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Rising Trends for Companies Looking at Digital Avenues for Business

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Business in the COVID Pandemic – Companies and Individuals Turning To Digital Avenues

The COVID-19 pandemic has challenged the entire framework of worldwide economic and social structures. People and businesses must work out solutions for surviving in an environment where staying at home has become critical for safety and health. Technology and digital avenues are now a practical way to serve customers, manage operations, and earn profits. Working online has become a viable option for businesses and professionals alike, regardless of their size. Here’s a closer look at the survival strategies adopted during the pandemic.

How the Corporate Culture Is Adapting

Companies in different sectors and worldwide locations have adapted by focusing on the accelerated digitization of their operations by at least three to four years. In all internal and external processes ranging from organizing supply chains of raw materials to production and supplying to customers – wherever possible, larger investments are being made in automation and contactless performance.

The Stress Is More on Digitally-Enabled Products

Adapting their portfolio and offering a more comprehensive range of digital and digitally-enabled products and services to maintain their client base is another survival strategy companies have adopted. Statistics indicate an acceleration of around seven years in how products are researched, developed, and produced. Offering online and doorstep delivery is also a practical option to encourage sales and stay competitive.

Several sectors like financial services, professional services, healthcare, and pharmaceuticals report an exponential hike in demand compared to consumer packaged goods (CPG). Some excellent examples include developing channel manager apps, digital marketing and SEO services, online coursework, and educational products.

Overcoming Resistance To Change Has Become Critical for Survival

Issues with altering the existing organizational structure and integrating technology have impeded efforts to make changes before the pandemic. The reasons cited included the possibility of clients being disinterested in digitization and the higher risk of data breaches and identity theft. However, top executives not prioritizing the transition or being unwilling to allocate the necessary funding have been the primary reasons.

The pandemic has created an environment where companies must adapt or fail. Implementing the necessary changes becomes critical considering that competitors are opening up to newer and more streamlined operational techniques. It comes down to adapting or going out of business. Catering to customer demand with stress on offerings that comply with the new health and hygiene requirements has necessitated the adoption of digital avenues for conducting business.

Companies Are Offering WFH Options

Companies are now open to raising the costs of hiring trained personnel to run operations and purchasing advanced equipment to serve customers. That includes software and hardware complete with cutting-edge solutions to prevent data breaches and provide secure platforms for conducting transactions and sales. Cutting back on in-office teams and providing work-from-home options seems to be the new normal.

Organizations and the people working in them have recognized the positives of remote working options before the pandemic. From the business perspective, operational costs and overheads are lower while productivity levels are higher. Since the COVID-19 lockdowns, employees are being encouraged to work from home. Some are also provided with the necessary equipment, such as laptops and secure Wi-Fi connections to safeguard intellectual property and company data. Video conferencing and document sharing apps allow teams to coordinate efforts and keep up with their deliverables.

Hiring Remote Teams Is an Economical Work Process

Hiring the services of online freelance contractors to keep the company operational is also the way to go. Several aspects can function with the assistance of a remote notary, accountant, SEO, digital advertising and marketing specialist, bookkeeping, attorney, data analyst, and various others. In the past, executives would take up to 12 months or more to develop and implement remote working solutions, but this timeline has been cut down to as low as a couple of weeks during the pandemic.

Digitization Has Opened New Employment Opportunities.

The demand for digital services and professionals providing those services has led to more people turning to the industry to find jobs. The COVID pandemic has resulted in the loss of an estimated 114 million jobs, with close to $3.7 trillion lost in labor income. Although people are returning to work in 2021, the International Labour Organization predicts that global working hours are unlikely to return to their pre-pandemic numbers.

The workforce must look for other avenues to earn a livelihood, considering that close to 97,966 companies have closed down permanently in the US alone. Digital marketing has emerged as an industry that has the potential to absorb a large section of the newly available talent. As long as they have a computer and a fast and reliable internet connection, any person can train and start working in this sector. Not only are there lots of accredited courses available for professionals wishing to work in the digital sphere, but there are also several websites and social media platforms offering access to jobs and employment.

The New Normal and Digitization Is Here to Stay

The COVID-19 pandemic is permanently altering how companies, consumers, and employees live and work. Experts predict that even after the crises have passed, the reliance on digital avenues for conducting business and working will continue. The protocols and behavior adopted during the pandemic are likely to last, and organizations must evolve to function according to customer demand. Employing digital channels has become indispensable in providing a holistic customer experience and remaining competitive in their respective industries. Organizations may also have to overhaul their long-term visions for business strategies and objectives to accommodate digital integration.

Over time, as digital solutions advance and innovations emerge, companies may have to employ them to deliver more customer-centric products and services. Adopting suitable approaches while experimenting with new technology is critical for survival. From the individual professional’s perspective, digital avenues could prove to be a viable source of primary income or even a side hustle to make some extra money to supplement their earnings.

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Archives, Global Logistics, Global Trade Daily, Trucking

How Will Adoption of Internet of Things (IoT) Facilitate Logistics Sector?

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The expansion of the e-commerce sector, which will account for a 17% share in global retail sales by 2021, has increased the incorporation of the internet of things (IoT) technology for enhancing the logistics ecosystem. The booming e-commerce industry, on account of the changing consumer behavior, requires fast and free shipping with competitive product pricing. To keep up with this changing customer behavior, various companies have started adopting IoT solutions in their logistics activities to manage a sudden order rise, time-sensitive needs of customers, and inconsistent shipping.

The adoption of IoT solutions improves the efficiency of logistics operations, as they help in tracking the inventory and warehousing, monitoring the driver activity, allowing for smart location management, and updating the delivery status. The benefits offered by IoT technology are imperative for the success of any logistics company. This realization will, therefore, increase the IoT in logistics market size from $34,504.8 million in 2019 to $100,984.5 million by 2030. According to P&S Intelligence, the market will advance at a CAGR of 13.2% during 2020–2030.

Additionally, the rapid digitization in the logistics sector is propelling the demand for IoT solutions. Logistics and trucking companies across the globe are using data analytics, telematics, self-driving, and robotic technologies to attain operational efficiency and combat issues such as the shortage of truckers. Besides, the integration of robotics in supply chain management, data analytics, warehousing, and machine learning has helped in solving the issue of labor shortage and enhancing technical efficiency.

Furthermore, the developments in the 5G network technology will fuel the demand for IoT solutions from the logistics industry. The 5G technology will improve the experience of drivers by providing better insurance coverage for vehicles and real-time traffic updates. Moreover, this cellular network technology allows logistics companies to cut down the latency, thus ensuring higher efficiency in operations. Apart from this, the logistics industry also uses local area network (LAN) technology-based IoT solutions to improve its operations.

In the past, the North American logistics sector displayed the highest adoption of IoT solutions, on account of the rapid digital transformation in the region. Moreover, the emergence of new IT startups due to the surging internet penetration and expanding scope of e-commerce has facilitated the adoption of IoT technology in the logistics industry. Besides, a surge in advertising and marketing activities pertaining to robotics, near-field communication (NFC), low-power wide-area network (LPWAN), artificial intelligence (AI), and radio-frequency identification (RFID) technologies and an increase in the efforts to educate and train professionals in these technologies widen the scope for companies offering IoT solutions for regional logistics companies.

This will be because of the fact that blockchain for supply chain management has the ability to replace conventional processes as it uses ledger technology that makes logistics operations sustainable and ethical. Geographically, the market will demonstrate the fastest growth in Asia-Pacific in the coming years, as per the estimates of the market research company, P&S Intelligence. Rapid technological advancements in the logistics industry are the major factor fueling the expansion of the IoT in the logistics market in this region.

Source: P&S Intelligence

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Rahul has around 2+ years of experience in market research and consulting services for the automotive domain. He holds varied experience in market sizing and forecasting with varied models, competition landscape, consumer behavior analysis, opportunity analysis, product/company benchmarking, data mining, and BOM costing. He has successfully delivered multiple projects in market entry and share analysis and others.

Some of the projects delivered by him include Artificial Intelligence in Transportation Market, Global Electric vehicle and Charging Infrastructure Market, and Mobility-as-a-Service Market.

5G
Archives, Global Logistics, Global Trade Daily

5G Solutions Facilitate Faster, More Efficient Supply Chains

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For supply chains to keep up with increasing demand and the need for cost and resource savings, organizations are turning to 5G and private network solutions. 5G wireless technology will improve all aspects of the supply chain from manufacturing to inventory, fulfillment and delivery.

Manufacturing: Machine-to-machine communications are a staple in the manufacturing industry. Private 5G wireless technology will improve these machines’ flexibility and agility through its ability to carry more information at faster speeds. Devices will be able to stay completely in sync without any delay or lag. With the machine’s ability to increase precision, it will, in turn, increase productivity, reliability and safety.

Inventory: Traditional inventory management has always been time-consuming and labor-intensive, while fulfillment was at a halt. With real-time inventory trackers, fulfillment centers are better equipped to manage large quantities more accurately. By using software that can accurately count and relay information back to a centralized system, warehouses are able to get real-time data into exact inventory counts, product locations and run reporting tools.

Fulfillment: The entire world experienced a major shift in fulfillment technology when the COVID-19 pandemic hit and stay-at-home orders became routine. The increase in demand and limited capacity of fulfillment centers caused many suppliers to adopt warehouse robotics as a solution for the future. Warehouse robotics are actually not new to the industry but first started being developed and used in the early 1960’s in GM factories.

Delivery: Although we may be a few years away from seeing delivery automation used on a large scale, companies have been working to reduce delivery costs and improve logistics through remotely powered drone delivery, robotics, and autonomous vehicles. For a delivery driver or pilot to control and drive a drone from the fulfillment center, the community’s connection needs to be robust, fast and reliable.

Additional Benefits Private and Public 5G Networks will Bring to the Supply Chain

Reducing Power Resources: 5G speeds use less power than traditional 4G and LTE connections. A good analogy to describe how 5G uses less energy is when a person is on their phone loading a website, it may take up to a minute for the website to load. During that loading time their phone is working much harder and using more battery power. If that loading time were to be cut down to a second, it would reduce the additional strain on the phone’s battery, increasing the battery’s life before its next charge. Now take that analogy and apply it to multiple large-scale devices making these same types of connections all day. That speed translates to significant power-saving efforts.

Reliability: When looking at private enterprise networks versus Wi-Fi and what system is right for an organization’s unique manufacturing needs, it’s important to know the difference. Private wireless networks are proven to be more reliable through better signal penetration, fewer blind spots and ability to handle increased bandwidth. 5G networks also can handle more devices than traditional Wi-Fi or 4G networks, ensuring that communications never get jammed up or slow down. When it can be costly to second guess how much a network can handle or how quickly it can transmit data, there is no better solution than private enterprise networks.

Safety: By removing humans from specific functions on the factory floor, warehouses have significantly reduced the number of accidents. In addition to these machines performing some of the more difficult or dangerous tasks, operations are accompanied by sensors that can detect problems or interruptions and immediately shut down and alert the team on the floor when something malfunctions. This split-second reaction time is enough to stop accidents and potentially save lives. Manufacturing has historically been a dangerous job, and these solutions can significantly improve safety and working conditions.

What is Needed to Make These Networks Possible

In order for these IoT’s to flourish at their total capacity, a strong and secure private 5G network is essential. It is critical to work with communications experts who are experienced in developing private network solutions at scale. As technology continues to grow, so will the increase in data, devices and bandwidth needed to ensure seamless communication between devices. It is imperative that the networks being developed are done in a way that can be expanded upon in the future without interruption to the networks in place.

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About Dan Leaf, CEO and president at Leaf Communications: 

Dan Leaf is an Air Force veteran with over 22 years of experience in the communications industry. Over his career, Leaf has become an expert in wireless infrastructure, successfully building and managing companies that provide unparalleled service to their clients. Leaf has worked with Fortune 500 companies, fire marshals and all major carriers to provide small cell deployment, 5G integration, first-responder systems (ERRCS), site acquisition real-estate services, architecture and engineering, and complete project management and construction services. The broad range of functions that Leaf and his team provide are what give them a holistic approach and expert experience in wireless infrastructure and communication technology.

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Archives, Global Trade Daily, Software, Special Reports

The Pandemic’s Impact on the Shift to Reduce Operational Costs and Improve IT Ops Productivity

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The COVID-19 pandemic caused an upheaval in IT operations worldwide and forced businesses to reevaluate ways to cut down expenses, the most significant being operational costs. Leaders were challenged with having to operate with skeletal staff and remote teams, while also needing to keep enterprises running 24×7 with virtually no downtime. Let’s look at how the pandemic impacted IT operations and what needs to be done to ensure that enterprises can continue to operate cost-effectively.

Leaner Team Structures to Scale Down Non-Discretionary Costs

The first step organizations took in 2020 was to downsize the contractual resources and variable talent pool deployed in network operations centers to cut back on non-discretionary costs. Leaner teams were expected to perform a similar quantum of work, which in turn emphasized the need to move to greater automation in IT operations management (ITOM).

Going forward, the challenge will be to attract the right talent, do more with less, and introduce automation in business processes to make do with smaller teams. To help reduce the operations workforce, there is growing interest in intelligent tools for notification and escalation, artificial intelligence and machine learning (AI/ML) solutions that minimize alert fatigue and automation of ticketing workflows via IT service management (ITSM) integrations. Further, some amount of in-house work can be shifted to consultants and contractors on an as-needed basis, so the resource is no longer on the payroll after the project completes.

Remote Management and the Rise of DaaS
With COVID-19 forcing businesses to give up leased and rented office spaces to reduce capital expenditure, skeletal staff were deployed onsite with others moving to a work-from-home mode of operation abruptly. This heightened the need for greater security, availability of the right talent with the required software and hardware resources and the need for collaboration among geographically dispersed teams.

Desktop-as-a-service (DaaS) was one of the largest areas of the cloud to experience an increase in demand because of this shift. DaaS is an inexpensive option for organizations looking to support their workers by providing secure access to enterprise applications remotely. Tool integrations for notifications like Slack as well as remote collaboration tools and meeting solutions like Teams, Trello and Zoom also rose to prominence.

The Rise of DevOps and Agile Practices for Deployment Automation

Organizations needed mechanisms for remote and automated deployments due to staff shortages and the absence of a centrally located workforce. This necessitated agile practices for breaking down organizational silos between software developers and IT operations personnel. In 2021, we expect to see increased adoption and continued use of DevOps and agile practices as well as automation in the application deployment and maintenance process.

Data center automation replaces labor costs with software and configuration costs. Dedicated automation architects can ensure that DevOps and agile practices are implemented across the enterprise, thereby reducing the need for manual configuration, monitoring and maintenance tasks.

Revamping Application Infrastructure and Moving to IaaS for Intelligent Scaling

Organizations chose to review their expenditure on dedicated hardware and software solutions to see if a switch to cloud and open source was possible. Virtualization i.e., moving to cloud (microservice and container-based architectures) emerged as a solution to the conundrum, since it reduces the number of physical servers required in the enterprise and the cost of maintaining applications can be significantly brought down.

Cost savings in cloud services have a real, immediate and perceptible cash impact, as moving to the cloud reduces capital expenditures for servers and related network equipment, transforming one-time capital costs to monthly operating expenses. The deployment of virtual management systems enables faster adoption of cloud platforms. Co-sourcing environment management functions provides the added advantage of having the right talent managing the environment with technical know-how and service guarantees in place.

Cloud providers can also provision additional resources like disk space, CPU, memory and communication lines faster and cheaper than on-premise servers and infrastructure. Intelligent workload trend-based capacity forecasting can help deliver resources accurately and avoid unnecessary expenditure.

Software licenses for new and existing tools can be re-examined to ensure that the cost of onboarding and integration with the existing toolset does not include hidden expenses or jeopardize existing investments in the ITOM infrastructure in any way. Eliminating unnecessary tools will also reduce the annual maintenance bills and staff time required to keep systems up and running.

Preventive Healing and Automation for Maximum Uptime

As businesses moved to more digital transactions and saw a marked increase in online traffic due to storefronts being shut, the primary challenge was to provide close to 24x7x365 uptime with reduced IT operations personnel, something made possible by automation. Enterprises adopted artificial intelligence for IT operations (AIOps) solutions providing proactive incident detection and autonomous resolution capabilities coupled with ITSM integrations, so the entire ticketing process was completely automated without the need for human intervention.

Traditional AIOps solutions suffer from certain shortcomings, including the inability to predict issues before they occur and initiate preemptive measures to avert outages. However, preventive healing solutions use patented techniques providing predictive detection of issues and allowing for remedial steps to be put in place so the issue can be averted. Some modes of preventive healing include dynamically optimizing or shaping the workload so the underlying system behavior remains unaffected, provisioning additional resources in cloud environments so the system can handle workload surges or projecting resource requirements based on a what-if analysis of future workload trends so businesses can perform app-aware scaling. Automation of ticketing workflows can be achieved by integrating notification and ITSM platforms.

Despite predictive alerting, some issues may still occur due to sudden network or storage outages, hardware glitches or third-party dependencies being unavailable. In such cases, accelerated root cause analysis with event correlations and suggestions on where the error originated can significantly reduce mean time to repair (MTTR). In the hands of a skilled IT operations analyst, time-synchronized contextual data comprising logs, diagnostic data, business error codes and code-level traces prove invaluable in establishing the chain of causation and closing the incident with minimal time and effort spent, thus leading to a more cost- and resource-efficient data center.

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ABOUT THE AUTHOR: Girish Muckai is the chief sales and marketing officer at Heal Software Inc., the innovator of the game-changing preventive healing software for enterprises known as HEAL, which fixes problems before they happen. To learn more, visit http://www.healsoftware.ai/.

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Archives, Commentary, Global Trade Daily, News

Will Remote Work Lead to Vast Migration in the United States?

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Whether we want to admit it or not, times are changing. The United States is going through a definite transformation on many levels. Political, economic, sociological, and cultural. These changes are in no small part due to COVID-19, and all its effects on the general economy and business practices. And one of the more notable changes is that more and more people are working remotely. So, will remote work lead to vast migration in the US, or will things go back to standard work practices once we have COVID-19 under control? Well, let’s find out.

The impact of COVID-19 on general job practices

To understand why remote work is changing the US, we first need to explore how COVID-19 has impacted it. After all, it is no coincidence that there is an astounding spike in the number of remote workers ever since COVID-19 forced us into lockdown. So, is remote work a temporary struggle that people wish to get out of as soon as possible? Or did COVID-19 open our eyes to new job opportunities?

The benefits of working from home

First and foremost, there is hardly a remote worker that won’t emphasize the benefits of working from home. To begin with, you don’t have to struggle with daily traffic. Next, you can wear pretty much whatever you want. Also, there is no need to socialize with coworkers that you don’t like. You have more freedom to organize your time. Finally, you can enjoy home-meals instead of eating fast food or at-work cafeteria.

Are there downsides to remote work? Sure. But, the benefits outweigh them so much that people wonder, “Why haven’t we done this sooner?”. Well, one of the reasons for this is that employers were worried about productivity. And this is precisely what they had to overcome during the COVID-19 pandemic. They had to learn how to manage their staff remotely, ensuring that everyone is doing their job.

Improved monitoring software

Another surprising spike came in the form of monitoring software. Once employers figured out that they need to have most, if not their entire workforce at home, they concluded that having monitoring software was a must. Apart from constant monitoring, you have daily reports, weekly meetings, and improved communication systems to ensure that workers are doing what they are supposed to when they are supposed to. Add to that increased data security and improved worker motivation and, hey presto. Remote work becomes not only functional but quite effective. So much so that most companies either saw no change or an increase in work performance. So, does this mean that remote work will lead to vast migration?

Reasons why remote work might lead to vast migration

As of now, the answer is definitely leaning towards yes. This, of course, depends on what you mean by “vast.” But, if 14 million US are vast enough for you, then yes. Whether this is a permanent migration or whether people will migrate back after coronavirus blows over is hard to tell. But, if we have to give an answer, we would put our money or permanent change. Here is why.

The coming of 5G

One of the main limitations of permanent remote work was that the internet was not good enough. Sure, you can have a stable connection if you live in a big city. But, the smaller towns in the US have been notorious for having slow, unstable internet. Well, if 5G delivers what they promise, we should experience faster, more stable internet, even in smaller cities. Mobile devices should have constant coverage, which will make reaching remote workers that much easier. On the other hand, remote workers won’t have to worry about installing expensive internet packages to have a stable connection, as it will be quite widespread.

Increase in freelance work

Of course, not all jobs can be done remotely. Some simply require you to be there in person to get anything done. But, over the past couple of years, there has been a definite increase in online freelance work. Platforms like Upwork, Fiverr, and Toptal all provide a safe and easy way for freelancers to find a job. So, not only are people getting better at working from home, but companies are finding more and more ways to find workers. This increase in freelance work gives both companies and workers the freedom to choose and learn like they never did before.

Where do people migrate to?

Until recently, the main migration for people was from smaller cities to larger ones to find better-paid jobs. Now, we should see people going back to their hometowns. After all, why pay high rent and utility bills when you can go back home and easily save hundreds of dollars monthly. This train of thought lead many Americans to head back home and enjoy a quieter lifestyle. As it turns out, remote work is also excellent for people that want to practice farming on the side or live in secluded areas, as they don’t have to worry about finding work in the local area.

Final thoughts

In our view, the fact that remote work leads to vast migration is a good thing. Remote work gives people the freedom to live where they want to live. And as far as we are concerned, the more freedom people have, the better. Mind you, we wouldn’t be surprised if remote work changes in the upcoming years, as the whole concept of if being this massive is quite new. But, we are hopeful that those changes will be for the better.

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Anthony Clark has worked as a business manager and consultant for over 15 years. After moving back to his home town, his primary focus has been on writing helpful articles about moving for websites like highqualitymovingcompany.com and raising his daughters.

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Archives, Global Trade Daily, News

The Expansion of Data Center Facilities and Telecom Drives the Global Wire And Cable Market While the Pandemic Hampers Construction and Industry

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IndexBox has just published a new report: ‘World – Insulated Wire And Cable – Market Analysis, Forecast, Size, Trends and Insights’. Here is a summary of the report’s key findings.

In 2019, the global wire and cable market increased by 0.5% to $239.6B, rising for the third consecutive year after two years of decline. The market value increased at an average annual rate of +1.0% from 2012 to 2019; the trend pattern remained relatively stable, with only minor fluctuations being recorded in certain years.

Insulated wire and cable consumption tend to follow distributional and industrial electrical utility construction, the creation of new communities, and a replacement cycle. Therefore, the rising demand for insulated wire and cable will also be shaped by both the residential construction sector and industrial production alike, which are conditioned by rising population and urbanization, particularly in Asia. Thus, the largest wire and cable markets worldwide were China ($53.2B), the U.S. ($27.4B) and Indonesia ($13.8B), together accounting for 39% of the global market (IndexBox estimates). These countries were followed by Japan, Mexico, India, Germany, Russia, France, South Korea, the UK, Turkey and Italy, which together accounted for a further 27%.

Capital investment and the expansion of transport and telecom infrastructure also constitute major factors behind the market growth; overall, those factors reflect the global GDP growth.

The telecommunications market uses a wide range of wire and cable products. With the active development of the electronic devices market, continuous improvement of the existing telecommunication infrastructure is required, including within the framework of modernization, which will contribute to the growth of the insulated wire and cable market.

The development of the 5G and other wireless networks, on the one hand, requires less data cable systems, but on the other hand, it needs more power supply cable systems for base stations. Moreover, the growth of demand for data centers amid the penetration of big data and machine learning to major business sectors shapes the demand for both data and power cable systems. Thus, insulated cables for a voltage under 80 V feature as the most imported category of cables in the world, with imports amounting to 4M tonnes in 2019, which equated to $26B.

Overall, imports of insulated wire and cable amounted to 9.6M tonnes in 2019. In value terms, wire and cable imports shrank to $112.5B (IndexBox estimates) in 2019. In value terms, the U.S. ($20.8B), Germany ($10.5B) and Japan ($7.5B) appeared to be the countries with the highest levels of imports in 2019, together accounting for 34% of global imports. These countries were followed by China, Mexico, France, the UK, Hong Kong SAR, Spain, Canada, South Korea, the Czech Republic and the Netherlands, which together accounted for a further 30%.

Until 2020, the global economy has been developing steadily for five years, although at a slower pace than in the previous decade. The slowdown in global economic growth was caused by increased political uncertainty in the world and trade wars between the United States and China. According to the World Bank outlook from January 2020, the global economy was expected to pick up the growth momentum and increase from +2.5% to +2.7% per year in the medium term.

In early 2020, however, the global economy entered a period of the crisis caused by the outbreak of the COVID-19 pandemic. In order to battle the spread of the virus, most countries in the world implemented quarantine measures that put on halt production and transport activity.

The combination of those factors disrupts economic growth heavily throughout the world. According to World Bank forecasts, despite the gradual relaxing of restrictive measures and unprecedented government support in countries that faced the pandemic in early 2020, the annual decline of global GDP could amount to -5.2%, which is the deepest global recession being seen over the past eight decades.

Both the construction and industrial sectors have proven vulnerable to the pandemic. Thus, the above economic prerequisites will have the most negative impact on the expansion of new residential and non-residential construction projects, thereby hampering the demand for electricity and electrical networks.

Due to quarantine measures, construction projects were paused, and the drop in incomes of the population makes mortgage loans less affordable. In addition, the reduced capital investment may lead to the postponement of plans for the building of new infrastructural and industrial facilities.

Moreover, the disruption of established international supply chains between insulated wire and cable producers and consumers due to asynchronous quarantine measures and restricted transport activity also hampers the market growth.

Taking into account the above, it is expected that in 2020, global consumption of insulated wire and cable should decline slightly against 2019. In the medium term, as the global economy recovers from the effects of the pandemic, the market is expected to grow gradually. Overall, market performance is forecast to pursue a slightly upward trend over the next decade, expanding with an anticipated CAGR of +0.3% for the period from 2019 to 2030, which is projected to bring the market volume to 24M tonnes by the end of 2030.

Source: IndexBox AI Platform

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Archives, Global Trade Daily, Software

The American Printed Circuit Assembly Market Affected by Trade Wars but Resilient to the Pandemic

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IndexBox has just published a new report: ‘U.S. Printed Circuit Assembly (Electronic Assembly) Market. Analysis And Forecast to 2025’. Here is a summary of the report’s key findings.

After two years of growth, the U.S. printed circuit assembly market decreased by -16.4% to $35.1B in 2019. The market value increased at an average annual rate of +2.9% over the period from 2013 to 2019; however, the trend pattern indicated some noticeable fluctuations being recorded throughout the analyzed period. Over the period under review, the market hit record highs at $41.9B in 2018, and then contracted markedly in the following year. This rapid decrease was caused b a plunge in printed circuit imports from China.

In terms of supplying countries, South Korea ($4.1B), Taiwan ($4.1B) and China ($3.4B) were the main suppliers of printed circuit assembly to the U.S., together accounting for 67% of total imports (IndexBox estimates). Imports from Taiwan recorded tangible growth in 2019, while supplies from China dropped dramatically in the last year. This went along a new round of trade confrontation between the U.S. and China when the U.S. tries to limit the influence of Chinese technology companies on the American market.

Printed circuit assembly production, meanwhile, amounted to $18.3B in 2019. The total output value increased at an average annual rate of +1.4% from 2013 to 2019. Despite the pandemic, preliminary data show that in the first half, cumulative revenues of electronic component manufacturers did not decline from the previous year. This could indicate that the printed circuit assemblies and microelectronics market, in general, will be more resilient to a pandemic than many other markets.

Printed circuit assemblies constitute integrated electronic systems containing various semiconductors and other elements mounted on printed circuit boards. Such systems are widely used in the production of electronic, computer, digital, video, audio and other types of apparatus, in the aerospace, industrial automation, telecommunications and many other areas.

Therefore, the key factor determining the development of the printed circuit assembly market is the dynamics of industrial manufacturing, which, in turn, depends on economic growth, employment and income of the population, and investments, which altogether reflect the overall GDP growth. In addition, the growth of the market is also shaped by the growing digitalization of the economy, the development of smart technology and the Internet of Things, as well as the rapid development of mobile communication networks and the expansion of their coverage.

According to the World Bank outlook from January 2020, the U.S. economy was expected to slow down to +1.7% per year in the medium term, hampered by increasing global uncertainty, the U.S.-China trade war, and slower global growth.

In early 2020, however, the global economy entered a period of the crisis caused by the COVID-19 epidemic, due to which most countries in the world put on halt production and transport activity. The result will be a drop in GDP relative to previous years and an unprecedented decline in oil prices.

The U.S. is struggling with a drastic short-term recession, with the expected contraction of GDP of approx. -6.1% in 2020, as the hit of the pandemic was harder than expected, and unemployment soared due to the shutdown and social isolation. The combination of tight financial conditions and uncertainty regarding the length of the pandemic and the possible bottom of the related economic drop, as well as high volatility of financial markets, disrupt capital investments in the immediate term, which may put a drag on the expansion of the printed circuit assembly market.

An additional serious risk for the medium-term recovery is the growth of geopolitical tensions in the world, especially between the United States and China, which are being drawn into a political confrontation on a wide range of issues. If sanctions and restrictions are tightened, it will hit global trade and worsen economic growth both in the United States and China and in many other countries involved in supply chains.

In addition to the development of electronics and the Internet of Things, the pandemic has triggered a surge in demand for mobile audio and video services, which will continue in the medium term. In addition, in the coming years, the active proliferation of 5G networks is expected to continue, which will give a new powerful impetus to the use of the Internet and the further development of smart devices. All of this will drive demand for printed circuit assemblies as they are key components of electronic engineering.

Taking into account the above, it is expected that in the medium term, as the economy recovers from the effects of the pandemic, the market is expected to grow gradually. Overall, market performance is forecast to expand with an anticipated CAGR of +0.9% for the period from 2019 to 2030, which is projected to bring the market volume to 374M units (or $38B) by the end of 2030.

Companies Mentioned in the Report

Sanmina Corporation, Jabil Circuit, Xilinx, Flextronics International USA, Electronic Assembly Corporation, Mercury Systems, Ttm Technologies, Benchmark Electronics, Jabil Circuit, IEC Electronics Corp., Sypris Solutions, Flextronics America, Plexus Corp., M C Test Service, Express Manufacturing, American Technical Ceramics Corp, Sigmatron International, Magna Electronics, Park Electrochemical Corp., Creation Technologies Wisconsin, Diamond Multimedia Systems, Viasystems Technologies Corp, Mid-South Industries, Hadco Corporation, Kimball Electronics, Smtc Manufacturing Corporation of California, Flextronics Holding USA, Logic Pd, Viasystems

Source: IndexBox AI Platform

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D.C. District Court Judge Blocks Commerce’s TikTok Ban

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A federal judge from the U.S. District Court for the District of Columbia granted TikTok’s motion for preliminary injunction, resulting in a nationwide temporary suspension of an order from the U.S. Department of Commerce (“Commerce”) for Apple and Google to remove TikTok from its U.S. app stores.

Last week, Chinese social media app WeChat was separately granted a similar injunction by a federal judge from the U.S. District Court for the Northern District of California. The two China-based smartphone apps are facing impending bans pursuant to Executive Orders (“E.O.”) 13942 (for TikTok) and 13943 (for WeChat), issued by the President on August 6, 2020.

Following the court’s ruling, Commerce issued a statement that it intends to comply with the injunction, but that it also “intends to vigorously defend the E.O. and the Secretary’s implementation efforts from legal challenges.” The preliminary injunction effectively grants TikTok’s parent company, ByteDance Ltd. (“ByteDance”), more time to finalize and obtain approval of its agreement with Oracle and Walmart. The pending deal over TikTok will still need to be reviewed and approved by both the Committee on Foreign Investment in the U.S. (“CFIUS”) and the Chinese authorities.

The court denied TikTok’s request for an additional preliminary injunction against the implementation of the second set of restrictions, which take effect on November 12, 2020. These restrictions would prevent the provision of internet hosting, content delivery networks, or other internet transit services to TikTok.

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Beau Jackson is a Kansas City-based partner with the law firm Husch Blackwell LLP. He leads the firm’s Section 337 practice.

Camron Greer is an Assistant Trade Analyst in Husch Blackwell LLP’s Washington D.C. office.

 

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U.S. Adds 38 New Huawei Affiliates to Entity List While Again Expanding Foreign-Produced Direct Product Rule

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The U.S. Department of Commerce’s Bureau of Industry and Security (“BIS”) has announced that it is further restricting access by Huawei Technologies Co. Ltd. and its designated non-U.S. affiliates (“Huawei”) to U.S.-produced technology and software. BIS first added Huawei to its Entity List on May 15, 2019 and has continued to impose additional export restrictions on Huawei under the U.S. Export Administration Regulations (“EAR”). Most recently, BIS published a Federal Register notice to implement the following enhancements. Although BIS published this Federal Register notice on August 20, 2020, the following rule changes took effect retroactively as of August 17, 2020:

Addition of Thirty-Eight New Huawei Affiliates to the Entity List. In its announcement, BIS added thirty-eight (38) additional Huawei affiliates to the Entity List. This action now brings the total number of Entity List-designated Huawei affiliates to one hundred and fifty-two (152). The EAR generally prohibits anyone, anywhere in the world from supplying products, software or technology that is “subject to the EAR” to these Huawei affiliates without a BIS license.

Expiration of Huawei Temporary General License. BIS had previously issued (and then, on multiple occasions, extended) a Temporary General License which permitted certain transactions with Huawei Entity List affiliates in order to support existing networks, equipment and handsets that were in existence prior to Huawei’s initial Entity List designation on May 16, 2019. In its Federal Register notice, BIS announced that it would be allowing the Temporary General License to expire. As a result, pursuant to the expiration date set in its most recent renewal notice, the Huawei Temporary General License expired effective August 13, 2020.

Anyone who previously utilized the Temporary General License was required to obtain certain compliance certifications in connection with transactions conducted pursuant to the Temporary General License and the EAR will require those persons to retain those certifications in accordance with the EAR’s recordkeeping requirements.

Permanent Authorization for Cybersecurity Research and Vulnerability Disclosures to Huawei Entity List Companies. The Temporary General License also contained a provision which authorized the disclosure of certain information to Huawei Entity List companies in order to assist with maintaining the integrity and reliability of existing data networks. After allowing the remainder of the Temporary General License to expire, BIS permanently codified this narrow exception into the EAR in order to promote cybersecurity.

Expansion of the Huawei Foreign-Produced Direct Product Rule. In May 2020, BIS amended the EAR’s foreign-produced direct product (FPDP) rules to designate the following items as “subject to the EAR”: (i) foreign-produced items produced or developed by a Huawei Entity List affiliate through the use of technology or software controlled under certain Export Control Classification Numbers (ECCNs), and (ii) foreign-produced items that are produced using equipment which is the direct product of U.S. origin software or technology controlled under certain ECCNs and also produced according to software or technology specifications produced or developed by a Huawei Entity List affiliate. BIS has now significantly expanded this rule.

As amended, the new Huawei FPDP rule now completely disregards whether foreign-produced items produced by a 3rd party are produced according to Huawei specifications and instead extends the Huawei FPDP rule’s coverage to all foreign-produced items resulting from the specified software, technology or production equipment which are intended for incorporation into or for use in the “production” or “development” of any “part”, “component”, or “equipment” to be produced, purchased or ordered by a Huawei Entity List company or otherwise included in any transaction featuring a Huawei Entity List company as a “purchaser”, “intermediate consignee”, “ultimate consignee” or “end-user” (terms in quotation marks in the previous sentence are defined terms under the EAR).

As a result of these amendments, a much broader range of foreign-produced items are now “subject to the EAR” and therefore prohibited for export, reexport or in-country transfer to any Huawei Entity List company without an appropriate BIS license.  Although BIS will normally review such license applications on a “presumption of denial” standard, these amendments did create an exception which states that BIS will evaluate license applications involving Huawei Entity List companies on a “case-by-case” basis when they involve foreign-produced telecommunications systems, equipment and devices below the 5G level.

The amendment did feature a savings clause, which allowed the continuance of certain qualifying transactions which were initiated prior to August 17, 2020.

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Grant Leach is an Omaha-based partner with the law firm Husch Blackwell LLP focusing on international trade, export controls, trade sanctions and anti-corruption compliance.

Cortney O’Toole Morgan is a Washington D.C.-based partner with the law firm Husch Blackwell LLP. She leads the firm’s International Trade & Supply Chain group.

Camron Greer is an Assistant Trade Analyst in Husch Blackwell LLP’s Washington D.C. office.

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UK to Ban Huawei Equipment from its 5G Network While U.S. Announces Visa Restrictions

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On July 14, 2020, the United Kingdom announced that it will ban Huawei Technologies, Co. Ltd. (“Huawei”) equipment from its 5G network. Effective December 31, 2020, Telecoms operators in the UK can no longer purchase Huawei equipment and have until 2027 to remove Huawei technology from their networks, with broadband companies receiving an additional two years to do so. The older 2G, 3G, and 4G networks will not need to have existing Huawei equipment removed.

The UK’s decision arrives after UK intelligence determined that they could no longer be confident in the security of the new equipment provided by Huawei. This announcement marks a change in policy from six months ago, when UK Prime Minister Boris Johnson had previously agreed that Huawei could take up to a 35 percent share of the 5G market.

In response, U.S. Secretary of State Mike Pompeo tweeted that this decision by the UK’s decision “advances Transatlantic security in the [5G] era while protecting citizens’ privacy, national security, and free-world values.”  Secretary Pompeo also announced that the U.S. Department of State will impose visa restrictions on Huawei employees, which, according to Secretary Pompeo, are meant to punish complicity in human rights abuses. Specifically, the new U.S. visa restrictions on Huawei employees allege that Huawei is an extension of the Chinese Communist Party’s “surveillance state” in the Xinjiang Uighur Autonomous Region.

Additionally, Huawei and 114 of its affiliate companies remain subject to extensive export restrictions due to their designation on the U.S. Commerce Department – Bureau of Industry and Security’s “Entity List” while the Commerce Department continues to finalize forthcoming “foreign adversary” rules which will likely restrict the use of Huawei equipment and services in various U.S. information and communications technology or services (“ICTS”) transactions (Husch Blackwell’s coverage of Huawei developments is consolidated at this link and we have covered the proposed “foreign adversary” ICTS rules here and  here).

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Grant Leach is an Omaha-based partner with the law firm Husch Blackwell LLP focusing on international trade, export controls, trade sanctions and anti-corruption compliance.

Camron Greer is an Assistant Trade Analyst in Husch Blackwell LLP’s Washington D.C. office.