Logistics will become even more efficient as each element becomes trackable
The world is entering a third phase of globalisation that will boost trade, change the way companies work and improve the quality of life of millions of people, according to a new HSBC report.
‘Trade Winds: shaping the future of international business’ examines the key trade and business trends of the past 150 years and looks ahead to 2050.
It forecasts that total goods exports will reach USD68.5 trillion by 2050 – nearly four times the value of global exports in 2015 and more than 150 times that traded in 1950.
Total goods exports will reach USD68.5 trillion by 2050 – nearly four times the value of global exports in 2015
Developments in technology, public policy, operations and logistics will bring many benefits, according to the report: “This third wave of globalisation will take millions of people out of poverty, raise income levels and improve quality of life. Emerging economies will increasingly catch up with mature economies as economic prosperity is spread more evenly.
“For businesses there will be new opportunities – these include new ways of working, new business models and new skills requirements. Physical borders will become less important and how we define trade will change.”
Asia is expected to be a big beneficiary of these changes, with the region’s share of global exports predicted to reach 46 per cent in 2050, compared with 33 per cent in 2015. That shift is likely to see China extend its lead as the world’s top exporter, while India exerts increased power. Western Europe and North America are expected to see their shares of global exports decline but in absolute terms they will be larger than today.
Produced by Oxford Economics on behalf of HSBC, the research finds that the third stage of globalisation will be driven by continued industrialisation and a sharp drop in transport and communication costs. It predicts new markets will open up thanks to changes in trade policy, and that the cost of trade will fall.
Advances in technology will continue to trigger rapid change, driving the development of new products and business models. Companies will also establish better ways to manage their businesses and distribute goods more efficiently.
Stuart Tait, Global Head of Trade and Receivables Finance, HSBC, says: “There will be a huge change in current supply chains. Logistics will become even more efficient as each element becomes trackable. Currently there is waste in the production cycle.”
The report highlights several other developments that will influence trade over the next four decades:
There will be more multilateral efforts to counter climate change, which will lead to advances in fuel efficiency, renewable energy and energy storage
The development of 3D printing will gradually revolutionise the way customers access goods, enabling customised ‘build to order’ production
Trade flows will increasingly relate to the movement of services rather than products, in the same way that films, books and music are increasingly sent digitally
The rise of intelligent technology will mean devices will increasingly be able to interact with each other
Download the ‘Trade Winds: shaping the future of international business’ report from the HSBC Global Connections website.