Over the past half century, global exports of products have grown at an amazing speed of nearly 9% a year. International exports now take up roughly 20% of global GDP. One of the largest uncertainties surrounding the global economy is what the impact of the current Covid-19 crisis will be on trade flows, especially intercontinental. Will these increase further, stabilise at current levels or structurally go down for the first time in history?
We do see temporary changes as a direct result of the economic downfall, yet the Covid-19 crisis itself will not substantially change global trade flows structurally. The crisis can, however, have a major impact on forces that are already at work, in particular due to an increased awareness of the vulnerability of international sourcing. Note in the graph above that growth of global trade in products is already faltering for a number of years. The key question is if Covid-19 will accelerate developments that are behind this, like servitisation, production miniaturisation, trade conflicts, reshoring, 3D printing and local food production. If these forces also impact the future of your company, it is now time for some serious analysis to foresee critical changes and reap the opportunities it will bring.