Emerging trends in digital technology and their impact on e-commerce

Event report

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The session was moderated by Ms Marilia Maciel (Digital Policy Senior Researcher, DiploFoundation), who launched the discussion by reflecting on how new technologies can be potentially beneficial or disruptive for commerce. She reminded the audience that the phenomenon of ‘digital convergence’ first started with the introduction of networks and has now arrived at the point at which physical, digital and biological systems are almost integrated through technology. She presented possible positive contributions of new technologies to trade (e.g. enhanced personalisation of trade, quicker analysis of price changes); however, she also considered that digitalisation poses new challenges.

Mr Adam Schlosser (Project Lead, Digital Trade and Cross-Border Data Flows, World Economic Forum (WEF)), first reminded the audience that the first industrial revolution consisted in the use of steam and water to mechanise production. The second revolution started with the use of electrical power to create mass production and the assembly line, while the third began when electronics and information were used to automate production. He suggested that the passage to the fourth industrial revolution had happened with the Internet, with the shift from one single computer to a network of computers. He then considered some practical applications of new technologies to trade. Firstly, he considered that blockchain technology could be beneficial, for example, when tracking food and streamlining production. In particular, a combination of such technology with artificial intelligence (AI) can promise a high level of reliability: since every step of the chain is verified and confirmed by each actor of the chain, the final output is almost impossible to falsify. Secondly, a broad use of Big Data, AI through the Internet of Things (IoT) can increase efficiency and transparency in the shipping process.

Dr Raymond Saner (Professor, CSEND/Diplomacy Dialogue, Geneva), considered the possible disruption that new technologies can cause to trade. In particular, he affirmed that the social dimension must also be taken into consideration when new technologies are introduced because a society’s ‘resistance to change’ and possible externalities on the job market can seriously hinder this process. In particular, by looking at the implementation of the Trade Facilitation Agreement (TFA) in Jordan, he stressed that cost savings and security risks need to be balanced carefully. This is because implementation of the TFA has extensive technical requirements, the modernisation of an entire IT system in a strict time frame which is thus particularly demanding for developing countries.        

Dr Marion Jansen (Chief Economist. International Trade Centre (ITC)), considered that the world is not well prepared for such a technological change. For example, in the ‘New Pathways to E-commerce” report,  it emerged that two thirds of the small and medium enterprises (SMEs) in developing countries that were surveyed that ‘have considered or tried to enter into global trade’ had then renounced it. She asserted that the introduction of new technology should be centred on two main pillars: security and trust. On the one hand, despite its promising applications in trade, blockchain technology has been shown to be vulnerable in some of its aspects (such as bitcoin) as it was susceptible to fraud. On the other hand, the transparency element is lacking, as the algorithms deployed by AI appear obscure to control and to understand for the vast majority of people. Like Saner, she also warned about the introduction of new technologies that lack trustworthiness and transparency. Finally, she also considered that the lack of national regulations on e-commerce could be beneficial as this might leave space for possible regulation at a multilateral level.

Mr Rashid S. Kaukab (Executive Director, CUTS International, Geneva), focused mainly on competition. He highlighted two fundamental issues in the discussion. On the one hand, the gap between ‘those who are much ahead and those who are left behind’ in access to the Internet is still an important factor to take into consideration when assessing the introduction of new technologies. Moreover, the assumption that the digital sphere is open and accessible for all is misleading because the trend tends to be anti-competitive. On the other hand, the definition and identification of the market is also problematic.  Taking a geographical perspective, the market is widening; however, at the small/local level it is also narrowing down.  This has posed serious challenges for competition authorities which will have to balance the introduction of new regulatory approaches with practical concerns (e.g. timely intervention).
 

by Marco Lotti