Is your business ready for Digital Trade

In World Economic Forum’s ‘Trade Multistakeholder Conversation’ Google Vice-President for Government Affairs and Public Policy Karan Bhatia said, "what's really needed is a global trade architecture that's responsive to the new opportunities" afforded by the digital age.

Digital trade system has become more relevant in a world that is searching for a sustainable trade solution in the post pandemic world. A glimpse at the history of pandemics will show how every pandemic has reshaped people’s views on business and trade. For example, e-commerce boomed in China during the 2002-2004 SARS outbreak and companies like JD and Alibaba became market leaders owing to their digital B2B trading system.

Compared to the Covid19 pandemic SARS was a relatively small epidemic. Nevertheless, radical changes are anticipated in global trade after the pandemic, as it is already leaving a long-lasting mark in the global economy. According to predictions by experts the traditional trading system won’t be the same again. 

Meanwhile, public health experts predict pandemics to be more frequent in the future. When the next one appears (if it appears) breaking the international human to human contact network will on top of the list of priorities. Hence, it is expected that the international business framework will undergo significant modification during the upcoming years. 

During this modification, policymakers will seek for sustainable ways to keep the international trade smooth while keeping the human movement restricted during the time of a pandemic. Countries may lean into the digital trading system as it’s a proven way to keep international supply chain ‘almost contactless’.

Digital trading will get further traction because of its cost-effective nature. In a 2018 working paper of United Nation’s Economic and Social Commission for Asia and the Pacific, authors (Yann Duval, Chorthip Utoktham, Alexey Kravchenko) concluded that, “the estimated impact of a full implementation of Digital TF is associated with a 26.2% decrease in international trade costs in the Asian and the Pacific region.” The same paper also states that full implementation of digital trade protocol may save Bangladesh up to 30% of the international trade costs.

The findings are echoed and backed by experts. Jesus Seade, Undersecretary for North America, Secretariat of Foreign Affairs of Mexico said during the Trade Multistakeholder Conversation that, “Digital trade is an opportunity to expand availability, choice and lower the price.”

It can be said that, in the post-pandemic world digitization in business of any size and nature can save money and enhance efficiency. Adopting data driven and digitally operated business models will effectively help businesses prepare for the challenges of these dire situations.