Networks and alliances - the keys to digitalisation

The many benefits of digitalisation for trade are clear. Digital creates new markets, reduces costs and bureaucratic burdens, drives out criminality and corruption in supply chains through resilience and transparency, and can make a profound contribution to net-zero aspirations. Digitalisation will also remove barriers MSMEs face through reducing costs, providing increased assurance, and opening new markets.  Encouraging MSMEs to engage in trade is key to driving economic growth.

The Digital Container Shipping Association estimates that if half of container shipping transactions are digitised it could save US$4 billion pa by 2030.

The blockers to adoption are a network issue - if one node in a trade network or supply chain does not digitise, processes revert to non-digital means. Solutions lie in the hands of those who form the networks. Businesses have a key role in driving these solutions, with support from Governments. Government’s should provide space to innovate and encourage uptake, acting when blockers exist that only governments can resolve e.g. legislative change.

To maximise the benefits of solutions, coordinated actions driven by alliances between governments and businesses are key. DCMS is actively working to build these networks and alliances across actors and supply chains. These alliances will also drive another key outcome - interoperability of digital systems.

DCMS supports actions that ensure the interoperability of new and existing technology, such as the International Chamber of Commerce’s Digital Standards Initiative.  This project is committed to promoting policy coherence and harmonising digital trading standards for the benefit of all. We support businesses working with established standard-setting bodies and international organisations to drive the adoption of existing standards and creating new frameworks to ensure interoperability digital trading processes. I believe there is great potential in this work.

DCMS has also been building alliances with other governments, such as using our Presidency of the G7 in 2021 to drive the adoption of the G7’s digital trade principles; with a dedicated section covering the digitalisation of trade practice and procedure.  Further, DCMS led on securing an agreement that would drive necessary legislative change amongst G7 members that places electronic trade documents on the same legal basis as paper.  At present, very few jurisdictions have established this equivalence for a vital tool in international trade.

To ensure the UK delivers, the Government intends to legislate to achieve this outcome. In doing so, we will meet the spirit of the UN Commission’s Model Law on electronic transferable records.  This action will make a solid contribution to ensuring global trade law is fit for the 21st century by enabling businesses in the UK and around the world to move to digital-based transactions when buying and selling internationally. Stakeholders state this is the most impactful action to drive digitalisation in recent years.

We have also been securing leading digital trade agreements, such as the Digital Economy Agreement with Singapore, which empowers businesses to participate in the global digital economy.   It will make trade cheaper, faster, and more secure through commitments that drive cooperation between the UK and Singapore to move digitalisation forwards. It also enables businesses to be confident in their use of electronic signatures, electronic contracts, and electronic invoicing processes to conduct cross-border transactions. One aim is the mutual recognition of electronic authentication and digital signatures and sharing best practice on single trade windows.  All key components in creating interoperable digital trading systems. It also contains specific commitments that promote the participation of women and MSMEs in the digital economy - supporting the future further growth of digital MSMEs operated by women in the UK and ensuring the benefits of trade are enjoyed by all. 

However, I am keen that we don't rest on our laurels.  We should continue to provide further impetus to drive our shared goal of digitalisation of trade. In my work, I continually seek new opportunities and innovations that will drive digitalisation.  My wider team aims to deliver more cutting-edge digital provisions within trade deals where the UK takes a leading role in setting precedents.  We can only achieve the biggest prizes by working together and strategically.  Together we can realise the major gains from digitising how we trade.