The World Economic Forum (WEF) recently released the Mapping TradeTech: Trade in the Fourth Industrial Revolution report, which provides a comprehensive overview of the impact of emerging technologies on the global trade system.
The first-of-its-kind report focussed on how digital technologies and innovations can enable global trade to be more efficient, inclusive and equitable.
A WEF press statement noted that the report was developed in cooperation with more than 50 global industry experts, policymakers, academics and civil society leaders.
According to the report, “technologies and innovations have interacted with trade for thousands of years, from advancing transportation methods to the advent of the container to the emergence of fragmented production networks”.
It highlighted that TradeTech – described as the set of technologies and innovations that enable trade to be more efficient, inclusive and equitable – is fundamental to harnessing the innovations of the Fourth Industrial Revolution to support the public good.
“TradeTech’s importance is shown by the disruptions that technologies are causing to business models, the reconfiguration of value chains, efficiency gains, the achievement of sustainable outcomes and the inclusion of micro-, small- and medium-sized enterprises (MSMEs) in trade. Yet less positive consequences also exist and need to be mitigated to ensure TradeTech works for all.”
The report explained that the forum’s global survey aimed to understand how firms are using technologies in trade and to assess which technologies will have the most impact on global trade going forward.
The survey insights are based on 340 responses from firms of different sizes across sectors and from the world over. All respondents were from companies currently engaged in international trade operations.
The survey results list the most transformative technologies for trade as follows: Internet of Things (IoT) in supply chain (59 per cent); digital payments (56 per cent); e-commerce platforms (53 per cent); cloud computing (52 per cent); 5G (49 per cent); artificial intelligence (AI) / machine learning (45 per cent); digital documentation / e-signature / digital identity (44 per cent); smart border systems (38 per cent); Blockchain / distributed ledger technology (37 per cent); and robotics and automation (36 per cent).
Also listed are: digital services other than digital payment (34 per cent); open supply chain information systems (34 per cent); virtual reality / augmented reality / mixed reality (26 per cent); 3D printing / additive manufacturing (19 per cent); and others (one per cent).
The report also looks at TradeTech as well as some of its specific applications in the trade eco-system in terms of time to impact.
Technologies which are thought to have their full impact on trade the soonest are e-commerce, digital payments, cloud computing, IoT, digital services, digital documents and 5G. Meanwhile, technologies expected to impact trade in the longer term are robotics, virtual reality (VR), 3D printing (3DP) and AI.
The report stated that TradeTech has the potential to facilitate and promote further international trade by lowering barriers for companies to enter new markets. It noted that major TradeTech gains originate in good coordination between the different actors in supply chains.
“TradeTech, especially in its second layer, allows holistic decisions that can result in efficiency and environmental advantages for the whole value chain. Yet unintended consequences in terms of job displacement, competition and techno-nationalism trends require attention.
“TradeTech’s impact will depend on how data and tech interoperability are addressed, regulations are harmonised, and inclusive access to close the digital divide, also present in the trade space, is ensured. To deliver on TradeTech’s promise, action is needed to build the trust required for supply chain transparency, to promote cooperation in tech regulation, to drive a trade facilitation agenda around interoperability, and to provide training for upskilling and reskilling workers,” it said.
The report added that the COVID-19 pandemic has significantly accelerated the adoption of digital technologies and opened a window of opportunity to drive tech innovation in trade. “The moment should be seized to use TradeTech to make global trade more efficient, inclusive and equitable.”
Meanwhile, Head of Digital Trade at WEF Ziyang David Fan highlighted, “On the one hand, TradeTech creates benefits such as efficiency gains, new digital products and services, and positive environmental impacts. On the other, TradeTech may pose challenges such as fragmented regulations, lack of data harmonisation and a widening digital divide.
“Businesses and policy-makers have to work together in order to fully unlock the potential of new technologies for trade.”
Meanwhile, Secretary-General of the World Customs Organization (WCO) Kunio Mikuriya said, “During the COVID-19 pandemic, automated clearance systems for issuing declarations and effective risk management as well as non-intrusive inspection equipment have made a significant difference to customs on the ground.”
The report is a continuation of the forum’s previous work on blockchain for trade, trade and supply chain finance and 3D printing for policymakers. More than 50 experts from the public and private sectors from all regions contributed to the report.
The statement added that the WEF will continue to lead this multistakeholder community in advancing TradeTech to enable a more efficient, inclusive and equitable global trading system for all.