"The lack of validated data increases the risk of doing business and limits the growth of trade."
Economic integration is sub-optimal in many parts of the world. For example, in the Association of Southeast Asian Nations (ASEAN) the share of intra-regional trade amounts to a mere 25 percent, this compares poorly to Europe, where it stands at 75 percent. This disparity reveals that taken in isolation, monetary and fiscal policies, Free Trade Agreements (FTA) and bi-lateral trade deals are not enough to achieve the sustained economic growth desired by the world’s citizens.
The effectiveness of such policies and trade agreements are limited because international trade is an inherently risky business and requires enormous trust between trade participants. Trust that the products will be supplied to the right specification. Trust that accounts will be settled, in the absence of hard to come by trade finance and insurance as well as trust that goods will arrive at the intended destination in good condition.
To mitigate such risks, trade parties gather a myriad of information to locate new markets and qualify potential trade partners as well as exchange information to complete the trade transaction. While various attempts have been made to digitize and speed the flow of the required information, the information technology world is mainly reliant on non-validated data (NVD) with high dependency on single-sourced information, customer reviews, IP address behavior, like and dislike selections, etc.
The lack of validated data provided by multiple parties within the global value chains results in improper decisions being made, missed opportunities, and contract disputes that restrict the growth of trade which is a primary objective of trade policies and trade agreements.
"The Multi-Dimensional Digital Economy Application System (MDDEAS) will generate information with ‘Ultimate Data Quality’ to de-risk trade and maximize growth."
Real economic integration begins with the first handshake that takes place between the buyer and seller. The handshake serves as an initial step for an exchange of products and/or services after finding a proper match between buyers and sellers. However, the major challenge facing the developers of B2B e-Commerce systems is how to create the proper match and increase ‘Conversion Ratios’ i.e. the ratio between seeing a product or service to its acquisition. To solve this challenge, the MDDEAS accumulates trade related information based on the historic, current, and planned trade transactions of each participant that is validated through multiple sources of data in the same trade pipeline. This results in information with Ultimate Data Quality (UDQ) that has a high degree of veracity towards facilitating informed decision making, de-risking trade, and triggering actions with confidence. This UDQ information environment then identifies and embeds the following key Conversion Ratios drivers to drive increased trade and achieve the economic integration so coveted by all regions of the world.
- First, is the price and quality of products or services so that the buyer can make an informed judgment on the value offered
- Second, is the probability of financing the products or services, determined by the underwriting criteria of the lender
- Third, is the insurability of the business transaction, determined by the probability of loss, as assessed by the insurance underwriter
- Fourth, is the reliability of the logistics supply chain, determined by the efficiency of the parties involved in moving the goods from shelf-to-shelf on a recurring basis
- Fifth, is the level of system integration among the supply chain participants, determined by the seamless transfer of shipment information between the various entities required to move goods from shelf-to-shelf
The question remains, where do we start obtain the UDQ required to validate the 5 key Conversion Ratio drivers?
The answer lies within one of the 4 pillars of trade - Logistics. As shipments flow through the industry clusters in the value chains, shipment data is entered in the system to perform a real life action. It is continuously validated from multiple sources in the same trade lane pipeline as the shipment progresses from shelf-to-shelf; errors or anomalies are quickly identified and addressed in real time, thus generating UDQ.
This UDQ is the fuel that can drive the other 3 pillars of trade; Commerce, Finance and Insurance to optimum levels of efficiency addressing the major challenge that inhibits economic integration and rebalancing of the world economy.
"Smart information is presented at the very moment a buyer evaluates any seller’s products or services globally, thus maximizing conversion ratios from seeing a desired product and service to acquisition. Hence, real economic integration is achieved."
Benefits of this system will:
- Ensure quality of services and products based on sellers’ global activities
- Facilitate and expedite product and service finance
- Minimize insurance premiums and optimize coverage
- Ensure the reliability and dependability of the logistics industry pipeline from seller to buyer
- Ensure speed of integration of sellers into the buyer’s supply chain