Overcoming Global Trade Mediocrity - Part 1

Vince Lombardi of Notre Dame memorably wrote:?“We are going to relentlessly chase perfection, knowing full well we will not catch it, because nothing is perfect. But we are going to relentlessly chase it because in the process we will catch excellence. I am not remotely interested in just being good.”

Global Trade Excellence and Global Trade Mediocrity

Scaling Globally?

Success in business is achieved by scaling globally. One of the great failures of U.S. capitalism is the failure of our SMEs to achieve global scale.?Whereas the small enterprises and farmers of Chile export to an average of 13 countries, small U.S. enterprises do not export and in the rare cases where they do, export to 2 countries, namely Canada and Mexico.?

The Business Cases

A Little History

Joseph Juran of Romania took note of the Pareto Principle. Pareto in Italy, explains that 80% of Italian land (wealth), was once owned by 20% of Italians. This realization led Juran to write his “Management Breakthrough” which with Deming’s?Statistical Quality Control,?transformed Japanese manufacturing.??Juran had read Margaret Mead’s works on cultural anthropology and realized that management strategy is cultural. Peter Drucker modernized these thoughts by writing that “culture eats strategy for breakfast.”

Achieving Global Success

Edison proved that the achievement of global success is the ultimate guarantor of enterprise sustainability. One of the great examples of achieving global success is filmmaking. The industry’s globalization?was impelled by Thomas Edison (née Edeson) with his modest studio:

in Brunswick, NJ. This industry is now a global phenomenon. The filmmaking industry production is now reflective of the creativity of the world’s many cultures - like?that of Bollywood:?

Jean Luc Godard and Francois Truffaut of the New Wave in film:

Story telling is a timeless craft. It is empirical of what Jean Luc Godard (RIP) noted. "Every story, " he wrote,?"has a beginning, a middle and an end - not necessarily in that order." The influence of Science, Culture, Technology, Engineering, Art and Math (STEAM) is like a diamond - the more facets, the more brilliant the stone:

Regrettably, today’s society is as Asimov and Carl Sagan noted. Sagan wrote and filmed.

As Carl Sagan noted:?

We live in a society exquisitely dependent on science and technology, in which hardly anyone knows anything about science and technology.?Science is more than a body of knowledge; it is a way of thinking. I have a foreboding of an America in my children's or grandchildren's time?– when the United States is a service and information economy; when nearly all the key manufacturing industries have slipped away to other countries; when awesome technological powers are in the hands of a very few, and no one representing the public interest can even grasp the issues; when the people have lost the ability to set their own agendas or knowledgeably question those in authority; when, clutching our crystals and nervously consulting our horoscopes, our critical faculties in decline, unable to distinguish between what feels good and what's true, we slide, almost without noticing, back into superstition and darkness."?

The Existential Rise from Mediocrity?

The Tide and the Evolution of Global Trade

Banks for fear of crime and cybercrime, have thrown the global trade baby out with the bathwater by conflating "trading companies" with enterprises that actually innovate and make things.?

A Rising Tide will with process, reestablish the prominence of small enterprises- like those once located along the rivers of America and the world.?

Correlation*

Correlation* utilizes the "full stack" of scientific and technological advances to add value, efficiency and speed to the global trade finance and global scaling process of small enterprise innovation.?

The Full Stack

Chatbots?

QR Encoding

GPS?

and EDI (Electronic Data Interchange)?

a form of communication, describe and transmit?the status of a manufacturer’s production as well as provides and reports the manifest and real time location of goods shipped- regardless of the mode of transport.?

The QR encoded manifest and its shipment by air, seagoing vessel or truck can now be tracked via GPS, reported by EDI and compared to a preset itinerary by using AI. AI can calculate, anticipate and compare a shipment’s location against expectation, using GPS and taking into consideration weather and other obstacles.?

The GPS system uses the military's network of GPS satellites and an onboard GPS receiver to detect its position with very high accuracy.

Process

QR-encoding, Reed-Solomon and AI

The Reed-Solomon error correction process inherent in the finite math of QR encoding and AI provide the means to verify the contents and location of a shipment and to match it to the Purchase Order.?

Matching and Settlement?

Beyond the Letter of Credit

Securely communicating a QR-encoded shipment manifest with a Non-Fungible Token (NFT):

?using a secure Blockchain ledger:

Embedding the QR codes in an NFT binds them to a public contract. This provides visibility and authentication and a vital link to the underlying agreement.?

On the other side of the waters or border or demarcation, the buyer creates POs or Purchase Orders that are also distinctly QR encoded and transmitted to the Forfaiting/Insuring/Lender.?

AI?

The buyer can then confirm that the shipment and its contents came from a legitimate source and that what was ordered by the buyer is in fact what is being delivered by the seller.

Roles and Responsibilities

The role and responsibilities of the logistics and other parties to a trade transaction are clearly defined by Incoterms 2020, the international commercial terms of the Paris-based International Chamber of Commerce (ICC) - with which some 200 countries voluntarily comply:

Time to Modernize Global Trade?

The roles of all parties to a global trade transaction have changed fundamentally.??It is now technologically possible to verify the location of inventory and finished goods within a meter or meters of where they are physically located.??This inventory and these shipments can be traced, tracked and reported using QR Codes.

Matching and Settlement: History, Discipline and Culture

The settlement through payment or financing of a trade transaction is a highly disciplined process.?

Fintech and the Financial Industry

The role of the financial industry in future will be to facilitate access to global trade - for all enterprises, regardless of size - to trade and scale globally by becoming the local Trade Services Utility or TSU:

The Matching?of the buyer's distinctive QR encoded?P.O. and the?seller's QR encoded manifest, enabled by AI,?provides for automated settlement by payment, deferred payment or financing.?Once a visual match is made, it becomes the basis for the automated financial institution’s payment by Bank Payment Obligation (BPO):?

or settlement of the underlying transaction by financing.?

The evolution of trade finance has led to a solution I call Correlation*. It is the principal product of The Following Sea:

Correlation*

“Fair Winds and Following Seas”

Correlation* is a collaborative process that blends the logistics of global trade with the financial facilitation of forfaiting banks and the “full stack” that simplifies and makes global trade finance accessible to all enterprises- regardless of size. These enterprises are engaged in the sale of manufactured goods.?

The Internet, e-commerce, QR Codes, geolocation, chatbots, SCF,?Dynamic Discounting, NFTs, Blockchain and AI have revolutionized the way that cross-border commerce is transacted, financed and goods are paid for. The difference in financial and logistics cultures has impaired collaboration and lack of interdisciplinary collaboration has destroyed innovation. As a result, there is no creative destruction - just destruction and the diamond has turned to coal.?Correlation* restores life and gives luster, jobs and sustainability to enterprise.?

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