Many believe that technology will be vital in the future of global trade
New research from Economist Impact and DP World has found that business leaders remain optimistic for global trade in 2024, even as 2023 saw challenges brought by geopolitical tensions.
The latest version of the annual study titled Trade in Transition showed that while there were concerns about the current landscape of the global trade hampering its growth, the optimism of executives was led by the belief in technology’s role in transforming the efficiency and resiliency of supply chains.
“The findings in this report reveal a remarkable optimism, despite businesses having to operate in an increasingly uncertain environment,” said Sultan Ahmed bin Sulayem, group chairman and CEO at DP World.
The study found that heightened geopolitical risk in the global trade has led to businesses attempting to reduce risks in their supply chains through exploring friendshoring or dual sourcing. More than a quarter opted to have fewer suppliers.
There was also an increase in the concerns of political instability, trade friction, and global fragmentation possibly hampering the growth of global trade.
About a fifth of businesses expressed concern about tariffs in key markets as 22 percent emphasised the challenges brought by political instability in their sourcing markets. About 23 percent were concerned about the heightened geopolitical uncertainty.
“In 2024, amidst heightened geopolitical risk and the rising impact of climate change, there is an observable increase in the variability of approaches businesses are taking to their supply chains,” said John Ferguson, global lead, new globalisation at Economist Impact.
“What's clear is that technology is being implemented across supply chains to ensure business can adapt faster and smarter,” he added.
A growing use of AI
In the study, about 98 percent of company executives were already using AI in at least one aspect of their supply chain operations.
About a third of businesses have utilised AI in reducing their overall trade operation costs as well as enhancing resource and supply chain planning, with over a third of companies saying that the use of digital tools for inventory management were the most effective way to cut back on overall trade and supply chain costs.
A third of surveyed executives stated that they will be focusing on advanced automation and robotics for the efficiency of their logistics operations. About 28 percent will be utilizing blockchain to enhance traceability and data security, while 21 percent will be incorporating AI, big-data analytics, and predictive analytics for real-time insights and disruption forecasting.
The Trade in Transition study was commissioned by DP World and led by Economist Impact involving 3,500 company executives. It revolved around the perspectives of trade experts and senior executives.
