Global exports to quadruple by 2050 with economic upturn on the way
by Kylene Casanova
A report produced by Oxford Economics on behalf of HSBC forecasts that total goods exports will reach $68.5 trillion by 2050. This is nearly four times the value of global exports in 2015 and more than 150 times exports in 1950.
'Trade Winds: shaping the future of international business’ looks back over the key trade and business trends of the past 150 years and looks ahead to 2050.
The report suggests that, following the downturn initiated by the last global financial crisis, global trade is about to turn a corner and that the next wave of growth will be driven by technology. It states: “Although there remains downside risks to the outlook, the next few years should carry the global economy into the next wave of globalisation, critically underpinned by sophisticated and pervasive digital technology that reduces international trade barriers, improves communication between cultures, levels the playing field for entrepreneurs and startups, and forms the foundation for an “always-on” global economy.”
Economists refer to the next 35 years as the third wave of globalisation, following two previous periods of growth since the Industrial Revolution, from 1858 to the start of the WWI, and from the end of WWII to 2007. Previous waves of globalisation were driven by four trade winds, identified in the report as four constant, key factors of trade in the past and in the future:
- the march of industrialisation;
- the plummeting cost of transport and logistics;
- liberalisation of trade policy; and
- the evolution of company operating models.
Four drivers of future globalisation
These four trade winds correspond to these four drivers that will shape globalisation in the next few decades:
- Mass customisation and reverse innovation. Company executives should consider how they develop and manufacture their products, with more attention given to product and service development in emerging markets, localisation of the supply chain and awareness of the needs of regional customers.
- Lower transport and logistics costs: The cost of technology that can make the transport of products more efficient could decrease as they are more widely adopted. For example, sensors and radio frequency identification device tags could lead to lower costs, safer handling of goods and significant reduction in spoilage and waste.
- Further market liberalisation: Liberal trade policies are a driver of economic growth.
- Changing business models: Companies will become more flexible and agile. MNCs will need to compete with smaller, more nimble networks of micro-mutinationals that create their own specialised value chains.
Winners and losers in global exports up to 2050
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