Deep tech firms are answering to sustainable development goals, European Commissioner for Innovation tells WEF

DAVOS: Technology is paving the way for small businesses to participate in global trade at a much higher rate as the world pushes ahead to overcome trade barriers through multilateral cooperation, experts gathered at the World Economic Forum in Davos opined.   

Speaking at a panel discussion titled “Tradetech Meets Fintech,” Peggy Alford, executive vice president at PayPal, said the “regulatory and capital requirements, along with the infrastructure needs” in the past made it very difficult for small businesses to participate. 

“With technology, SMEs are able to work with banks, service providers and fintech companies to really be included in this economy of selling to the world,” she said. 

World Trade Organization Director General Ngozi Okonjo-Iweala agreed that digital tools are allowing more inclusion, “as they allow SMEs, women and everyone who can get online to become part of regional, national and global value chains.” 

Stressing that a set of global rules are necessary for the booming e-commerce section, she revealed that the WTO is working on an e-commerce agreement that is currently under negotiation. 

Even as small and medium enterprises try to embrace new technological tools to enhance their operations, Alford noted that small businesses are facing a lack of financing. 

She stressed the need to have multilateral cooperation, adding that countries should work together to remove the barriers in the trading sector. 

WTO director general agreed that sufficient help and financing should be provided to SMEs in developing countries to bridge the gap in digitization. 

Okonjo-Iweala further pointed out that some of the global regulatory standards are making it difficult for developing countries to access finance for SMEs. 

Thani Ahmed Al Zeyoudi, the UAE’s minister of state for foreign trade, agreed that technology is going to play a major role in improving the way in which businesses are being operated in the emirate. 

“Trade barriers can be overcome only using technology. In the UAE, technology is led by the private sector, and it is always the case globally too. Technologies are usually initiated by the private sector,” he added. 

The minister further pointed out that the private sector has a huge role to play as the world embraces a technological transition. 

Stressing that the implementation of technology in businesses will not reduce the number of jobs, he said it will create more opportunities in trade, both regionally and internationally. 

“Technology is going to bring more businesses. We are not here to make anyone lose their job. More volume means, more and more jobs will get added,” said Al Zeyoudi. 

The UAE minister pointed out that governments are still operating with the same revenue models for the last 20 years, and now, it is time to reshuffle. 

“We should not be afraid to take some risks, and apply technology, as we are going to create more revenues and ensure that we are really improving the trade and economies of our countries,” said Al Zeyoudi. 

WTO director general opined that future trade should be “digital, inclusive and sustainable,” and added that digital trade is growing at an accelerated rate, especially in the cross-border data flow. 

“In 2005, digitally traded services came to about $1.6 trillion dollars, and it was growing at about 7 percent per annum. In 2021, we have about $3.7 trillion dollars, and during the pandemic, because of the demand, it has been growing at 14 percent per annum. So, it is very clear that digital is the future,” she concluded.