Trust links up supply chains. How do you establish it in the digital era?

logistics 19

(Unsplash, 2019)

This article is brought to you thanks to the collaboration of The European Sting with the World Economic Forum.

Author: Henrik Hvid Jensen, Senior Blockchain Advisor, Trustworks


Several enterprises in global supply chains have moved their digitalization focus outwards towards the business networks of which they are part. Supply-chain actors need to work digitally with others across national borders to optimize the flow of physical goods, as well as the complex flow of information and financial transactions.

In digital business relationships like global supply chains, it is essential to ensure there is a legal entity behind the identities involved in a business interaction. Today, most digital identity systems exist in isolation. Different public and private solutions record and maintain identical identity data potentially hundreds of times over, and are not inter-operable, creating a significant amount of redundant identity information. This is a waste of resources for the network in question, is difficult to scale, and buried in error-prone and paper-heavy processes

Digital identity ensures integrity in connecting the physical and the digital world. In global digital supply-chain transactions, it is essential for a legal entity to prove its own identity and check those of other parties, each of which requires a unique, verifiable and authentic digital signature.

Envision a model where businesses and governments are able to instantaneously validate the trustworthiness of any legal entity they intend to engage in a business interaction. Which would enable more fluid and dynamic supply chains where you can engage with the right business entities, things and autonomous software agents at the right time, to procure the right services. With none of the cumbersome task of registering and approving your supply chain partners ahead of the interaction.

The recent World Economic Forum White Paper Trustworthy verification of digital identities recommends realizing a shared digital Global Trade Identity (GTID) for business and public authorities involved in global trade. A GTID is a foundational element in more efficient trade facilitation, and as such is a requirement for reducing several supply-chain barriers. The 2013 World Economic Forum report Enabling Trade: Valuing Growth Opportunities shows that “Reducing supply chain barriers to trade could increase global GDP by nearly 5% and trade by 15%”. Although digitization isn’t the only activity that will help remove supply-chain barriers, GTID is a prerequisite for harvesting most of the digitization benefits; a foundational contributor to the increased global GDP and trade that stems from digitization.

GTID requires global collaboration, and such collaboration must be based on principles designed for neutrality and inclusivity:

WEF’s GTID White Paper illustrates a model that supports these principles and ensures a digital Global Trade Identity infrastructure where business and governments can manage their own identity without relying on a third party. Each party can present the verifiable identity credentials they prefer, and the receiving party is able to use its own internal business rules and regulations for validating the trustworthiness of the presented identity credentials. To enable inclusive global trade, GTID supports businesses of any size; each country’s required investment is insignificant, and GTID supports even countries with very limited digitization level. The model also ensures that no single entity controls important components of GTID, protecting it from shifting political priorities.

If you don’t trust an entity, you likely don’t do business with that entity.

Identity and the level of trust assurance are at the core of every supply-chain interaction. Organizations need to ensure they are dealing with the right entity and efficiently link a digital identity and a real organization, and more importantly evaluate the trustworthiness of a given legal entity. This process of dynamically verifying counterparts – digital identity management and verification – is a critical step in establishing trust and assurance for organizations participating in digital transactions.

GTID is a prerequisite for efficient digitization of global supply chains and supports the digital era’s increased focus on optimizing an overall business environment, instead of organization-centric optimization.

A foundational step

WEF’s Enabling Trade report shows that increased trade is a significant contributor to increased wealth globally, with positive effects on unemployment, potentially adding millions of jobs to the global workforce. Lower supply chain cost through digitization is effective because it eliminates resource waste and reduces costs to trading firms and, by extension, lowers prices to consumers and businesses. The report shows that small incremental changes may have minimal effects until a tipping point is reached, and the realization of GTID will allow any country to reach the tipping point faster and for a smaller investmentHave you read?

 

If you do not know who your business partners are, dynamic digital interactions in global supply chains will never happen. Therefore, realizing a common digital global trade identity is a foundational step in trade, worthy of priority from industry and governments.

Advertising

Advertising

Advertising

Advertising

Advertising

the sting Milestone

Featured Stings

Can we feed everyone without unleashing disaster? Read on

These campaigners want to give a quarter of the UK back to nature

How to build a more resilient and inclusive global system

Stopping antimicrobial resistance would cost just USD 2 per person a year

Children are forgetting the names for plants and animals

6 innovative technologies about to transform our infrastructure

Rising landmine blast toll in Afghanistan highlights long-term care needs of survivors

The role of public affairs in student NGOs

Climate change and health: an everyday solution

MEPs urge the EU to lead the way to net-zero emissions by 2050

A new era of computing is coming. How can we make sure it is sustainable?

Athens urged to fast track asylum seekers amid island shelters crisis – UNHCR

EU budget: the Common Agricultural Policy beyond 2020

Why the ECB had to clarify it caters for the entire Eurozone not just Germany?

Why business can no longer turn a blind eye to poor vision

Banks worth $47 trillion adopt new UN-backed climate, sustainability principles

Draghi indirectly accuses Germany of using double standards in financial issues

Yemen bus attack just the latest outrage against civilians: UN agencies

‘Mosques should be safe havens, not sites of terror’, says Guterres announcing UN plan to help safeguard religious sites

A money laundering case on Vatican Bank’s road to renovation

This man is sleeping out in the Davos cold to make a point about homelessness

Nuclear testing has ‘disastrous consequences’ for people and planet, General Assembly told

Killing of aid worker in Syria part of ‘disturbing trend’

A Europe that Protects: Commission calls for more efforts to ensure adoption of security proposals

Look no hands: self-driving vehicles’ public trust problem

Further reforms will move Slovakia toward a more innovative and inclusive society

MEPs demand an end to migrant deaths across the Mediterranean Sea

UN chief ‘deeply alarmed’ over military offensive in south-west Syria

Do we judge robots on their colour? This study says we do

Five-year low inflation for Eurozone and now Mario has to finally wake up the Germans

This incredibly detailed map of Africa could help aid and development

GDPR and the World Cup have these 4 things in common

Cash-strapped cities must look to private partners

These countries are driving global demand for coal

4 reasons why women should lead the G7 agenda in 2018

EU migration deal welcomed by UN agencies

Parliament elects Ursula von der Leyen as first female Commission President

Cross-border cooperation: the EU Interreg programme celebrates 30 years of bringing citizens closer together

Terrorist content online: MEPs agree to start negotiations with EU countries

Want a more inclusive society? Start with mobility

Can a Bavarian Oktoberfest beer indulger bring down the Berlin government?

It’s Trump’s anti-globalization and inward-looking rhetoric that perturbs GOP and US

Commission offers discount on fines to banks for competition infringements

Austerity ends in Eurozone, Germany is isolated

Africa’s Sahel: Act now before the crisis ‘becomes unmanageable’, urges Grandi

In West Africa, UN Security Council visits Côte d’Ivoire and Guinea-Bissau

New York’s rooftop farms provide fresh local produce – and help stop a sewage problem

The ‘abuse of food relief in Yemen’ must end now

Drawing scenarios for drifting Britain; elections or May’s deadlock?

A ‘charismatic leader’ dedicated to making the world a better place for all: officials bid farewell to former UN chief Kofi Annan

The sustainable fashion revolution is well underway. These 5 trends prove it

A Sting Exclusive live from Brussels: Solheim’s consequential visit leading the world and the UN

The results of Finland’s basic income experiment are in. Is it working?

The 5 lessons from New York Climate Week to help us combat deforestation

UNICEF warns of ‘lost generation’ of Rohingya youth, one year after Myanmar exodus

How technology can help us achieve universal healthcare

The missiles fired against Damascus, Syria divided Europe deeply

The world is getting angrier, according to a new poll

At this Italian bookshop, children swap their recycling for something to read

European Commission recommends to the European Council (Article 50) to find that decisive progress has been made in Brexit negotiations

IMF: All you want to know about Argentina

Guinea-Bissau spotlights threats of organized crime, Sahel terrorism in speech to UN Assembly

Is there a new debt crisis on the horizon?

The China-US trade deal will be signed on time; the path is set

More Stings?

Speak your Mind Here

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s