Trade’s Tech Revolution

Estimated reading time: 3 minutes

A fridge that texts you where to buy the cheapest milk; a washing machine that orders washing powder online when it runs out; and a jet engine that tells engineers when it needs repairing and lists the parts to order. It sounds futuristic, but these intelligent machines already exist.

Technologies are helping to change the way businesses operate – and altering the way we trade goods and services around the world.

Over the next few decades we expect a rising global population, new trade agreements, better logistics and improvements in business operating models to fuel a sharp rise in exports. Technology too will play an increasing role in a new phase of globalisation.

Across the world, companies are investing in technology to reduce waste and cut costs. They are looking to reduce their impact on the environment by redesigning products, streamlining processes and switching to renewable energy sources.

The internet, meanwhile, is paving the way for companies to gain a global audience at a speed that was not possible in the past. It took radio 38 years to achieve an audience of 50 million – a target achieved in just three years by the internet and in a single year by the social networking site Facebook.

The internet has created an environment in which “micro-multinationals” can thrive. In the past, companies generally had to reach a certain size to expand overseas. But thanks to the web, it is far easier for small companies specialising in niche products and bespoke services to go global too. The internet and free movement of data are changing the way trade occurs. Some goods that were previously shipped are now delivered digitally. In the UK, for example, more than a third of video entertainment is now downloaded or streamed on-demand, rather than bought in physical format, according to the UK Video Association. An increasing proportion of international trade will be in such services, ordered and delivered using just an internet connection.

Of course, demand for physical goods will continue. But here too technology is playing a greater role, helping to make it more efficient to distribute products and easier and quicker to transport goods to new markets. It is enabling engineers to design more fuel-efficient ships and planes, cutting transportation costs. Meanwhile, ports and airports are investing in automated customs and documentation to speed up shipment of goods.

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