13 Pages Posted: 16 May 2018
Date Written: May 2, 2018
From the adoption of the shipping container to coordinated trade liberalisation, reductions in trade costs have expanded the potential of global trade and enabled modern globalisation. In this paper we define and explore TradeTech: the entrepreneurial application of technology to economise on the information costs facing global supply chains. Consumers, producers and governments increasingly demand information about the quality, characteristics and provenance of traded goods. While this information is costly to coordinate between multiple parties, these costs can be economised through new modes of economic organisation. The possible governance forms of supply chains are ultimately constrained by existing technologies. In this paper we introduce and analyse the potential of blockchain technology as a new decentralised economic infrastructure to overcome the information costs of trade. Blockchains may potentially act as a trusted ledger of information pertaining to the characteristics of goods for consumers, firms and governments. Effective adoption of blockchain TradeTech, however, requires high-level international policy coordination—including the development of open standards for information governance—to enable entrepreneurs to discover, build and adopt this new economic infrastructure.
Keywords: Blockchain, TradeTech, Policy Coordination, Trade Costs
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