The New Global Trade is Booming: Are You Ready?

Much has been written about how global trade is stalling, particularly since the U.S. Presidential elections. Some say that world trade has reached its limits; the evidence from the International Monetary Fund indicates that whereas trade from 1985 to 2007 grew at twice the rate of GDP, it has barely kept pace over the past four years.

There's another way to look at the data. Firstly, trade grew more rapidly than GDP for many decades because of the initial boost from the implementation of the infrastructure, agreements, and other enabling elements of free trade since the Bretton-Woods conference in 1944. There is plenty more room for trade agreements in the future, but as an example of the pervasiveness of global trade, with 164 countries part of the General Agreement on Tariffs and Trade, most countries have already made at least some basic move to join the global economy. Secondly, commodity prices have dropped; once corrected for the change in pricing, volume for many commodities such as oil has actually gone up.

Most importantly, many have overlooked that there's one form of global trade that continues to boom, growing volume by 45 times since 2005: the digital flows of data and information, which may already contribute more value than the flows of goods. Data from a variety of sources indicate that these digital flows likely contribute to a harder to measure but continued integration of the global economy.

Companies that continuously innovate their organizations and invest in talent and knowledge management will be best positioned to benefit from the future world of integrated data flows, especially in an era that may see marked increase in protectionist policies. No amount of protectionism will stop the sharing of ideas and knowledge, making them good investments.

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