To paraphrase Francis Fukuyama, one could have been forgiven for thinking that we had reached the end of market economy history. The trend over the past 40 years has been for trade barriers to come down, and it was a truth pretty much universally acknowledged that opening up economies was good for growth and social prosperity.
Even non-market economies made a pretense at being open and the General Agreement on Tariffs and Trade (GATT) was considered great. The rise of protectionism has, therefore, come as quite a surprise.
Protectionism can come in many forms. It isn’t just the obvious taxes and tariffs that can make trade in goods and services unappetizing. The Food and Agriculture Organization (FAO) has provided a rather nice list of things that can hinder entry to new markets including:
- Government interventions in trade — Government procurement, stock trading, export subsidies or taxes, countervailing duties, trade diverting aid, etc.
- Customs and administrative entry procedures — Customs valuation, customs classification, antidumping duties, consular and customs formalities and requirements, sample requirements, etc.
- Specific limitations on trade — Quantitative restrictions, export restraints, health and sanitary regulations, licensing, embargoes, minimum price regulations, etc.
- Charges on imports — Tariffs, variable levies, prior deposits, special duties on imports, internal taxes, etc.
- Standards — Industrial standards, packaging, labeling and marking regulations, etc.
So what can IoT offer in this new era of trade? And why are digital ecosystems important?
In relation to the first, while protectionism may not be good for the global economy as whole, completely open borders are probably also not a good idea. Some controls are always necessary to prevent trafficking, in people as well as in good, and to contain hazards to health and safety, for instance.
IoT technologies can help governments patrol borders, enable asset owners and insurers track assets as they move across national boundaries, and enhance transparency and efficiency in cross-border administration. Combined with artificial intelligence, unusual patterns can be spotted to thwart illegal activity. They can also play a valuable role in less obvious areas such as real-time security access permissioning or protecting lone workers in dangerous areas.
So where do ecosystems come in? Firstly, the greatest advances on the status quo may come from startups. While their technology may be sound, scaling to the level required by border authorities may well require sandboxing or some other form of piloting. Finding IoT startups that have these capabilities can be like looking for a needle in haystack. Working with reputable startup ecosystem players can help sweep away the surplus hay.
Secondly, IoT is by very definition an ecosystem play. By contributing to ongoing debates on everything ranging from security to standards, would-be deployers can make sure that they understand what the real risk-reward of implementation, but also actively help shape the IoT landscape and enhance the value it brings to their own domain.
Disclosure: The author is CEO of IoT Tribe, an equity-free accelerator that brings corporates and startups to do business and a member of the Board for the Alliance of Internet of Things Innovation, an industry body that aims to foster IoT innovation in Europe.
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