At AREA42, we strive for a world with frictionless trade because we believe that the free exchange of goods, services, communication and ideas is better for everyone.
Striving for frictionless trade is not new. There has been friction from the very beginning. The discovery of the earliest trade ledgers from Mesopotamia 7000 years ago (i.e., around 5000 BC) detailed that the biggest friction point was the lack of a formalized currency.
One of today’s biggest friction points is the gap between trade and policy and the fact that most trade is still heavily dependent on paperwork. There are so many rules that govern trade, some that are extremely rare edge cases. There are also too many intermediaries who only serve to delay and complicate the process.
Covid-19 has only exacerbated these issues. It has shown the need for customs and all supply chain stakeholders to not only digitise their procedures but to apply emerging technologies like blockchain, Artificial Intelligence (AI), biometrics and the Internet of Things (IoT). This should make trade not only more efficient but should also prevent illegal trade and trafficking. Collectively, all these innovations are called TradeTech. At its core TradeTech is a new industry that leverages technology to improve the trade of goods and services.
The World Economic Forum (WEF) launched a global survey in June 2020 to find out how firms are employing TradeTech and assess which ones are having the greatest impact on global trade. They found that digital platforms and documentation, digital payments, cloud computing, IoT and 5G were the most effective for short-term gains. The longer-term gains would be from robotics, Virtual Reality (VR), 3D Printing and AI. Many of these technologies shift the focus from analog to digital and eventually even eliminate the need for some products to be transported by traditional means.
Technology has always advanced trade–since the domestication of horses in 4800 BCE. Now we have more sophisticated ways to move goods and services but the general thought is the same. The faster and more efficient trade becomes, the less expensive and more equitable it is for us all.
This is why we at AREA42 coined the term TradeTech and have partnered with the WEF to accelerate the adoption of TradeTech worldwide–because we can’t continue this movement alone. This is a global effort. Together with the WEF, we are continuing to transform the industry for the greater good.
You can read more about all of this in the WEF report, Mapping TradeTech: Trade in the Fourth Industrial Revolution with contributions by our very own Florent Bardy, Lab Manager at AREA42.