Tech to boost trade by 34% by 2030: WTO
Written by Peter Walker
Digital technologies - namely the Internet of Things (IoT), artificial intelligence (AI), 3D printing and blockchain - will increase trade growth by up to 34 per cent by 2030 thanks to lower costs and higher productivity.
However, they could also create a challenging environment for those seeking to keep up with the latest innovations, according to the 2018 edition of the World Trade Organisation’s flagship World Trade Report.
Global trade is projected to grow by an additional two per cent annually between 2016 and 2030 as a result of digitalisation, falling trade costs and the increased use of services. This corresponds with a 31-34 per cent higher trade growth over 15 years.
The report also found that the reduction in trade costs could be especially beneficial for micro, small and medium sized enterprises (MSMEs) and firms from developing countries, provided they have the ability to keep up with the adoption of digital technologies.
In the best scenario, developing and least-developed economies' share in global trade is predicted to grow to 57 per cent by 2030, from 46 per cent in 2015, whereas if they cannot keep up, this share is predicted to rise to 51 per cent.
The report stated that digital technologies can unlock savings, such as through better route planning, autonomous driving and smart inventories made possible by artificial intelligence and robotics. "Blockchain solutions can reduce time spent on customs compliance and logistics," it read. "The Internet of Things can help to improve operational efficiency through better preventative maintenance of machinery and products."
The WTO also stated that digital technologies can significantly affect what the world trades, giving the example of remote-controlled robotics leading to the emergence of new services such as telesurgery - where medical procedures are conducted remotely using advanced robots.
The report argued that new technologies are likely to change the established ways the world trades, with comparative advantages predicted to change across economies. AI, 3D printing and advanced robotics could reduce the role of labour as a source of comparative advantage, while factors such as the quality of digital infrastructure and market size might become more relevant. 3D printing may also reduce the need for outsourced assembly, the number of production steps and other factors related to global value chains.
The WTO also suggested that certain areas warrant international cooperation, including key initiatives being undertaken by multilateral organisations, such as facilitating a favourable legal and regulatory framework, competition-related issues, intellectual property rules, supporting MSMEs and promoting digital inclusion.
The report concluded that, overall, the expansion of digital trade holds the potential to generate considerable benefits if it takes place under conditions that adequately address important public policy challenges. “Issues concerning inclusiveness, privacy protection and cyber security are likely to figure prominently in debates on the future governance of digital trade,” it added.