Global trade remains an important factor in connecting the nations of the world and preserving relations between countries. Historically, waves of development and industrialization have depended on the accessibility of materials and goods with governments and businesses carrying out important imports and exports to grow economies. Although the first wave of globalization was unfortunately driven by colonialism, post WWII efforts and the development of the UN and international organizations have changed the rules of engagement regarding global trade. In addition to trading tangible goods, trades of services such as insurance, tourism and legal services have also become a recent phenomenon.
Overall, global trade was valued at about $28.5tn in 2021, rising above even pre-pandemic levels. This is about 43 times the size of global trade in the 1950s, during the second wave of globalization. Despite this, world trade forecasts predict a slight decline of growth attributed to emerging crises between world powers and a possible recession. Hence, governments and businesses must find ways to guarantee success and reduce the impact of possible setbacks to their populations. Currently, most of the challenges to global trade are found in sociocultural, political and legal differences between regions. Other issues include problems in communication and supply chain management. Although some of these challenges will require mediation and concessions between governments, other aspects can be improved by integrating technological innovations into the global trade industry.
Artificial intelligence and Global Trade
AI holds great promise for facilitating global trade and providing better opportunities for governments and businesses to manage their business activities. Several areas that have the potential to be improved by artificial intelligence technology include:
Logistics: AI systems can be employed in tracking the movements of goods and services across production and transportation lines. Several aspects of the trade process all the way from ordering, production, storage and delivery can be optimized using advanced technologies. For instance, predictive analytics can be employed to track market trends and determine what products will be in demand during a particular period. The systems can then be adapted to ensure availability of such products and services, thus improving the market visibility of brands that employ such technologies. AI systems can also be employed in building improved production models and optimizing the process of providing goods.
Transportation: AI systems with their high capacity for analysis can be important in mapping routes and determining the safest, quickest and cheapest routes for delivering goods to customers. In addition, automated vehicles are revolutionizing movement of supplies on manufacturing plants and contributing to increased speed of production processes. AI can also be applied in organizing sea, air and land ports for quick movement of goods and provide a business-friendly environment for operators.
Risk management: AI can be used to analyze previous market trends and provide advice on the viability of certain trade deals and brands. Both governments and businesses can project the outcomes of business deals based on economic forecasts and this can help to ensure that the best possible for all parties are implemented.
Digital platforms: Digital platforms are becoming increasingly popular for the exchange of goods and services such as design, advertising, content creation and others. Although relatively new, the digital platform market is making great strides in connecting people for the purpose of exchanging various skills and services. To improve this, AI can be used on these platforms to filter and personalize recommendations for users to quickly access services across borders.
Payments: The complexity of payments associated with various regions and dependent on different exchange rates and finance laws can be detrimental to the growth and development of global trade. To solve this, AI can be used to develop payment systems that are effective yet secure to facilitate quick payments. It’ll be important that such systems are easy to use while adhering to the peculiarities of the regions where they are applied and AI can come in handy for designing models that achieve those aims.
Despite the many avenues available for AI to improve the state of global trade, it is important that concerns around the safety of AI systems be well examined to ensure security for governments, businesses, customers and other stakeholders in global trade. In addition, global trade is an area of employment for millions across the globe and these workers must be well integrated and not alienated by the introduction of technology. If properly applied and monitored, there is no doubt that artificial intelligence holds much capacity for bringing global trade to unprecedented levels of success, thus improving the economy of nations across the globe.