 Hello everybody. We're going to get started with this next session. Thank you very much for coming. My name is Don Derfee with Reuters The previous moderator Peter Thalarsen, unfortunately, wasn't able to attend so I'm here in his place I'm really excited about this panel. We're here for the digitizing global trade panel. I Think it's really appropriate that we're doing this in China the world's biggest actor in global trade And also increasingly the hub of e-commerce innovation We think about about what Ali Baba has done in China and it's really you know reshaping the way we think about e-commerce globally So I think this is a great time to be doing this and I'm really excited about this panel as well It's a very diverse panel. We have people from multi-nationals a government minister from Malaysia an entrepreneur and consultants looking at technology issues so The key question that people are going to be addressing is how is digital technology? Transforming goods and services trades cross-borders We'll have a discussion about this and then I'm going to open it up to the audience So feel free to address questions to the panelists So let me just introduce the panelists. So to my immediate left is Hank Wu Hank is the chairman of True Tag Technologies He's a surgeon an inventor an entrepreneur and He's led the development to over 20 biomedical devices innovations however Next to him is Alan Gershonhorn Alan is the executive vice president and chief commercial officer for UPS Currently he directs global sales for the company customer relationship management segment marketing and e-commerce among other things and Then next is minister Mustafa Muhammad He is the minister of international trade and industry for Malaysia He's held various roles in the Malaysian government Including his minister of higher education minister of agriculture and agro-based industry and since 2009 The minister of international trade industry And then finally we have Paul Diary Paul's the chief technology officer of Accenture the consulting firm He's responsible for R&D technology strategy emerging technologies strategic investments and alliances Please welcome the panelists So I'd like to kick off And I'd like each panel just to address What they think is what's the key idea that we have to bear in mind when we think about the impact of digital technologies on supply chains Hank, maybe we could start with you Thanks very much. First of all, it's really a pleasure to be here and You know my my background is really in health care. I'm a surgeon by training So I my perspective is really sort of a defined more from a health care perspective. Give you an example, right? 96% of the internet sellers of pharmaceuticals Do not meet the standards for safety for patient safety and advocacy The global trade for counterfeit drugs is over four hundred and thirty billion dollars Millions of people die each year from the ingestion of drugs. They're not genuine So from our perspective safety Safety is one of the most critical issues. In fact, we just learned last week in Geneva in another meeting with the war economic forum That the security of food medicine nutritionals is the number one potential Global destabilizer. So that's kind of from my perspective. That's where Digital security can play a very substantial role in ensuring the supply chain of everything we put into our body That's fascinating really really interesting point Paul, how about you Alan? I'm sorry sorry, I Also want to say I'm thankful for for being here today and You know, I think that you know one of the most profound changes that we're seeing with The the effect of the digital economy on global trade is the fact that you know global trade used to be for the big boys and girls the the multinational corporations and what we're seeing now is that small medium enterprises that Traditionally have always traded very locally can now you know compete, you know in the global economy and a big part of that is really two factors one, you know the the impact of The digital technology as well as you know robust supply chains like Like the one that one that UPS has and that's it's having a profound effect And I think you know a good example of that is when you look at retail and e-commerce, you know You know in country traditional retail brick-and-mortar probably grows about you know one and a half times GDP Is a is a good number to to think of about that online commerce within countries is growing at about four times GDP But cross-border e-commerce is growing at about seven times GDP and while it's a it's on a much smaller base you could see the effect of Of the opportunity that these SMEs are seeing with being able to expand their their customer base not only From locally to country-wide, but but to the world That's interesting. Yeah, it's a really profound Transformation when you think about the opportunities for smaller companies to act on a global scale Minister Mustafa, how about you? I'm looking from the Policy perspective of course dawn Let me look at my country briefly and I said this year. We are chair of I said and lots of meetings in Kuala Lumpur In Malaysia digital technology has played a very important role and you're right small billion enterprises You have Uber taxi, you know, which is big by Malaysia. We have grab taxi, which is Malaysian small company, which is opening six seven countries now So this is an example. We have the airlines the banks and digital economies very much part of the part of the Strategy and we are one of the most straight dependent economies in the world And because the digital technology is very important and we have in place Policies to encourage the use of digital technology. That's on a national Malaysian point of view on the ASEAN We chair ASEAN. I chaired a meeting of ASEAN economic ministers two weeks ago and Early this year we launched an ASEAN ICT Master plan, which is to and that's about putting policies in place about getting more people coming on board about infrastructure about connectivity about narrowing the gap between I said has got ten countries and some are poor some very rich Singapore is a developed economy Allows because it is a developed economy. So the challenge is how to bridge the gap So this ICT plan is about bridging the digital divide, you know, you look at Mobile penetration as well as 20% in some countries 140% in some of the countries so a big gap So for us in ASEAN trade is important 25% of trade is intra trade and e-commerce is important And we have we are at the end of this year launching a plan to develop small medium enterprises and of course E-commerce and digital economy is very much Is is is central to all this so we depend on trade and investments ASEAN and Monsour Malaysia Therefore, it is important for us to put policies in place to make sure that we are not left out In this competition is becoming more and more intense out there Right. Okay. So using e-commerce to really drive Economic development trade and economic development Yeah, okay, good Paul. Yeah, just building on what the you know And the with the minister said if you kind of back up and look at where we are with with all the digital technology We're at the very early stages of what we believe and I think many believe is a massive shift in the economy in many ways as as As the economy and as as industries and as countries around the world adapted digital technology and transform and we believe it's very It's very disruptive And I yes, I think we're at a pivotal time and really thinking through what is the impact on whether it be health care transportation or or countries like Malaysia in the future. We've done some work recently We looked at the impact of all this from a from a GDP and economic perspective And we believe that the digital technology and that we're seeing the digital revolution will have a 14 trillion dollar impact on the global global GDP and the global economy by 2030 so 14 trillion dollar Impact one point eight trillion of that in China alone And the interesting thing when you look at the analysis is that there's a big variable component about of that which will be Which will depend on Companies and countries taking the right moves proactively to reshape themselves to benefit from what we're seeing and I think we Look at it from a supply chain perspective We're at a stage where we're starting to see you know that play out We need to look at you know the move to things like digital supply networks new forms of you know technology informing new forms of transportation, you know, we mentioned uber earlier and And you know that's causing a major disruption So what we what we believe is really important at this point in time for every company every country every Policymaker to think about is how do you respond to that disruption and what changes do you make now to position yourself to take advantage of that? Opportunity that's coming. Yeah, no, it's a massive shift. It's for sure I'd like to turn the the conversation to the effect how supply chains are going to change as a result of digital technology What changes are we already seeing? and Alan UPS you know sits at the heart of many global supply chains So you guys really have a finger on the pulse of the changes How do you see supply chains changing? Yeah, so, you know, you know a couple things You know, you know first the you know the the express industry, you know Which is one of the markets that the UPS plays in is you know on a global basis is really relatively small compared to You know the ocean freight business and the air freight business and what you're seeing is that? You know more and more with this e-commerce trend that it's not just always, you know business to consumer It's also b2b, you know the you know companies are working on going more direct To consumer or to the the business consumer, you know bypassing What what maybe traditional channels? So you're seeing smaller shipments Less less inventory, you know today, you know in the United States not to Use the same exact numbers poll used for something else, but there's about 1.8 trillion dollars of inventory right now You know sitting in the United States, you know on a shelf somewhere Waiting potentially or not potentially for for for somebody somebody to purchase So there's there's a big opportunity here with the digital economy to you know better align You know supply and demand as well as to cut out steps in the supply chain that allow for more direct You know smaller type shipments and that's what we're seeing the other thing I would add is that you know when you think about retail, I mean retail, you know traditionally has been very local And I know that you know I was I was on a run this morning with one of my colleagues And yeah, you see a lot, you know the luxury brands are probably some of the brands that have gone global more quickly than others But but generally speaking, you know You know brands or certainly Multi-product department store type of brands are local even sometimes smaller than than a country footprint But what you're seeing now is that you know, you know retailers are able to reach, you know consumers You know around around the world and that's traditionally an industry that has had very little You know trade or supply chain outside of a country border industrial manufacturers You know high-tech companies energy and and And some other areas, you know have been traversing the globe for quite some time But there there are industries out there like retail that haven't been doing that and that's that that's going to demand a significant look at supply change so that we can You know handle the needs of the of those type of businesses to meet the needs of the consumers say say Paul do you see do you see those kinds of changes as well? I mean when Sort of a retailer who might have been purely u.s based Small retailer suddenly has the ability to you know export around the world and do that very efficiently You know what are some of the kinds of changes that have to happen on the management of that company to make that so make that work Yeah, I think the the way I look at it with the way that supply chains are transforming There's two big types of changes one is compressing time the others is a compressing space if you look at the other compressing time You know the what we're seeing is a major shift to connected products You know things that are connected in real time which transform the way you think about your supply chains if you have a connected vehicle That you know connected vehicle. That's we in real time understand drive behavior characteristics pretty preventive maintenance needs and such You can dramatically transform the products and services you sell to the customer by having real-time information Continuously from that customer and you transform the way you think about the supply chain and delivering services So you can compress time in that sense and you can also use you know in that sense predictive analytics in a very powerful way there's a Big one of the largest water and sewage distributors in Europe But we're working with a program on a program with them to instrument their whole All their facilities so that in real time we can understand the flow of water and sewage through the different pipes for the water and sewage and Understand how to operate the network more efficiently and they found that just by having better information on the network They could they could pump 17% more water through the same pipes Which is a dramatic in increase in acid efficiency and that's their form of the supply chain that they deal with So that's in the compressing time and efficiency domain in the compressing space I think there's a lot of new technologies that we haven't fully exploited yet if you look at autonomous vehicles and the The the the impact that they can have on on supply chains and that they're already having in industries like mining We look the supply chains in those industries if you look at things like drones Which are being used to you know delivery many companies already in you know on a certain basis and expanded use of that technology And then look at things like 3d printing which is really virtualizing the product itself We're doing work with energy companies where for their oil platforms They may print a lot of their Replacement parts on the oil platform to avoid the you know supply chain of getting goods out to offshore drilling platforms and things like that So you know if you look at that time and space element, I think there's a lot of technology That's really transforming the you know the premise on which you even think about constructing your supply chain That's fascinating. I mean does that require huge investments in technology for companies to be able to handle this or how do you how do Companies actually adapt to those opportunities? I think it requires investments in technology What we believe you know what we're seeing is it also requires a different way of thinking about your business model in many cases You might need to collaborate with others for the information that you know that you need to you know to construct the Your supply network in that sense. So it's leading to you know new technology investments We you know to companies needing to experiment and innovate with with new technology at a smaller scale before they expand And then also think about who you who you partner with that can bring in those capabilities What technology companies but what also what companies across other industries example? I'll give you his his work that visa is doing with with Pizza Hut and you know and some car companies to look at how they can create a commerce platform for a car And so that's it's a financial services company coming together with a in this case pizza hut was a pizza delivery company in the US And in a car company to look at how they you know create a new a new connected car Commerce platform we see a lot more those cross industry models coming to play as you think about delivering different services Minister Mustafa I'm interested in the policy perspective Malaysia's leading the effort on the ASEAN economic community It's identified Conactivity and e-commerce is a key plank in that effort How do you see how do you see e-commerce really driving this effort? e-commerce is catching up and Let me look at two perspectives one is the small minimum enterprises Which are catering to the domestic market? secondly e-commerce in the context of multinational companies operating in ASEAN and How they are interacting with with local small minimum enterprises to be part of the global supply chain on The on the SMEs indigenous SMEs supply in local market. There's been quite a You know radical transformation. I mean you got you got to embrace digital economy and Those who do not do that would be left behind I mean there's so many success stories in my own own country people selling small items like food biscuits those kind of done very well and The big examples would be Asia which is leading in e-commerce Throughout the region. So these are I mean you go to embrace otherwise you left behind this point about about cutting time Becoming more efficient Israel. I mean you will not be productive. You will not be able to to compete. It's a very fierce environment out there. So number one is it is important for Even for those enterprises catering to domestic market to embrace Digital technology it is a must so investments in technology human capital There is this realization that to be successful You need to embrace fully Digital technology together will be the connection between multinationals and the local enterprises Here again The digital economy has done a lot in terms of getting them connected to the world through procurement and you know sharing of best practices pricing policies and that is driven That has made some of these enterprises Globally competitive. So that has connected them to the world. They are part of the global supply chain So you have multinational enterprise in ASEAN in Malaysia Which has got links with small medium enterprises in my country and a few other countries They started small but being part of this big supply chain. They're supplying the lonely To our companies operating my country Malaysia, but also to the world So that's a very interesting phenomenon whereby the market would be small In the beginning but as a result of them as a result of them coming on board and embracing digital technology The world is the market. So there are some radical changes going on. But the point is People especially small medium enterprises are beginning to realize that if they don't embrace the digital Economy or they're not part of it, then they're going to be left behind. They're not going to be efficient They're not going to be Productive and they're going to be left out and they're not going to be Successful in the business and they cannot be part of the global economy Right, right, okay Hey, one one thing that's interesting one side effect of Digitally enabled trade is that things are much more efficient for counterfeiters as well as legitimate businesses Do you want to tell you talked a little bit in your introductory remarks about the risk of Counterfeit medical goods and other kinds of things can you talk a little bit more about the scale of the problem Of what some of the solutions might be sure happy to So the the global trip for for counterfeit goods is in the trillions of dollars Right and many believe that is actually the most profitable business in the world Because it impacts every product every market everywhere without exception It's in the trillions, but whereas someone may say alright It's okay for me to go buy a fake Gucci bag or product shoes because it looks pretty good And it cost me less that that might be okay But it's not a victimless event because jobs are being lost on the other hand Nobody in their right minds wants to take a fake drug for diabetes for cancer chemotherapy for high blood pressure and and guess what Every parts of the world whether you're in the developed world or a developing world There is an equal chance you could pick up a drug. That's a counterfeit It could be a genuine drug or if it could be filled with brick powder for all you know But the magnitude of the problem is really significant right hundreds $430 billion year according to the latest statistics from the World Health Organization But digital technology actually gives us an opportunity It provides us with an opportunity to be able to have a direct impact on that to allow stability to track and trace and in fact authenticate product and in many ways to enable The internet of things in such a way that we can significantly dampens the harmful effects I'll counterfeit goods especially in the area of counterfeit medicine So that one of the reasons I'm here and dahlian is because one of our portfolio companies true tech technologies was selected a tech pioneer by the forum and This company is developing a platform a security platform to address this very issue of product authentication All right, so the company has developed a chip. It's a size a piece of dust right and within each dust it Millions of combination of optical spectral data can be embedded but this material among other things is edible It's ingestible which means it can be applied to Every one of that 1.5 trillion pills made in the world every year and by taking out your Phone you can scan it and can tell you who made it when it expires. What are the drug interactions? Who's the distribution network the entire provenance of that product? Why because labels and packaging is how products are identified and tracked through the supply chain today But labels and packaging are inherently easy to mimic and to copy anyone can do it A high schooler with a good printer can do that However with the technology has ability to basically fingerprints a set of unique proprietary Digital identifier that's unique and a very fabric of that product makes it inherently difficult For counterfeiters to tackle that problem number one number two to allow us to be able to digitally track Products to the global supply chain on an individual item basis Without any reliance on packaging labels That's really the future that we see in using digital technology to fundamentally transform the marketplace So is this the future or is this already here? Is this something that we are we are the future is sort of already here Okay. Yes. Yeah That's fascinating. So on this this issue of security and supply chains. I mean Hank raised a really interesting point and Paul I'm curious. I do you think this kind of thing can work in a global supply chain? Are there other kinds of things that we can do to counter counterfeiting? I think yes, it's thanks any other the future is already here It's just unevenly distributed is the famous quote by William Gibson India, and I think that's true in this area I think there's this technology. I think Hank's got some in his pocket you know that this technology that his company has that that That you know can be can be applied in these cases now We're doing work with companies around drug seal serialization to Individually fingerprint pills and things like that. So I think that's that's possible to do today There's a cost-benefit, you know in terms of what it what it takes to do that And we're seeing that in the food supply chain becoming more important. There's a major seafood Whole seller in the United Kingdom the United Kingdom who? They you could whatever you buy a can of their seafood or whether seafood products It's got a unique tag on it and you can look at that You can look up that tag online and figure out where that fish came from what what ship caught it when it was caught How was patched etc. So you can get tremendous amount of information on the supply and the food supply chain in that case So I think it is important and I think the you know being able to provide customers with better you know with better authenticity and Better trust around the products they're buying is going to be essential in this in this in the digital world because the a lot Of the products and services we're talking about connected vehicles connected homes, etc Are very involved very Invasive services for customers that are very close to them that involve a lot of private and very personal Information and I think the ability to make sure that your first of all that you're providing it in a secure fashion And then it as a company that you're taking the appropriate trust and respect for but not just you know Not just protecting the data, but with for the customer's privacy considerations is going to be a key differentiated between Customers invite if you look at what's happened to date in in digital a lot of the The state of the art and digital right now is exploit exploitation of customer information I can maximize the click-throughs and things like that I think with connected products and internet of things and these very connected supply chains it shifts to how do you really? Ensuring gain the trust of the customer and provide the services that they want you to provide right right interesting And Alan how about in the supply chains the UPSC's you see new ways of ensuring sort of the security of this thing Yeah, you know, I think you know the opportunity is absolutely immense and certainly what what Hank and his His company are doing in that area is just is fascinating. You can see the power of Digital technology and what it can enable but what we got to think about is yes We want to stop all these illegitimate goods and certainly You know, you know counterfeit health care Which you know could be Devastating, you know getting getting getting into the supply chain on on the mass basis that Hank described but But we also have to talk about, you know, how we're going to speed the legitimate goods, right? The idea is to use digital technologies and advance supply chains to stop The illegitimate goods and at the same time speed the legitimate goods and there's there's still a tremendous amount of work That it needs to happen there with public and private partnerships, you know, the the the customs regulations and the other regulatory authorities you know in some countries are more advanced and technologically aligning, you know with supply chain providers like UPS and and You know some of the the shippers of you know of pharmaceuticals And so on and so forth, but but there's a lot to be done there and technology becomes that that great enabler I mean we you know many of us that flew here from from another country, you know filled out the little paper card You know on the on on the aircraft and there there are a lot better ways to do that You know going into the United States at least in Atlanta now. They finally automated that card and and not only is that a A cost reduction, but but it's also making you know the the human supply chain You know safer and more secure because because having that data in a in a digital format You know allows allows you to do a heck of a lot more with that to make sure it's it's safe and secure And that's the same thing, you know for goods and certainly with with e-commerce and lower cost, you know lower overall value of Goods crossing borders, you know customs authorities are are challenged with the amount of goods that are coming in and And a way to deal with it effectively doing what we need to do, you know stopping the illegitimate goods and and And and speeding the legitimate goods. So, you know, we're working, you know in partnership with governments on On single window clearance, which which really means, you know How do we get all the regulatory agencies together and make sure that the data that we provide is is holistic and allows Every regulatory authority to deal with that data in a in a in a fast manner But but but do their job well and and and protect us from the illegitimate the goods coming in And and also working with the data analytics to target in advance, you know You have an opportunity and in most cases, you know some, you know, if it's an in air freight It's sometimes it's 10 20 10 to 24 hours by the time the the data is in UPS's hands that we can You know get it to the customs authorities of Countries so that they can begin to run the analytics on that so when the when the goods make it to the country, you know It's red light green light, you know, it's hey We already know which goods we want to stop all the rest are going through So there's there's a big opportunity here and that's that's an area that we need to address Which is is going to be a win-win for for governments and for businesses and for consumers going forward Yeah, that's interesting a minute raises the issue that you can have all the digital technology you want But there are still trade rules and you need sort of Customs agencies to help you out with it. Yeah Minister please. Yeah, this is the issue with traceability, which is very important for drugs Consumers are very careful now standards, you know are very important Looking at agriculture It's another important area In the area of palm oil my country and in Indonesia. We're the biggest producer of palm oil and consumers are demanding standards of course environment and traceability so this is an issue but For us, there's got to be some kind of balance on one hand You want to ensure the strictest of standards at the same time? We do not want these to go overboard develops into a non non-tariff measure, you know, I mean so I mean it can be used by countries to prevent the entry of certain groups into some developed market So this is there's got to be balance Yeah, of course we recognize as producers of palm oil, for example, it's very important to have this traceability Consumers have right to demand where the products come from and we're doing that in in ASEAN But we have to make sure that this is not be used as a measure to obstruct Legitimate and fair trade. That's one point. The other is the issue of regulations. You mentioned Single window we got this is going to be rolled out in ASEAN and all the documentation It's going to be there and you're right. I mean with this full implementation of single window in ASEAN we're going to be able to to improve Firstly on customs clearance But some of the addition of standards will be incorporated in that so from the policy point of view We need to provide the appropriate environment to ensure That all these things are put in place traceability counterfeit Drugs quality and culture products. So my point is firstly Yes, we recognize that this is important consumers demand that but we have to make sure that it does not result in unfair trade And secondly for governments, it is important to have a proper policy framework To ensure that we can deal with all these issues security and traceability. Yes. Yeah No, it's a really important issue to think about when crafting international trade rules One thing before I turn it over to the audience for questions You know, we are here in China having this this session China's home to Alibaba and many other sort of e-commerce pioneers And you know, I live in Beijing and I should have been amazed to watch Sort of the rapid advance of e-commerce and how easy it is to do things via mobile phone Have a package delivered the same day in many cases Do you guys think that the future of e-commerce is here essentially to what degree will we see? The development of e-commerce overseas looking like it looks in China. I'm just curious for your views Paul any thoughts on that? Yeah, I think there's been great innovative. You look at Alibaba and you know Some of the models that have been wildly successful in China I think they show a great way to adopt those models elsewhere in the world I think there's you know similar you know models coming out of some of the you know Silicon Valley and truck doors and others other spots in the US and in some other markets But I think increasingly if you look at the you know the pace of technology innovation in China and elsewhere you know through through the Asia region and And the scale of the investment in the way that the scale of problems or the scale of the opportunities They have in the scale of problems that they need to solve. I think we'll see many more Many more very innovative solutions and business models and technology solutions that come out of you know China and other markets have moved back west and we you know We're seeing that happen in China We're seeing it happen in India and some other markets too where the technology technology is not you know coming from the West But technology is coming from those countries and in many cases providing better models and better technology to adopt back to Western markets Alan do you see is there anything to be learned in terms of supply chain management from the way things are evolving here? Yeah, but I I think you know, we're kind of at the beginning of the future here. I'm not I Think marketplaces are a phenomena that will Continue to grow. You know, I think it it comes down to you know, the The power of the internet and I think a few years ago folks referred to the to the information superhighway You know, that's kind of a an old coin term now. It's really it's really the you know the The you know the my way the my way superhighway, right? and and and we're going to see a lot of a lot of changes that are going to be enabled by Digital technology some of some of the some of the things, you know, we're looking at And that we're engaged in is you know Just something really simple, you know, we make a you know, you know millions of If not billions of home deliveries every year and and anybody that's that's gotten a home delivery or not gotten a successful home delivery It doesn't matter if it's UPS or somebody else you get that delivery notice on your door and Now you're now you're going to try to figure out, you know, why did I get the delivery notice? You know, what do I need to do to receive my package? We we again through through some of the technologies we have now have a technology called UPS my choice that you basically every UPS package coming to your home you get an alert, you know, whenever you want it and When you get that alert, you know, it tells you who the package is coming from It allows you to reroute reschedule that package Let us know where you want us to leave is if you want we predict we algorithmically predict a You know four-hour delivery window that we're going to be at your your home through through data analytics To to ensure that you know, we we establish the connectivity with you And what's amazing about it is the response, you know, we've it's been out for you know You know a little over two or three years and we already have, you know Over 17 million folks signed up and there's a hundred fifty thousand weekend and week out That are that are signing up for the service and I think it kind of speaks to you know What the the demand is out there? to be able to To find what I want when I want it and get it get it exactly where I want it and So it's so it's so it's very exciting At this point, I'd like it to open up to the audience for questions If you have a question, please raise your hand and if you can state your name and your company. We'd appreciate that See one in the back there. I am Frank Sincher. I have a question for the minister and how the digital technology Will impact the current international trade framework say WTO? on the other way around how the current International trade framework like WTO will be a current obstacle to the development of digital technology and in the international trade area Well, thank you WTO has been around for quite some time we began with gas and WTO has evolved into Something quite, you know, it's changing with the times So e-commerce and digital economy has got to be part of Trade policy in WTO. Let me zero in on one example or two One is we have what we call the regional Compensative economic partnership negotiations involving 10 countries in ASEAN Malaysia and other countries in ASEAN and six other countries including China and We are in the process of negotiating this this trade agreement among 16 countries and e-commerce Is very much part of the discussion. So in many trade negotiations and certainly trade policy We are responding. You might say we are We're not moving fast enough of course developments in technology are moving rapidly But I can assure you that, you know, we're catching up very very fast and in the asset negotiations We have it. We are discussing a chapter and Malaysia happens to be chairman of this working group on e-commerce So this is one example and at the ASEAN level, I mean We have as I said, as I told you and I CT master plan We also have a single window to customs initiative. Yeah, so these are changes in technology which are which are happening and I think we are responding quite fast and this is so important to facilitate growth and trade In China and throughout the world, you know, we all adopting I mean both the hardware and the software are moving and in tandem and I'm confident that the various Initiatives being put in place both at the national and regional levels ASEAN and other regions will be able to take full account of Developments in technology and software. So many of these these things are already incorporated in the number of Trade agreements and trade negotiations and our set regional comprehensive economic partnership is one such example There's there's a discussion on e-commerce. Yeah, I mean providing the broad policy framework In order to ensure that, you know, we are not left out. Thank you. Thank you There's another question down here in front Thank you. I'm coming from the new media platform Shen Si Xing actually. Unfortunately. I'm an ex consultant So my question is to mr. Poe actually the CTO is quite weird position in a consulting firm So my question is how do the consulting firms or consulting companies transfer their business to better feed or support? to the digitalized world Yeah, that's a that's a great question and something where we think about a lot and CTO is a is an unusual position at a company like ours But we created the position because of the importance that technology plays in the you know digital transformation everything that we're seeing across across every industry and The way that we're transforming our company can't talk to the industry overall but the way that we're transforming our company is to Look at you know providing services in a different way in the digital world What we believe in a digital in the digital economy is that companies want to buy outcomes they want to buy They don't necessarily want to buy a team of consultants to solve a problem for them What they want is increased efficiency or higher sales or more efficient manufacturing processes So what we're what we're doing with our company is restructuring the way we go to market in the way of restructuring our business Around being able to solve problems like that in a way where you know companies can buy them very differently in a Consumption-based basis where they're buying outcomes of problems rather than buying you know inputs of consultants to solve problems We believe that that's the you know That's what the digital world means for a firm like ours, and that's the way we're structuring our services accordingly Interesting before we go into a question I think Hank you as a point you wanted to make about sort of the future of e-commerce and Our moderator asked a really good question about is the future here? Yes, right? Yes, and I had just a thought about that because in my mind the future is just beginning In many ways. Yes, right. So so you think about the world today, all right everything is identified by What the label or package says including all of us right because you have to take out your passports and your driver's license and And your work not make form batch, which I'm not wearing right now in order to know who you are But imagine the future right imagine the future where you go walk up to a product or a person and You tap on your Google Glass Or you tap on your iPhone Okay, and bid it into a very fabric of a product whether it's a Heineken beer Or a Chinese tobacco or milk powder or pharmaceutical or one of your packages Devoys of that labor package. I can know exactly what that thing is or who you are or if your suit is Louis Vuitton or Ross dressed for less There's going to be a part of the future where information you'd be Far more ubiquitous and even we can possibly imagine today and to your point earlier Paul is just a really good one Right technology would be used to decrease illegitimate use but also dramatically events legitimate use right the average Senior citizen in the United States takes 14 pills a day every day It's extremely confusing. They can't get it straight if they spilled the bottle all the package on the table They can't they can't recover the 14 pills. Some of them take 15-20 pills Imagine you take out your iPhone you get a do a single skin You know which pill is what when you're supposed to take it and upon consuming that that pill It's locked and registered and memorialized for you your parents your family and your physician Think about that digital future that future is just beginning So so I think you asked a really critical question. It's the future here. Yeah, the future is starting. Yeah, so Yeah, the changes are truly fascinating and it does raise this question of whether you know companies are actually ready to handle all the Data that's going to be coming back to them. You think about you know every single person and all the data coming back I know they're already starting to grapple with that More questions out there a lots of them. Why don't we take one from the side over here the lady in the front microphone will come your way Just one moment. Oh Sorry Down here in front, please Ali Clark from trade shift Thanks for talking about the Internet of Things I have a question for the group. Can you please share how digitizing supply chains and global trade Makes way for the circular economy and such things as chemical awareness in design or a reverse supply chain Second part can you Additionally, how can companies begin the process of digitizing trade when it's so drastically disrupts the model of a linear supply chain? Okay, we'd like to take a take a stab at the circular supply chain I'll take a cut at the second part of the questions. I'll enter the second we can work work backward I think the Questions how do you move from a linear supply chain to you know what we would call it a digital supply network? Whatever you call the the new form of a supply chain and one thing we haven't talked a lot about of the panel But I think is is really important is the role of of new platforms in That are that are needed to provide services in a different way. I'll you know just give an example You can many of you'll be familiar with what GE is doing with their pre-dix platform or what Phillips is doing with their health suite Platform for health care and there's many other examples like that And the reason that those platforms are springing up is because in it in a connected world with Internet of Things and this digital Digital supply chains the we're not just delivering products or services. We're delivering information continuously You know have a two-way connection of information from being provided continuously and we need you know We need common business platforms and technology platforms to enable the right flow of Of information and services so one thing that we're seeing in many industries is a race to establish those standardized platforms So you see it in industrial equipment with what GE is doing versus Siemens and Schneider and other companies that are in that that industry and we're seeing multiple you know platforms like that in the health care industry and Only a couple will succeed and I think the there's a you know I think there's a What we're seeing among the companies in those industries is companies are deciding do they want to be the platform setter Or do they want to be the participants the platform participant in those industries and that's and that's a strategic decision that many companies need to make So it's a it's a it's a decision on how you structure your supply chain But there's also a decision on what to what extent do you want to play that role in your industry of you know Standardizing the information flow the way products and services are delivered via these you know digital platforms that are emerging Yeah, I would just add I think I think a part of this notion of the circular economy is about you know, how we run our supply chains more sustainably and You know, we've got a new Dispatch program out there. That's that's did a digitally enabled called Orion for our our delivery delivery drivers and just to take a step back when you think about the number of ways that you could go about you know the errands that you have on the weekend if you If you were to have to run six errands on the weekend, there's actually 720 ways that you could run the order of those errands And if you go up to 12 errands, it's 500 million ways now now UPS We've prided ourselves for years that well, you know, we used to have a slogan called the tightest ship in the shipping business and And I think back then we were the tightest ship in the shipping business But we found out that through through digital and technology we could be that much more efficient and this program now Takes a driver's route and a typical driver could have a hundred Pickup and delivery stops a day and we found out that through technology That this Orion machine Could cut six to eight miles off a driver's route Delivering all the same pickup and delivery stops And and our engineers when they first saw this they didn't believe it There's no way that anybody could do it better than us certainly our drivers didn't believe after coming back the next day That they actually cut six to eight miles off their route doing the same exact work They did the day before and meeting all the service level requirements of our customers Well that's that that's that that's it's extremely powerful because because what that does is it saves? UPS a hundred million miles a year of driving It saves ten million gallons of fuel and it saves a hundred thousand metric tons of CO2 and to boot it saves Cost of about three hundred four hundred three hundred and four hundred million dollars a year You know, which obviously can be passed on to consumers shippers and and certainly, you know make UPS, you know, you know Returns to our share owners Even better and I and I think that's that's the power of digitization when you apply that To how you optimize the entire supply chain from you know source to shelf and then back through recycling It's it's it's it's endless. So you're right there. We're at the beginning of the future Has anybody estimated the potential savings from those kinds of efficiencies to supply chains? Yeah, so overall I mean the Orion project for us in the United States is about 300 to 400 million dollars So you can imagine, you know, applying that type of data analytics to To supply chains and you know and supply and demand. It's tremendous. I talked earlier about You know the the amount of inventory that's out there And much of that inventory is you know these days with high-tech up obsolesces even in health care, right? It obsolesces if it's if it's not used in it in a timely manner. So there's just tremendous amount of Saving is an opportunity there, right, right more questions gentlemen over there Hi, it's my name is Larry stone from BT the one end you've got Digital trade you've got a debate around free and trans an open trans border data flow Which for example the trade in services agreement with about 50 odd countries on the other hand You've got a lot of countries developing data Localization laws and strong data privacy laws and how do how's the panel see those things balancing over time? Mm-hmm Who would like to take a crack at sort of adapting to the laws that companies countries are developing around this? I mean, I'll take a stab at it. I mean I think that that you know, we're all concerned about, you know, privacy of data And so I think it's it's got to be managed very carefully and securely and And where it's needed to to ensure You know secure, you know high integrity safe supply chains We need to enable that information to cross borders because it's it's it's absolutely critical on the other hand You know, we've got to make sure that we're managing that information You know in a way that that that absolutely makes sense so that it's not being used for any other purpose then You know the desired purpose for You know, you know transfer of goods or or services Across borders, so it's a you know, it's a it's a very technical issue But we've we've got to spend the right amount of time on it Indiligence to make sure we craft something that that's holistic and make sense and don't you know move one way or the other down the Down the extremes or we're gonna We're gonna stifle the future right the bright future. Yeah, and Hank I guess privacy issues for you guys It's something very serious to consider There are few things as private as the medications that you take and how often you take them and Potentially the the chips that you have could be used to track that And thoughts about how you tackle that There's really two components of that right under one hand the product information is completely available and open to the public Because everybody has the right to interrogate to understand what is it that's in front of them, you know, whether it's a coke or Nike T-shirt or Gucci bag or your pharmaceutical. All right, that information needs to be made available and easily interrogated by the public When the public interrogates that information, there's a tremendous amount of data there. Of course, we will ask for their permission if that data can be Combined with other people's data into a much larger data set basically But you know to that circular economy question, which I've been thinking about since you asked it We had a session in Davos earlier this year Where the CEO of Walmart was in the same panel to talk about the circular economy, but it goes not just from Cradle to gray but it goes from cradle to cradle All right because product can recycle through the food chain many times over but in order to do that You must have certainty what that product is where it came from where it's going You have to be able to document a track its entire provenance through and through basically so you have to be able to Securely identify that product forever for its entire life of its existence We have time for one more question Okay The woman there on the aisle, please One moment a microphone coming away Just just a moment. There's a microphone coming to you. Yeah Thank you I almost gave up any code from Singapore management University if the future is here Then what kind of talent or human capital which you need to develop to you know Meet the needs of the digital trade economy of the future very good question So what are the human capital implications of all this this technology? Firstly, let me venture. Thank you any Firstly going back to the earlier question. I think there's a need for regular communication and dialogue between the governments and various Organizations international with companies and that dialogue has been going on. It's important to strengthen the process So that we in a position to have a set of rules regulations on security So I think that's important the regular communication and dialogue between the various stakeholders and Governments and also international organizations on human capital. This is indeed a challenge especially for developing countries and I think for us where we come from the digital divide certainly is a big issue I mean that is a problem in itself Trying to get more people on board and trying to get more people to embrace digitization and the internet of things We do not want this phenomenon to create and even a bigger disparity in incomes and then that there's a danger Of that happening if there's no policies put in place. So human capital Development, I mean I'm talking at a general level of course It's certainly important in the context of narrowing the digital divide The other is to increase incomes in the end. Whatever we do as a politician. It's got to benefit the masses the people Throughout the world develop and developing countries. So for that to happen Of course human capital development is so essential otherwise Some parts of the world are going to benefit from this others are not and finally this issue of the big And the small I mean we know that the digital initiatives are coming out only from Silicon Valley It's coming from all over the world. I was reading one piece information. They call price sniffing I think the Singapore example Professor of Singapore this wash company. Yeah, which developed the software and it actually detects the for the same kind of model the same kind of Brand of watches this company's a developer software to find out what other Comparatives I mean what what's the kind of price they're selling the consumer by having this application This company's been able to to offer very comparative rates to customers. So you know, we need to nurture and develop human capital and Capacity building also at a small level. I mean multi-nationals. Yes, but small medium enterprises Manipulate that the taxi Uber and grab taxi and others a good example It's not a small and now they become in China and other places they've become so pervasive So you need to get the smaller guys evolve in this as well. Thank you. Great We're just about out of time. So I'd like the panelists just to wrap up Just tell us sort of the one one key takeaway that you'd like to leave the audience with Paul could I start with you? Yeah, I guess that the key takeaway that I'd leave is is I think it's the time to think for companies to think, you know About the radical disruption of what they do and one of the things We've we did a survey with the forum earlier in the year One of the things that turned out turned up was that 87% of executives believe that this is disruptive for their companies They're gonna really transform their companies, but only that's 87% only 7% felt they had a plan and knew what they needed to do So there's a tremendous Chasm there and understanding it gets a little bit to human capital and skills that that you need to go through the Transformation I think what's required is to really think differently and think radically about where your business is going to make Sure, you're one of the ones that thrive in the new world rather than one of the ones That's challenged in the new world Minister firstly, I think whatever we do We need to make sure that we're good outcomes and one would be increasing the incomes and opportunities Business opportunities for big and small Number two, I think it's important to be aware that we need to reduce the gap, you know Between small and medium enterprises rural and urban this is very important We do not want and the gap to widen as a result of digital technology Finally, I think it's important for governments to respond quickly National governments and international organizations to provide a broad policy framework Which is conducive for development of a digital economy on this on this subject I think it is gratifying to note that many countries have done that We all realize the importance of the digital economy and in ASEAN we've got this ICT master plan and every country has got that So the challenge is on implementation So it's important to provide a good policy framework to enable the orderly and proper development of the digital economy to benefit The the masses and to make sure that it does not lead to a widening of the income gap between the rich and the poor Thank you, Don. Thank you, Alan Yeah, I would say my final thought would be that due to the digital economy and technology advanced supply chains You know for small medium enterprises the You know international, you know borders have never been more permeable At the same time, I think that due to the the same phenomenon of the digital economy that you know the the opportunity to To stop the illegitimate trade that that occurs out there has has never been, you know You know more and more and more in our grasps. So just a tremendous opportunity Out there for small and medium enterprises No matter where you are most of your consumers are sitting outside of your country borders And Hank Okay, a few things next time when you eat a pill or take your food Think about where it came from and how do you make sure it's not a piece of brick dust or recycled paints? Number two, I forgot to actually show you these chips because I was asked to so in this little vial We have four million chips size a piece of dust each with millions of combinations spectral data I'll share a funny story with you right so security is really tight I was walking through the the doors at the Shangri-La last night And I forgot I had this little bottle of white powder in my pocket So I got frisked right by the lady so she got she came to this. She said what is it? So it took me a while to explain it But Think about a future where labels are obsolete Right where digital information is embedded in the very fabric of everything you touch in life Think about that future because that future is going to be here much sooner than any of us anticipates Great and with that we'll end the panel session. Thank you very much to the panelists