Big Data Streamlining International TradeBy Alessa Flores | Fri, 10/23/2020 - 15:38
People say that what cannot be measured, cannot be improved. Big Data has come to revolutionize the world as we know it and has become a crucial asset for companies according to Oracle. Big companies and the value they offer comes from the data they generate and how they analyze and use it to increase efficiency and develop new products.
The Organization of American States (OAS) explains that one of the catalysts for international trade has been globalization due to the transcendental change it has generated in the world economy. Similarly, international trade has led to the birth of international markets and interdependence between countries, both in production and in resource allocation. The reality that prevails today is that companies must compete with others all over the world. Also, they have to transform their comparative advantages into competitive advantages to survive in this interconnected and globalized world, explains OAS.
Big Data offers companies the possibility to analyze markets from another perspective and know in detail the trends that move them. Internacionalmente considers that Big Data and international trade will be two inseparable elements in the future.
Big Data is streamlining international trade faster than we can perceive it. The International Monetary Fund (IMF) points out that the rapid growth of the world economy is due in large part to increased international trade, but also to technological developments and the reduction of trade barriers. “Over the past 20 years, the yearly growth of world trade has averaged 6 percent. But trade has been an engine of growth for much longer,” explains the IMF.
A McKinsey Global Institute report estimates that in just seven industries, Big Data could generate an additional US$3 trillion in value each year, while also reducing traffic jams, providing easier price comparisons, better matchmaking between institutions and students and improving the world economy in ways we never imagined.
In particular, the World Economic Forum (WEF) believes that Big Data will transform global trade, starting with logistics optimization and predictive analytics that will enable businesses to be more efficient. With Big Data, businesses can predict demand in a much more efficient way and better track their products and services, as well as their performance in domestic and international markets. Big Data, however, is only the start of a new business revolution, as other technologies such as advanced robotic manufacturing, 3D printing and AI are expected to disrupt the way products are manufactured and marketed in the future, WEF asserts.
Growth, however, has not been equal for all countries in their process of integration into the globalized economy. For a number of developing countries in Asia and, to a lesser extent, Latin America, progress has been impressive. However, the poorest countries have seen their share of world trade declined substantially and they are at risk of further marginalization, especially in Africa and the Middle East, if their trade barriers are not brought down, according to the IMF.