Impacts of techno-nationalism on TradeTech adoption / Emerging data sharing initiatives (Mapping TradeTech: Trade in the Fourth Industrial Revolution - World Economic Forum - December 2020)

" Impacts of techno-nationalism on TradeTech adoption

In past years, the trend has increased among governments to seek to “cleanse” supply chains of critical technologies due to national security or other concerns, including telecommunications and video surveillance technologies supplied or developed by certain competitor nations and perceived adversaries.This has led to the blacklisting of key technology suppliers, significant disruptions to the tech supply chain and strict government procurement restrictions. 

Governments are also intervening to restrict outbound flows of “critical technologies” under export controls, sanctions, trade secret laws and data privacy regulations, among others. For example, in 2018, the US Congress passed the Export Control Reform Act mandating an interagency review and the identification of “emerging and foundational technologies” not currently restricted for export. These can include machine learning, AI, data analytics, logistics technology, quantum computing and others.

As a prime example, the future export potential of 5G technology from China to several jurisdictions hangs in the balance due to both blacklisting by potential purchasing nations and increasingly restrictive Chinese technology and export controls.

In some cases, governments push to create opportunities for local technology champions through state subsidies and preferential treatment, despite their discriminatory nature.

In this increasingly fragmented world, multinational companies (MNC) are caught in the middle of growing tensions between market interests and national security grounds. Some MNCs are responding by redesigning their supply chain networks and accelerating TradeTech adoption to experiment with new risk management tools, such as microscopic RFID technology that could be used to trace supply chains involving restricted technologies.

Tensions around technology will have implication not just in their trade but in overall trade. This is the case as value chains become more knowledge intensive, in part thanks to embedded technology. Only 18% of trade in goods is driven by labour costs, while knowledge-intensive goods and services account for half of all cross-border flows and are growing faster than labour- or capital-intensive flows.

Emerging data sharing initiatives

Data sharing across the supply chain would produce cost efficiencies and transparency. Although the collective gains are clear, how each player will benefit individually is a battle that feeds into a general reluctancy to share data even within the same supply chain.

Yet the appetite and willingness to share data and data insights are shifting in some arenas. Common purpose initiatives that might accelerate recovery from a pandemic that impacts trade, supply chains and livelihoods can be seen as incentive to collaborate. For example, logistics and consumer companies are collaborating with public bodies on a new initiative to support humanitarian response activities. The initiative entails establishing an open-source visibility tool, comprising elements of near-real time, aggregated and anonymized data from across the global essential goods and transport supply system, with no commercial purposes. Data sharing initiatives in trade facilitation are also prominent. For instance, ASEAN Digital Trade Connectivity aims to connect all trade facilitation actors into a single platform across all 10 member states, building on existing efforts of the National Single Window and ASEAN Single Window initiatives.

Efforts to create commercial data marketplaces are also being explored. For instance, Ocean Protocol and dexFreight co-built a blockchain-powered logistics data marketplace for the transportation and logistics industry that enables companies to aggregate and monetize operational data, in a cost effective and secure manner. The marketplace helps sellers and buyers put a price on data, such as shipment bookings with origin-destination and associated freight charges. Access to aggregate data in logistics can provide efficiency and environmental gains.

These efforts are bolstered by a maturing wave of solutions enabling and incentivizing data sharing, while ensuring privacy and security, managing diverse regulatory requirements and protecting commercial interests.For example, privacyenhancing technologies such as decentralized learning and homomorphic encryption are enabling value creation by helping businesses share data and insights, or conduct a joint analysis without exposing the raw data. The availability of data transfer mechanisms is key to ensure free data flows with trust across jurisdictions." 

Source : Mapping TradeTech: Trade in the Fourth Industrial Revolution