Digitising business and removing tens of millions of paper documents would boost small British businesses’ overseas trade by £25bn over the next four years, according to new research.
A report by the International Chamber of Commerce (ICC), seen by City A.M., argued that UK firms were trapped in the “bureaucracies of the 16th century” and must be brought up to date for the modern age.
It found that removing unnecessary reliance on paper and digitising trade would save time, speed up transactions and allow small and medium-sized enterprises (SME) to focus on growth.
According to the report, there are 4bn documents in circulation in the international trade finance system at any one time, with an average of 20 to 30 documents per transaction.
Moving to a fully digital system could cut down the time it takes to complete a deal by as much as three-quarters.
Banks that responded to the survey, including Lloyds and Barclays, said the move would increase access to trade by 15 per cent — equivalent to roughly £25bn — by 2024.
Slashing red tape could also provide more than £220bn in efficiency savings and reduce the carbon footprint from trade activities.
“SMEs will be at the heart of any recovery and they desperately need access to short-term working capital, but an extraordinarily outdated system dating back to the 16th century stands in their way,” said the ICC’s UK secretary general Chris Southworth.
“The full digitisation of trade documentation is a game-changer and long overdue in trade. It will enable SMEs to complete trade deals in hours and days rather than weeks and months, slashing the time and cost to process all the documentation in half.”
The survey, which was conducted by Coriolis Technologies, comes ahead of planned legal reforms next week.
It also comes after G7 leaders inked an agreement over global tech regulation, including plans to develop a framework for the use of electronic transferable records, cooperation over data sharing practices and collaboration on how governments can develop digital technical standards for use by online tools and services.
The report argued that small businesses, which account for 90 per cent of UK productivity, were key to kickstarting economic growth after the pandemic.
It highlighted the need to simplify and speed up trade by digitising documents such as bills of lading — receipts that accompany shipped goods and date back to 1564.
“Small and medium businesses are the lifeblood of our economy and we are working hard to support them,” said media and data minister John Wittingdale.
“As well as investing in world-class infrastructure, skills and talent, we have asked the Law Commission to recommend ways to update outdated trading methods and we are taking a leading role to promote the digitisation of international trade through the UK’s presidency of the G7.”