Think Piece

How Digital Trade is Transforming Globalisation

By James Manyika, Susan Lund, 
January 2016
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The spread of digital technologies is transforming global flows of goods, services, money, and people. Digital trade represents an important, albeit hard-to-measure, component of these global flows. As digital trade grows, develops, and assumes new forms, it is both facilitating globalisation and transforming it. This paper examines three ways this transformation process is taking place: through cross-border flows of purely digital goods; by using “digital wrappers” to enable physical flows of goods — an essential component of the “Internet of Things”; and through the creation of online platforms for production, exchange, and consumption. Large and small companies, as well as individual entrepreneurs and consumers, in both developed economies and the emerging world will be increasingly affected by these developments, which constitute both an opportunity and a competitive challenge. For governments and policymakers, the rapid transformation of digital trade raises important issues that will need to be addressed, including lingering barriers to its growth, appropriate ways of measuring it, and questions about governance and data security.

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