Steve JurvetsonAs much as we focus on the day-to-day political and economic crises in the United States or Europe, we forget that business is truly global. There are technologies and trade and policies that affect every business and country that exist.
When we get better at transporting things and have greater access to markets, trade gets even more global, and technology and cooperation are really starting to push that. FedEx’s global trade policy magazine Access put together a list of the biggest trends in business, technology, and trade.
Driverless cars are coming far sooner than we thought
Access spoke to Wired Magazine co-founder and futurist Kevin Kelly, and asked him what would define trade over the next few years.
He replied: “I think in two years we’ll see certain parts of highway systems where you can turn your car over to the computer within certain parameters.”
The potential impact on the economy is massive. Congestion will cost the US an estimated $133 billion in 2020.
While the US lags behind, the rest of the world is moving forward with high speed rail
There are currently negotiations to create the world’s most ambitious high speed rail network. It could run from China to the United Kingdom, and over 17 countries in between. Parts are already operating, and the hope is to have a fully connected network by 2022.
Japan’s participation in the Trans Pacific Partnership could define 21st century trade in the Asia Pacific region
Japan’s recent bid to join the Trans Pacific Partnership trade talks could be a game-changer.
“A successful bid could be a big strategic gain for the U.S. and the Trans Pacific Partnership generally, Brookings fellow Josh Meltzer told us. “It would make it a much more significant trade agreement from a U.S. perspective and change the nature of the negotiations.”
The talks are essential for “developing new rules for 21st century trade in the Asia Pacific region, Melter says. “Those rules are things like digital trade and cross-border data flows, on statehood enterprise, on regulatory coherence, to name a few. And getting Japan in would be important because, from a rules perspective it would increase the potential for the TPP to ultimately become a free trade agreement A in the Asia Pacific region, which I think is the ultimate aim of all of the participants “
Watch out for growing logistics clusters
MIT professor Yossi Sheffi argues that a select few cities are making the investments and have the attributes to become “Logistics Clusters” and dominate world trade. He tells Access: “If you look at Panama’s five-year plan, they want to become more than just the canal. Chongqing in central China is another city to watch. And the German government just put 100 million euros into Dortmund, Germany, north of Cologne.”
The world needs to figure out how to consistently trade services
The United States is the world’s number one exporter of services, and is meeting with other leaders in Geneva to try and hammer out a legal framework.
There are still many barriers, Fedex Global Media Manager Jenny Robertson told us in an email interview:
U.S. services exporters encounter substantial non-tariff barriers (NTBs) around the world, which keep our services trade from reaching its full potential. Traditional barriers to services exports include sectoral prohibitions on foreign participation, foreign equity limitations, discriminatory regulatory requirements, lack of transparency, and nationality requirements for service providers. 21st-Century NTBs include restrictions on data flows, forced localisation, and unfair competition from state owned enterprise
An international services agreement that removes barriers could boost exports by $860 billion a year and create three million jobs.
Chinese megacities are going to be an even greater economic behemoth
Fedex’s Jenny Robertson tells us that “Nine cities will be connected by 150 major infrastructure projects. The megacity’s location in the Pearl River Delta creates a single manufacturing hub of 42 million people — four times the size of New York City.”
The merger will create the world’s largest city by 2018, and a massive concentration of economic power.
Infrastructure is a massive advantage, and countries will race to match Germany and Singapore
A survey from consulting firm Mercer found that Singapore had the world’s best infrastructure, but that three German cities came in the top five. The benefits are clear. Singapore is a massive global shipping and business hub, and Germany’s manufacturing power has weathered years of European difficulty.
Other countries will be looking to catch up. Big examples that will change global trade will include the Panama canal expansion, and massive investments by China in Guangdong and Shanghai.
Get ready for predictive GPS
GPS is already almost ubiquitous. Researchers at the University of Birmingham have created an algorithm that’s a sort of predictive GPS, it uses your phone combined with your friends to predict where you’ll be in a day’s time.
Social shopping may mean the end of exclusivity
More and more, shopping experiences, even online, are community based, centered around curation and a lack of friction. Everyone involved in commerce is going to have to figure out how to deal with a more frictionless and democratic ecosystem.
Free trade agreements are making the world more open
Access highlights three free trade agreements as particularly significant
- The U.S. South Korea FTA will make some 95 per cent of bilateral trade between the two huge economies duty-free over the next five years.
- The new U.S. Panama FTA removes tariffs that were as high as 81 per cent.
- The EU-Singapore FTA, settled in September, connects two economic powers and makes it easier for both to do business.
Smart glasses are going to hit the marketplace and change the consumer experience
Once the stuff of science fiction, wearable computers are going to be a fact of consumer life soon. Businesses need to use the experience with early adapters to figure out their advantage as the technology becomes more widespread.
The data explosion has changed everything, but we have no idea how to regulate it
Data regulation is “one of the least discussed, most urgent issues affecting trade.”
International trade policy needs a huge update to keep up with the pace of innovation. At this point, countries are being more reactionary rather than planning or innovating. One of the biggest things the world can do to grow the economy is come up with a framework that balances between respecting privacy, and giving business a break.
The financial crisis lead to massive infrastructure spending, and we’re still seeing the impact
CIBC World Markets, a Canadian bank, expects $35 trillion of global infrastructure spending over the next 20 years.
That’s on top of what’s already been spent. The amount of money that’s flowed into the global economy hasn’t been matched in size or speed since World War 2.
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