World Unique Innovation

Plant-Based High-Fashion

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In a recent blog we highlighted meat from plants. The high-fashion industry is also embracing plant-based materials, as explained in an article written by Richard Grassie in the FT Weekend magazine on December 15th, 2018.  

Leading this revolution is manwear brand, Brave GentleMen. Its founder, Joshua Katcher, created the company in 2008 with a passion for high-end clothing that does not use animal products- not just animal skins and fur, but also silk (which can involve boiling and gassing 6,600 silkworm  larvae per kg of silk), down (which is often plucked from live geese and ducks) and wool (where processes can include anaesthetic-free castration, and mulesing-the removal of skin from the rear quarters of a merino sheep to prevent fly strike).

Joshua Katcher, a pioneer in animal-free high-fashion
Joshua Katcher, a pioneer in animal-free high-fashion material

In 2015, Brave GentleMen opened its first store in Brooklyn,New York, US. For double-breasted coats, it used 100 per cent recycled polycotton blends diverted from  plastic waste stream and spun into yarn. The coats are lined with vegan “future silk” produced from a variety of polyesters, including plastic bottles.    

Joshua Hatcher reported that he is looking forward to a day that he can use laboratory-grown leather in his collections. He said he is in talks with some bio-fabrication start-ups, deciding with to work with. Materials grown in the laboratory would offer a big solution to a great many problems. Laboratory-grown as well as fungi- and plant-based d materials such as mushrooms and pineapple are the future.

Californian technology company, Bolt Threads, is a leading innovator in laboratory-made leather and silk. After studying natural silk proteins, originally from spiders, it inserted genes into yeast and used fermentation process to produce an animal-free silk, which is spun into fibres. This method resulted in the company’s first commercial product in 2017, the limited edition Bolt spun tie.

Artificial silk produced by Bolt Thread Inc

The company has also produced the first consumer synthetic leather called Mylo, created by studying mycelium, the root structure of mushrooms, to give a mushroom-based leather-like material in a laboratory.

Pineapple leaf-based leather by Pinatex

A number of other brands are also offering new alternatives to traditional animal products. Interesting innovations can be found among companies, many of them brands, using fibres from trees, fruits and fungi. One company, Pinatex, created a material from pineapple-leaf fibre. Apple cores, discarded by agribusiness industries, are used by Italian footwear company, Nemanti, for a range that includes a monkstrap weekend shoe.

Conclusion

Visionaries like Joshua Katcher and others have been leading the efforts to use plant-based materials for use in the high-fashion industry.According to the 2017 Pulse of the Fashion Industry report, leather, wool, silk and cotton are the top four materials whose production most damages the environment

We hope, as Joshua Katcher noted, one day all leather will be animal-free. For a long time, animals have been suffering to give us the high-fashion look and feel.

Note: We wish to thank the companies mentioned in the article for permission to use the images. 

About Dato' Dr Anuar

eBook Promotions

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For the next two weeks, until 31st, December 2018, we are offering our books at promotion price.

Price is now only RM10.00 or US$2.00


Price is now only RM50.00 or US$10.00

Payment can be made via direct bank transfer. Please email us for your order at datodranuar@gmail.com or phone at 6016 3220 952. 

World Unique Innovation

S-Bend: Personal Convenience for All of US

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Introduction

Tim Harford in his book, Fifty Things that Made the Modern History,listed the S-bend as one crucial invention . He noted that in 1800’s, as London’s population  expanded in number, the city’s system for disposing of human waste became woefully inadequate. The main system used then was cesspits, which were prone to leaking, overflowing and generating significant odour. A number of inventors came out with solutions to address this human waste problem. One prominent inventor was Alexander Cummings, who was known for mastery of precision mechanics. However, his well-known invention was a pipe with a curve in it.

Cumming’s Invention

In 1775, Cummings patented the S-bend. This became the missing part to create the flushing toilet, which led to public sanitation as we know it today, according to Tim Harford. Previously, flushing toilet was a failure due to the problem of smell: the pipe that connected the toilet to the sewer,allowing urine and human waste to be flushed away, would also let  sewer odours waft back-up, unless an airtight seal could be developed.

Cumming’s solution was simple: bend the pipe. Water settled in the “dip”, stopping smells  coming up;flushing the toilet replenished the water. His design had a sliding valve in the outlet above the tap. The design is still used today.  

Alexander Cumming 

We all should be thankful to Cummings for giving us the personal convenience in managing our daily needs.  We noted the modern toilet only touched our live in the early 1970s. Before that we used rivers, small streams, small ponds and open space. Many times, especially in early mornings, there were many people lining up the river in our village. Personal convenience vastly improved when the Malaysian government provided subsidies to Malaysian families to build outdoor toilets using bucket of water to flush the toilet. What a total relief for all of us, especially for women folk.

Now, we have modern indoor toilet in our house. We spend a lot of time sitting on it while surfing the internet, read book or magazine and even answer emails.

A Lot of People Still Do Not Have Toilets

Yet, there are more than 2.3 billion of people still without basic sanitation according to Guy Hutton, a senior adviser for water, sanitation and hygiene with UNICEF, when he was quoted in the Staronline, a Malaysian newspaper on 6.11.2018.

In addition, according to WHO, more than half of the volume of human waste escapes into the environment untreated.

The “toilet” problem has attracted the attention of Bill Gates and his wife, Melinda. The Bill and Melinda Foundation spent US$200 million over seven years funding sanitation research, developing some 20 novel toilets and sludge processing designs and convert bodily waste into clean water and fertilizer.

Modern toilet with many features from Toto

Conclusion

The S-bend and flushing toilet have improved the quality of lives of billion of people worldwide. However, a significant number of the world’s population is still inaccessible to basic sanitation. Thanks, we have philanthropists like Bill Gates and Melinda who saw the need to solve this basic human sanitation.We are afraid that one day, these people have no more open space to bury their waste!        

World Unique Innovation

Plant-based Meat: Taste like Real Meat

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Introduction

Beyond Meat Inc., a company producing plant-based meat has submitted an application for an initial public offering (IPO) in the US.   We have reviewed its prospectus and noted what makes Beyond Meat burger unique.

Plant-based burger produced by Beyond Meat Inc.

Overview 

Beyond Meat is one the fastest growing food companies in the US, offering a portfolio of revolutionary plant-based meat. It builds meat directly from plant, an innovation that enables consumers to experience the taste, texture and other sensory attributes of popular animal-based products while enjoying the nutritional benefits of eating plant-based meat products.

Its products are designed to appeal to a broad range of customers, including those who typically eat animal-based meat, which is worth US$1.4 trillion globally. According to the company, it had developed three plant-based product platforms that align with the largest meat categories: beef, pork and poultry. It creates plant-based products using proprietary scientific processes that determine the architecture of the animal-based meat the company seeks to replicate and then assemble it using plant-derived amino acids, lipids, trace minerals and water. The company is focusing to improve its products so that they are, to the human sensory system, indistinguishable  from their animal-based counterparts.

Its flagship product is The Beyond Burger, the world’s first 100 per cent plant –based burger merchandised in the meat case of US grocery stores. The Beyond Burger is designed to look, cook and taste like traditional ground beef. The products are currently available is about 28,000 points of distribution primarily in the US as well as several other countries.

Unique Approach to market its Products     

Instead of marketing and merchandising The Beyond Burger to vegans and vegetarians (who represent less than 5 per cent of the US population), it requests that its products to be sold in the meat case at grocery stores where meat-loving customers are accustomed to shopping for their proteins. The marketing approach has helped drive greater brand awareness with its customers.

The Beyond Burger is now carried by approximately 11,000 grocery stores in the US. Its products are also now carried by 11,000 restaurants.

The Market for Meat

The company notes that the meat industry is large and global. This meat industry is comprised of fresh and packaged animal-based meat for human consumption. According to data from Fitch Solution Macro Research, the meat industry is the largest category in food and in 2017 generated estimated sales across retail and foodservice channels of about US$270 billion in the US and about US$1,400 million globally.

The company believes that consumer awareness of the perceived negative health, environmental and animal-welfare impacts of animal-based consumption has resulted in a surge in demand for viable plant-based protein alternatives. In the US, the current size of the non-dairy milk category is equivalent to approximately 13 per cent of the size of the milk category. According to Mintel report, the non-dairy milk category in the US was estimated to be US$2.0 million in 2017. The success of the plant-based dairy industry was based on a strategy of creating plant-based dairy products that tasted better than previous non-dairy substitutes, packaged and merchandised adjacent to their dairy equivalent.

The company is applying the same strategy to the plant-based meat category. It expects to grow to be at least the same proportion of the approximately US$ 270 billion meat category in the US, which over time would represent a category size of US$35 billion in the US.

Financials

The company reported that it had experienced net losses since its inception in 2009. In the years ended December 31st, 2016 and 2017, it incurred net losses of US$25.1 million and US$30.4 million, respectively. In the same period, the company recorded revenue of US$16.18 million in 2016 and US$32.58 million, respectively.

The company would be raising additional capital through an IPO.

Conclusion

We support the efforts of the company to develop plant-based meat that tastes better than the meat from animals. The new wealthy consumers in Malaysia, China and Indonesia (with the exception of India) are consuming more meat steaks and burgers, which are imported from Australia, Brazil and the US. This need to supply more animal meat is putting pressure on existing pastures and grasslands for rearing of cattle. Scientists have reported that the raising of cattle for meat and milk would lead to emission of methane to the atmosphere.

We hope in the near future, patrons in high-end restaurants in Asia would be eating plant-based meat without realizing it.

Quick Data on Cattle Inventory     

Cattle in a pasture

Based on data published by http://beef2live.com, according to the FAO, the world has 1,468 million head of cattle. Brazil has the largest cattle inventory at 211. 76 million, followed by India with 189 million, China with 113.5 million, the US with 89.3 million, Ethiopia at 54 million, Argentina with 51.1 million and Sudan with 41.9 million. About 104 countries have a cattle inventory in excess of 1 million heads.

Electric and Autonomous car

Mining the Deep Sea Bed to Drive the Electric Car Revolution

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Patania II, owned by Dede of Belgium

 

Introduction

Today we noted two contrasting developments, 1) the price of Brent crude oil had fallen below US$60 per barrel, and 2) a company will start deep sea mining of precious metals.

In the 1980’s I worked as a refining planning engineer in ESSO’s refining unit in Port Dickson, Malaysia. During that time, as a refining planning engineer, I was tasked on production planning to refine Tapis crude, which was pumped from oil platforms located offshore in South China Sea.

Like crude oil before, precious metals used to make batteries for electric vehicles will also be mined from sea beds. According to a report in The Times London, Patania II, a 25-tonne robot tractor, will spearhead the latest push to mine precious metals from the ocean floor. Patania II would be lowered 4,500 metres to the Pacific Ocean sea bed between Mexico and Hawaii in April 2019. It will gather nodules of rock on the ocean floor that contain high concentrations of metals used in electric car batteries and renewable energy systems. The companies which are racing to mine the ocean floors are hoping to recover manganese, molybdenum, cobalt, nickel and vanadium. The companies contend that their deep sea mining operations would cause less environmental damage than producing the same mount on land by drilling and blasting millions of tonnes of rocks.

Britain is one of several countries sponsoring sea-bed mining companies that have obtained licenses from the International Seabed Authority (ISA), based in Jamaica, to explore the Clarion Clipperton Zone, an area in the Pacific Ocean covering about six million sq km. This area is thought to hold more of the metals being targeted than all terrestrial metal reserves (see our earlier blog). Access to its mineral reserves is controlled by the ISA because it is beyond the jurisdiction of any nation.

Chris Williams, the managing director of UK Sea Bed Resources, owned by Lockheed  Martin of the US, said that his company planned to mine about 9,000 sq km of the zone. “Sea bed mining will form an essential path to the future supply of precious metals for electric vehicles,” he said.

The ISA, however, needs to agree a mining code with environmental safeguards before extraction can begin. A draft has been produced to be agreed in 2020 but some of the ISA’s 168 members have a vested interest in delaying progress to protect their land-based mines from cheaper sea-bed minerals.

Environmental Concerns of Sea-Bed Mining    

The mining companies need to complete environmental impact assessments before starting extraction. The pilot operation of the Patania II, owned by Global Sea Mineral Resources (GSR), a subsidiary of the Belgian dredging company Dede, will leave nodules on the sea bed. A research vessel with 50 scientists on board, funded by EU, will study the impact. It is estimated that each nodule typically weighs about 1 kg and contains several different metals, meaning one sea-bed mine could deliver as many commodities as two or three land-based mines.

Polymetallic nodules containing several metals

 

The industry argues that sea-bed mining would reduce reliance on countries such as DRC, which produces most of the world’s cobalt for batteries.

Michael Lodge, the ISA’s British secretary-general, said that commercial extraction could start in 2023 but that depended on whether investors considered it as commercially viable. He added that some damage is inevitable but sea-bed mining was “the most highly regulated activity that’s never taken place”.

Watch out DRC on future development of sea-bed mining!

Please click below on polymetallic nodules published by the ISA.

Polymetallic nodules

 

About Dato' Dr Anuar

Free eBook for Entrepreneurs: Increase Your Chance of Securing Fund from Investors

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In 2010, we published a book, Securing Private Equity in Malaysia, as a guide for entrepreneurs on how to raise money from investors. We believe the book is still relevant today as it was in 2010.

In line with the forthcoming giving season, we want to make the ebook of the publication free to visitors of our website until December 31st, 2018.

Download the ebook by clicking below.

ebook Securing private equity in Malaysia

Yours sincerely,

Dato’ Dr Anuar Md Nor,

Founder/President, Bison Consulting

 

 

Electric and Autonomous car

Move over Saudi Arabia, Russia and Venezuela: New Energy Giants are going to be Australia, Chile and DRC

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Background

We noted an interesting article by Roger Boyes in the London Times on November 14th, 2018. He predicted that the push to produce electric cars worldwide would alter the dynamic of the existing energy-producing countries. The International Energy Agency has forecast that oil use by cars will peak in seven years because of the increasing number of drivers in emerging markets and Asia mega-cities. Then, electric vehicles will start to make a significant impact:300 million electric cars on the road by 2040. This will alter the energy value chain. The source of energy will shift from fossil fuel (crude oil) to mineral-based, namely lithium and cobalt to make powerful rechargeable batteries.

The Applications of Lithium

Spodumene, the main source of lithium

According to US Geological Survey, Mineral Commodity Summaries, January 2018 (The Report), global end-use markets of lithium are estimated as follow :

  1. Batteries, 46 per cent
  2. Ceramics and glass, 27 per cent,
  3. Lubricating greases, 7 per cent,
  4. Polymer production, 5 per cent,
  5. Continuous casting mould flux powders, 4 per cent,
  6. Air treatment, 2 per cent, and
  7. Other uses, 9 per cent.

 

Prices of Lithium

The Report noted that spot lithium carbonate in China ranged from US$15,000 to US$24,000 per ton throughout 2017 owing to tight supply of spodumene from Australia. The rest of the world experienced more modest price increases owing to supplies available from more diversified sources of lithium. Spodumene is a pyroxene mineral consisting of lithium aluminium inosilicate, LiAl(SiO₃)₂, and is a source of lithium. It occurs as colourless to yellowish, purplish, or lilac kunzite, yellowish-green or emerald-green hiddenite, prismatic crystals, often of great size.

Three spodumene operations in Australia and two brine operations each in Argentina and Chile accounted for the majority of world lithium production. The table below shows mine production and reserves of lithium.

 

Countries

Mine production in 2017 (Tons)

Estimated reserves (Tons)

US

35,000

Argentina

5,500

2,000,000

Australia

18,700

2,700,000

Brazil

200

48,000

Chile

14,100

7,500,000

China

3,000

3,200,000

Portugal

400

60,000

Zimbabwe

1,000

23,000

World total (excluding US)

43,000

16,000,000

Source: The Report

 

Australia, the main supplier of spodumene

 

Chile, a major supplier of lithium from brine operations

Owing to continuing exploration, lithium resources have increased substantially worldwide and total more than 53 million tons.

Substitutes

Substitution for lithium compounds is possible in batteries, ceramics, greases, and manufactured glass.

 

The Applications of Cobalt

Cobalt mineral

According to The Report, Democratic Republic of Congo (DRC) is the leading source of mineral cobalt, supplying more than one-half of world cobalt mine production. With the exception of production in Morocco and artisanally mined cobalt in DRC, most cobalt is mined as a by-product of copper or nickel. In 2017, average annual cobalt prices more than doubled, owing to strong demand from consumers, limited availability of cobalt on the spot market, and an increase in metal purchases by investors.

China is the world’s leading producer of refined cobalt. Much of China’s production was from ore and partially-refined cobalt imported from DRC. China is the world’s leading consumer of cobalt, with nearly 80 per cent of its consumption being used by the rechargeable battery industry.

The table below shows mine production and reserves of cobalt.

 

Countries

Mine production in 2017 (Tons)

Estimated reserve (Tons)

US

650

23,000

Australia

5,000

1,200,000

Canada

4,300

250,000

DRC

64,000

3,500,000

Cuba

4,200

500,000

Madagascar

3,800

150,000

New Caledonia

2,800

Papua New Guinea

3,200

51,000

Philippines

4,000

280,000

Russia

5,600

250,000

South Africa

2,500

29,000

Zambia

2,900

270,000

Other countries

5,900

560,000

World total

110,000

7,100,000

Source: The Report

 

DRC is the biggest producer of cobalt and having the biggest reserves

The Report noted that terrestrial cobalt resources are about 25 million tons. In addition, more than 125 million tons of cobalt resources have been identified in manganese nodules and crusts on the floor of the Atlantic, Indian and Pacific Oceans.

Substitutes

In some applications, substitution for cobalt would result in a loss in product performance.

 

Conclusion

The electric car revolution would increase the consumption of cobalt and lithium, and the reduction in the consumption of petrol from crude oil. These mean countries such as Australia, Argentina, Chile and DRC would be the new energy giants in the next decades. What would the existing energy giants such as Saudi Arabia, Russia and Venezuela do with their plentiful reserves of crude oil?

Jobs and Automation

Robots Making Robots

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Factory Runs By Robots to Make Robots

Swiss robotics company ABB has revealed that it’s spending US$150 million to build an advanced robotics factory in Shanghai — one that will use robots to build robots. The company will rely on its YuMi single-arm robots, which it once used to conduct an orchestra, for small parts assembly. It also plans to make extensive use”of its SafeMove2 software in the facility, which it says will allow its YuMi models and other automated machines to safely work in close proximity with human employees.

ABB says its goal is to make the Shanghai facility the most advanced robotics factory in the world. It will even feature a Research and Development center to accelerate the firm’s work in artificial intelligence. In addition, it will widen the types and variants of robots the company can build for Chinese companies, including automakers and electronics manufacturers. China is ABB’s second biggest market after the United States, and the new factory could greatly expand its presence in the market. The company expects to open the 75,000-square-foot facility by late 2020.

The Status of World’s Robots Population

According to the International Federation of Robotics (IFR) 2018 Report, there are three types of robots;

  1. Industrial Robots
  2. Professional service robots, and
  3. Personal/domestic services robots

The IFR 2018 reports noted key drivers for robots, and they include:

  • Shift to high mix/low volume production
  • Global competitiveness
  • Digitalization of manufacturing-Industry 4.0.
  • Growing consumer market
  • Energy efficiency-driven technology shift
  • Regionalized production

Industrial Robots

Automotive industry uses the most number of industrial robots

In 2017, China was the biggest supplier of industrial robots with 138,00 units followed by Japan at 46,000 units. The main customers of industrial robots are the automotive industry and the electrical and electronic industry. However, China was lower in the ranking in the number of installed robots per 10,000 employees in the manufacturing industry in 2017, as shown below:

  Country Installed robots
1 Korea 710
2 Singapore 658
3 Germany 322
4 Japan 308
5 Sweden 240
6 Denmark 230
7 US 200
8 Taiwan 197
9 Belgium 192
10 Italy 190
11 Netherlands 172
12 Austria 167
13 Canada 161
14 Spain 157
15 Slovakia 151
16 Slovenia 144
17 Finland 139
18 France 137
19 Switzerland 129
20 Czech Republic 119
21 China 97

 

In 2017, there were 2,098,00 industrial robots in world’s factories as compared to 1,632,000 in 2015.

Professional Services Robots

A professional service robot

According to IFR 2018 Report, there were sales of US$6.6 billion of professional service robots in 2017, representing 109,500 units. The main applications were in the logistics, medical, field and defence sectors. AGVs were used in factories, warehouses, logistics centres and hospitals. Medical robots are most valuable with 2,900 units representing sales of US$1.9 billion in 2017. Field robots are mainly milking robots.

Personal/Domestic Service Robots

ASIMO, a leisure robot

Vacuuming and floor cleaning robots are mostly established personal/domestic robots. In 2017, there were 1,200,000 household robots and 400,000 entertainment and leisure robots.

 Please find a snapshot of the robotic industry in the report below.

WR_Presentation_Industry_and_Service_Robots_18_Oct_2018

Electric and Autonomous car

Vehicle-to-Grid: Electric Vehicles Supply Power to the Grid

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Meter reader of our electricity company

Introduction   

Every month, a meter reader, wearing light blue shirt, will be entering our house compound to read the electricity meter at our house. Then, he will drop the electric bill into our mailbox. This October’s bill reads RM294.

We dream of a day that we will receive a cheque from the meter reader instead of the monthly electricity bill. That day will be coming soon. On October 23rd, 2018, it was reported that an electric car Nissan Leaf, manufactured by Nissan, became the first electric vehicle (EV) to secure regulatory approval as an energy backstop for Germany’s electricity grid.

So-called vehicle-to-grid (V2G) technology is a connection between the EV and the electricity grid through which power (electricity) can flow from the grid to the vehicle and vice versa. That potentially enables car owners to sell electricity to the electricity network supplier. In addition, electricity network supplier companies could use EVs as a backstop if electricity demand rises.

The   International Energy Agency estimates that there would be 280 million EVs by 2040 compared with more than 3 million in 2017.

V2G system

Nissan is relying on the CHAdeMO charging standard, which had been jointly developed by several Japanese companies as a competitor to Tesla’s supercharger system and the European-backed combined charging system (CCS). That places Nissan at odds with European carmakers such as BMW and Volkswagen, which are promoting to have the CCS, which is capable of V2G services.

Nissan is ahead of its other competing technologies although Tesla’s supercharger can theoretically offer V2G services according to an industry expert.

Nissan has so far sold about 370,000 EVs and, along with top shareholder Renault, has been very active in exploring how car batteries can be integrated into the electricity supply system.

How Does V2G Technology Benefit Us?

According to ovoenergy.com, we are moving towards a situation where “two-way” chargers can enable homeowners with EVs to sell their power (electricity) back to the electricity network. It is a smart idea when over 90 per cent of cars are parked at any one time—which is a lot of energy just sitting there doing nothing.

Battery Degradation

Lithium ion battery used in EV

Batteries have a finite number of charging cycles, as well as a shelf-life. Therefore, using an EV as grid storage can impact battery longevity. However, studies have shown that battery capacity is a complex function of factors, such as battery chemistry, charging and discharging rate, temperature, state of charge and age.

Most studies with slower discharge rates show only a few per cent of additional degradation.

Conclusion

We believe, with rapid progress in EV and V2G technology, our wish to have the meter reader drops a cheque into my mailbox for supplying power to the national electricity grid would be realized soon. First, we need to book a Nissan Leaf from our local Nissan dealer.

Must-Read Reports

World Trade Report 2018: The Future of World Trade: How digital technologies are transforming global commerce

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Introduction

The World Trade Report 2018 (The Report), published by World Trade Organization, examines how digital technologies are transforming global commerce. The Report describes four digital technologies, namely artificial intelligence, the Internet of Things , additive manufacturing (3D printing) and blockchain, which have been achievable by the exponential rise in computing power, bandwidth and digital information.

The key findings of The Report are:

  1. Digital technologies are reshaping consumer habits by shifting purchases online through the widespread use of internet-enabled devices which provide consumers with direct access to online markets.
  2. It is estimated that, in 2016, the value of e-commerce transactions totaled US$27.7 trillion, of which US$23.9 trillion was business-to-business e-commerce transactions.
  3. Digital technologies allow for easier entry and increased product diversity, making it easier for firms to produce, promote and distribute their products at a lower cost.
  4. Digital technologies give rise to opportunities and challenges that may require the consideration of governments and international community in areas as diverse as investment in digital infrastructure, human capital, trade policy and regulation.

The Report also highlights that new technologies are likely to change established trade patterns as the importance of traditional sources of comparative advantages changes and new sources emerge.

Internet of Things where all devices are connected

Digital economies are likely to reinforce the importance of skills and capital endowment, as they are capital-intensive and skill-intensive. Artificial intelligence, 3D printing and advanced robotics could reduce the role of labour as sources of comparative advantages.

Artificial intelligence where robots would replace workers in repetitive jobs

In contrast, physical infrastructure, border processes and geographical factors might become less relevant, which would benefit remote or landlocked economies, as well as economies with less-developed physical infrastructure and custom procedures. 

Energy infrastructure will also become an important factor in defining comparative advantage in digital-intensive sectors, because the services that support digital technologies depend on storage devices, power supplies and cooling systems that consume vast amounts of energy.

3D printing would change manufacturing methods

Another factor that could become more important for trade patterns in the digital age is market size. Digital technologies benefit from access to large amounts of information, which may be advantageous to large developing countries like India, Indonesia and Nigeria.

With regard to institutions, the digitalization of trade may magnify their importance for comparative advantage, given that data privacy and intellectual property rights regulation rely on credible enforcement. However, new technologies may reduce the role of institutions for comparative advantage.

Blockchain will enable building of trust among participants

In addition, to these traditional sources of comparative advantage, new services will arise for trade digital-intensive products. The regulation of intellectual property rights, data flows and privacy are likely to be of particular importance, as well as the quality of digital infrastructure, since reliable and fast network access is becoming a necessity for conducting businesses.

Advantages and Opportunities    

The advantages of digital technologies bring about opportunities and challenges for developing and developed countries alike. For instance, as digitalization increases the complexity of tasks performed by workers, developed economies may strengthen their competitive advantage in skill-intensive sectors. However, as new technologies diminish the importance of physical infrastructure, developing countries may also gain competitive advantage in the sectors most affected by the shift from physical to digitalization of trade.

Malaysian assembly workers would lose their relevance in 3D pervasive environment

For a country like Malaysia, which depends on labour-intensive export manufacturing sectors, 3D printing, in the long run, may substitute for traditional manufacturing methods, such as assembly of products. It would reduce the need for outsourced production and assembly, the number of production steps, and the need for inventory, warehousing, distribution, retail centres and packaging.

Value chain in a world of pervasive 3D printing may not only become shorter—with the emergence of production centres near every large customer base or near centre of innovation—but they might also look very different, being mostly based on cross-border exchange of data, in the forms of designs, blueprints and software, rather than on exchange of cross-border of materials services.

The Report is a must-read for business leaders and officials of government. The Report is enclosed below.

World Trade Report 2018