Digital Legacies: Trade

Julius Wiedemann traces the evolution of links between trade and international relations, arriving at their current manifestations in the modern digital world.

by Julius WiedemannPublished on : Jun 08, 2021

By many accounts, trading is one of the most powerful tools for peace. When people depend on each other, and more than that, on each other’s supplies, an atmosphere of peace is necessary to conduct business but also in normal life. In this case, trading becomes an instrument to avoid conflict, or better, for conflict resolution. Even though the growth of global e-commerce has decelerated to ca. 16 per cent in 2020 (compared to 22 per cent) globally, its influence is becoming part of the backbone of trade worldwide. With about four trillion USD in 2020, the world has become a non-stop pipeline of supply chain being reinvented every day. Almost one fourth of the e-commerce generated in the world happens in the US, which saw a growth of over 40 per cent last year. Amazon alone is responsible for about a third of this growth. E-commerce represents about 20 per cent of the total retail sales in the world.

In many cases, trading has become a strong incentive to avoid conflict | Digital Legacies by Julius Wiedemann | STIRworld
In many cases, trading has become a strong incentive to avoid conflict Image: Courtesy of Julius Wiedemann

Of course, political issues have also to be considered. In a paper published by International Alert named “Addressing the economic dimensions of peace building through trade and support to private enterprise", written by Jessie Banfield, Canan Gunduz, Charlotte Vaillant, the authors say that “like all interventions in conflict affected or threatened countries, therefore, the pursuit of economic development must be informed by a sound analysis of the conflict, an understanding of the interests, agendas and perceptions of relevant actors and an appreciation of the impacts it may have, particularly on vulnerable groups".

E-commerce now accounts for 20 per cent of all retail sales in the world, with much of it coming from the US | Digital Legacies by Julius Wiedemann | STIRworld
E-commerce now accounts for 20 per cent of all retail sales in the world, with much of it coming from the US Image: Courtesy of Julius Wiedemann

However, it also states that “Putting peace building at the centre of its range of economic development and trade policies could notably contribute to greater policy coherence for development, but also help support the kind of economic growth which can help societies and regions permanently emerge from violence and war". Wrong policies can of course always be damaging, even if they start with good intentions. Studies have shown for example that economic growth, generating more truck traffic in Africa, has also increased the number of AIDS cases in some countries.

The economic interdependence within global commercial corridors is a valuable tool for diplomatic relations, with peace serving as its focal point | Digital Legacies by Julius Wiedemann | STIRworld
The economic interdependence within global commercial corridors is a valuable tool for diplomatic relations, with peace serving as its focal point Image: Courtesy of Julius Wiedemann

Economic interdependence is a key aspect for maintaining good diplomatic relations. When one side understands that the other is more efficient in producing something, and can rely on a supply chain, it is not advantageous to compete. But for the supply chain to work, peace becomes the central point of commercial corridors.

Entire areas such as user interface design, artificial intelligence, machine learning user experience, and marketing have relied heavily on e-commerce to develop. There are now software companies specialised in micro areas, such as the validation between a credit card operation and a bank. But even solutions that look quite niche in some areas, mean having to deal with billions of transactions every day. A single second of gain in a transaction means millions of dollars saved at the end. Every possibility of efficiency has to be looked at. Every single corner of the entire process of e-commerce has to be scrutinised in order to improve.

E-commerce realms have bred innovation in micro-areas such as transaction validation as a consequence of the rush for greater efficiency | Digital Legacies by Julius Wiedemann | STIRworld
E-commerce realms have bred innovation in micro-areas such as transaction validation as a consequence of the rush for greater efficiency Image: Courtesy of Julius Wiedemann

Visually, websites have changed dramatically. We have now almost returned to the simplicity of the websites of the early 2000s. What matters now is less about content and complex and entertaining presentations, and much more about how you can get what you want, as fast as you can imagine, as efficiently as you have never seen before, for the right price, and delivered to you at no time. Interactivity has been taken to its utmost simplicity.

Websites and mobile application design have been optimised to create a user experience that is as direct and simple as possible | Digital Legacies by Julius Wiedemann | STIRworld
Websites and mobile application design have been optimised to create a user experience that is as direct and simple as possible Image: Courtesy of Julius Wiedemann

Finally, trade is not just a bounce online retail that we see every day, such as Amazon, Walmart, and other giants. It comprises a lot of smaller stores and brands that understood that their success is about communicating with the final customer. It is all about creating a community right now. Even when brands owned stores, brick and mortar, establishing a relationship was very complicated and expensive. And still is. The internet came to create a possibility of a deeper relationship. And that goes both sides, because customers can also complain much easily. Let alone boycott. And a consequence is that if you are an online retailer, and if customers don’t like what they see, they will never come back. And they can easily engage others to follow suit. Ultimately, digital media created the obligation of social commerce, which will intensify in the next years. Relationships now are much more than the bridge to peace. They are also the bridge to any success selling something.

Read more from the series Digital Legacies where our columnist Julius Wiedemann investigates the many aspects of digital life.

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