The World Economic Forum (WEF) has claimed in a report that distributed ledger technology, such as blockchain, could generate US $1 trillion for the global economy by 2025.
The whitepaper, ‘Trade Tech – A New Age for Trade and Supply Chain Finance’, has found that the digitalization of trade offers ‘potentially huge benefits’ to global trade flows, such as import and export times being cut by 44%.
This could benefit economies in Asia the most, particularly small and medium enterprises (SMEs) as multinational corporations, especially in developed economies, already have established supply chain processes.
The #SPSC18 e-Book – 'Reconceptualizing The Port' – goes into greater detail about the importance of smart technology in the maritime industry
Emerging economies also stand to benefit, according to the WEF, because greater digital implementation will help them get access to credit.
It predicts the trade financing gap, the difference between credit given to exporters in emerging markets compared to developed ones, will increase from $1.5 trillion, as of 2017, to $2.4 trillion by 2025 unless smart technologies are utilised.
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In Asia and the wider Pacific, smart technologies could increase exports by as much as $257 billion annually.
Additionally, if smart technologies can bring down border administration and telecom and transport barriers, the WEF has forecasted that global GDP could increase by as much as 5%, with world trade rising by 15%.
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Its whitepaper stated: “Individual firms and governments are starting to digitalize and automate their trade and supply chain processes by deploying relatively new technologies.
“This includes distributed ledger technology, often referred to as blockchain, which is associated with the protocol for the digital currency bitcoin.
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“As one area of trade and supply chains, financing would reap huge benefits from emerging technologies.
“Globally, demand is strong for supply chain finance. Bain & Company estimates that demand is expanding by 5-15% a year in the Americas and Western Europe, and 10-25% in Asia, with food and retailing among the most active industries.”
If you'd like a unique, expert insight into how smart technologies are changing the global economy, send a question to SPSCT speaker to Wolfgang Lehmacher from the World Economic Forum
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