Digital technologies could begin to have an even more important impact on the ways in which businesses across the world trade in the coming years, according to a report from the World Trade Organization (WTO).
Its flagship World Trade Report was released recently and stated that factors including Blockchain, artificial intelligence and the Internet of Things (IoT) could add up to 34 percentage points to trade growth by 2030, thanks to costs being streamlined and increased productivity.
This equates to two percentage points a year from 2016 onwards as digitalization spreads, the document suggested.
This could be especially beneficial for micro, small and medium-sized enterprises, as long as they have the ability to keep up with the adoption of new digital technologies.
The WTO pointed out that key benefits can come about as trading businesses put factors like better route planning and smart inventories to good use, while a system like blockchain could reduce the amount of time they need to spend on adhering to customs rules and logistics issues.
Meanwhile, the IoT may act to reduce storage costs by improving efficiency, something that could significantly reduce costs for many firms.
Digital technologies could also have an effect on what the world trades as well as how it goes about it, the WTO report said. For example, growing reliance on automation and robotics could lead to more of these kinds of products being shipped across the world, opening up new opportunities for exporters.
However, the document did acknowledge that this digital overhaul is not likely to be without issues. Those that struggle to keep up with the latest innovations for financial reasons may not be able to reap the rewards quite as much, for instance.
In order to get around these issues, the WTO suggested that international cooperation is likely to be warranted, with key initiatives like facilitating a favourable legal and regulatory framework needing to be undertaken by multilateral organizations.
Promoting digital inclusion and ensuring that the infrastructure is in place for information communication technology is going to be another key challenge that stakeholders will need to address going forward.
The report concluded that considerable benefits could be generated by the expansion of digital trade, as long as public policy challenges including privacy protection and inclusiveness are adequately addressed.
Roberto Azevedo, director-general of the WTO, said: "From the invention of the wheel, to the railways, to the advent of containerization, technology has shaped the way we trade. Today, this phenomenon is accelerating as never before.
"We are living through an era of unprecedented technological change. Some call it the 4th Industrial Revolution; others the New Industrial Revolution or even the New Digital Revolution. But the common theme is clear - this is a revolution."
He added that the WTO and other bodies have a duty to make this revolution work for everyone, so debates over emerging technologies cannot be shied away from.
Chief economist Robert Koopman agreed that digital technologies have the power to "transform the world economy more deeply than other technologies have before".
This comes after the WTO suggested that Blockchain "could well become the future of trade infrastructure and the biggest disruptor to the shipping industry and to international trade since the invention of the container".
Indeed, the technology - which is similar to a spreadsheet that is duplicated across a network of computers, but is also designed to be regularly and independently updated - has already been adopted on a trial basis by the US Customs and Border Protection to streamline the importing process as part of the verification of North American Free Trade Agreement and Central American Free Trade Agreement certificates.
As a business owner, becoming au fait with the technology that already exists can be a challenge, let alone having the opportunity to get to grips with new innovations.
For example, there is currently no data source from which up-to-date trade content such as export control commodity lists, exchange rates and other information can be centrally obtained. This means that you may have to consult many different data sources individually.
Export control compliance automation can also prove to be a challenging task for exporters, as requirements frequently change.
If you have been struggling with either of these or other issues, or want to discuss your own issues to do with technology, please do not hesitate to give MIC a call.
Our Global Trade Content Service can act as a melting pot for global trade content, while our Export Control Management (MIC ECM) software solution allows for the central management of all company transactions under export control law, for example.
We have a range of other products and solutions too, having focused on customs and trade compliance software solutions for 30 years. Our knowledgeable employees are ready to let you know how we can help you, so why not get in touch today?