Access: What is the relationship between increased global connectivity and innovation?
RAJ SUBRAMANIAM: We wouldn’t have global connectivity without first having innovation. As we have progressed from connecting by mail, phone and fax to a 24/7 internet, innovation has quickly ignited global e-commerce. Innovation enhances global digital connections, allowing billions of possibilities. Advances in technology are reshaping both the digital and physical aspects of trade. Every person is connected in the global marketplace, so when what is seen on a computer screen is also what you want in your hands, that drives transportation companies like FedEx to be experts in global solutions and logistics for our customers. The online economy itself reflects a unique synergy of innovation and connectivity.
Access: Global e-commerce activity grew 21 percent in 2012. Have we reached a new e-commerce tipping point where it’s now a fundamental economic driver? How does FedEx view the e-commerce boom?
RS: The largest driving force in the global economy is e-commerce, and within the next two years global e-commerce sales are expected to reach $1 trillion. With online sales growing more than three times faster than traditional brick-and-mortar sales, online shopping has revolutionized both retail shopping and the global network delivery industry. With a global marketplace now diffuse and mobile, e-commerce will continue to be the force that will drive economic growth in the future.
Access: If an economy like South Korea was the surprise star of the past 10 years, what country do you think might surprise people in the next 10 years?
RS: In 10 years, the markets with the greatest growth will be those with the fewest barriers to trade. For example, take Mexico, which is moving into a more globalized economy as trade now accounts for nearly 65 percent of its GDP — that’s higher than for China, Brazil or the U.S. They also have approved more than 40 free trade agreements with other countries. Another trend for larger supply chain customers is near-sourcing, which increases oversight of manufacturing and minimizes transportation costs. Whoever is the next rising star, in whatever region, it will be a market that has strengthened its infrastructure and eliminated bureaucratic bottlenecks to trade. By 2024, we may all be surprised at the outcome.