerging tech brings with it additional implications for what trade will look like in the future.
“New technologies can also significantly affect what we trade, who trades what and how we trade,” the WTO report noted. “The wide adoption of digital technologies is changing the composition of trade in different categories of services and goods, and is redefining intellectual property rights in trade.”
Additive manufacturing, also called 3-D printing, could factor into the intellectual property equation for brands creating digital design files of the products they make through the nascent production technology. The 3-D printing market could reach $22 billion by 2020, and have a $600 billion economic impact by 2025, according to the report.
WTO noted the likely downsides to the infusion of technology into critical areas of trade. “While the expansion of digital trade will entail considerable benefits, it is important to ensure that this expansion takes place under conditions that adequately address certain regulatory challenges,” the report said. “Issues concerning privacy protection and cybersecurity are likely to figure prominently in debates on the future governance of digital trade.”