4 May 2022
The year 2021 marks a new trend in global community development: digital data presentation, or digitalization.
A recent report by Adobe indicates that in 2022, the rapid digitalization of international traders will continue as the only possible way to improve the efficiency and competitiveness of companies.
According to UNCTAD, the volume of global trade in 2022 will increase by 25% compared to 2021, reaching 28.5 trillion USD.
The last quarter of 2021 was the most positive quarter for trade worldwide. And developing countries traded much more than developed countries. Trade in goods reached nearly 6 trillion USD (up +200 million USD). Trade in services amounted to 1.6 trillion USD (+50 million USD).
International trade performance in 2021 was mixed. Global trade in products exceeded pre-pandemic levels, but trade in services remained subdued as many cross-border services, especially international travel, and tourism, have not yet recovered.
After a strong global economic recovery in 2021, global growth is weakening. Further global economic recovery and prospects depend on a delicate balance between new waves of COVID-19, serious political challenges, persistent labor market problems, continuing supply chain disruptions, and rising inflationary pressures around the world.
Factors which will influence the world trade in 2022
This year, UNCTAD expects global trade to be influenced by several factors, but most notably, inflation in the U.S. and some countries in Europe, the real estate turmoil in China, and the war between Russia and Ukraine.
By now, most international companies have learned to adapt and remain resilient in the face of an uncertain economic climate, difficulties in the supply chain and waves caused by COVID-19. As part of this resilience, they have found the strength to accept that the future of the international trade ecosystem remains unpredictable.
To adapt, they are employing better risk management strategies, finding alternative transportation routes, manufacturing, and export service providers, leveraging digital markets, and employing innovative economic and financial solutions.
Digital prospecting solutions will be more relevant in 2022 than ever before. Accordingly, tools like EasyBusiness are becoming more and more in demand in export, sales and logistics departments.
Those who were able to adapt last year will this year fully immerse themselves in their new normal: innovating, embracing digital technologies and, yes, becoming more comfortable with the unknown.
Based on these insights, we’ve compiled a list of 10 global trade trends to watch in 2022. Many of them prove that, in general, the international business community has accepted unpredictability as the norm in which it can and should thrive.
1. Moderate economic growth with regional and sectoral variability
According to the WTO, global merchandise trade growth could increase to 4.7% in 2022.
As last year, economic progress will vary from region to region, with developed countries making faster gains than developing countries.
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2. Continued supply chain challenges
In 2021, supply chain problems dominated the headlines. From shortages of pallets and containers to closures and delays at major ports and even a totally unexpected crisis in the Suez Canal, the problems were numerous.
Many of these problems will persist into 2022, though perhaps it won’t be so bad. The WTO predicts that “Supply-side issues such as semiconductor scarcity and port backlogs may strain supply chains and weigh on trade in particular areas, but they are unlikely to have large impacts on global aggregates. The biggest downside risks come from the pandemic itself.”
How should exporters prioritize new markets? How to properly align the supply chain in the current reality? Kompass market ranking report will help to determine the strategy and tactics for export promotion in 2022.
3. Hybrid logistics strategies
With COVID-19 restrictions increasing and decreasing throughout 2020 and 2021, many companies are rethinking their logistics strategies this year and will likely diversify their plans by creating hybrid approaches.
Last year, some considered localizing their supply chains while others diversified and expanded them; but this year, those who don’t want to set all their eggs in one strategy basket will create a mix of local and expanded networks to ensure that if one supply chain fails, another can take its place.
Some companies will likely continue to improve just-in-time manufacturing with the addition of just-in-case logistics. Others will move production of some goods closer to home markets, while retaining offshore production facilities to serve local markets.
4. Political sanctions
As 2021 ended, there were signs of political friction among many of the world’s major countries. The U.S., Canada, Australia, and the U.K. have announced a diplomatic boycott of the Beijing Winter Olympics.
Russia’s invasion of Ukraine has led to an unprecedented wave of sanctions by the world’s leading economies, which will have extremely negative consequences for the world economy. It is still extremely difficult to predict the amount of damage to world trade.
5. Strengthening data security
As digital technology becomes the only way forward for many global enterprises in 2022, there will be increasing efforts to improve data security. This will be driven not only by the rise of security breaches, but also by the rising costs associated with them.
A single hack can be enough to seriously affect an enterprise’s bottom line as well as its reputation. Having the right precautions and business continuity processes in place is vital to long-term success and brand credibility.
6. Artificial intelligence and automation technologies
“This pandemic has created a very strong incentive to automate the work of human beings,” says Daniel Susskind in an article for Time magazine, “Machines don’t fall ill, they don’t need to isolate to protect peers, they don’t need to take time off work.”
Companies around the world are using everything from chatbots to support customers to AI software that generates content to help them cope with growing content needs or a shrinking workforce.
This trend will continue to boom in 2022.
7. Growth and adoption of a remote workforce
Data show that 74% of businesses plan to offer employees remote work after the pandemic, and 55% of workers said they want to work remotely as much or more than they do now.
When the forecast for COVID-19 improved in a number of countries in 2021, some companies tried to launch return-to-work scenarios, but their efforts proved short-lived in the face of new COVID-19 mutations and a general cultural shift toward demanding remote work scenarios regardless of health status.
In 2022, companies will take note of this desire to work remotely and offer more options for work-from-home or part-time work scenarios to match the current changes.
The year 2022 will be full of shifts and changes, some of which will be foreseen and others unexpected. Digitalization and automation of all business processes related to exports are the main trends this year. Online platforms such as Kompass.com are more than ever becoming active helping tools in accessing and promoting in foreign markets.
Now it is clear that we cannot predict the situation in the world with certainty because the pandemic is still not over and the war in Ukraine is in full swing, but those who accept this fact are moving forward with ingenuity and innovation. In doing so, they will excel and find solutions that can move international business into a new era of sustainability and progress–and that is what everyone is looking forward to.