Table of contents

Preface 3

Acknowledgements 4

Abbreviations 5

Executive summary 10

1 Overview 12

1.1. Supply chains enable competitive production 13

1.2. Current trade flows are relatively well diversified, but there are some trends towards overconcentration

14

1.3. Some sectors and countries may be more exposed to shocks than others 15

1.4. Relocalising supply chains may result in GDP declines and more variable output for most

countries 16

1.5. Global supply chains are affected by the digital transformation and by policies pursuing

environmental objectives 17

1.6. Supply chains can be resilient without undermining the benefits of open markets 19

1.7. Policy approaches for agile, adaptable and aligned supply chains 19

References 22

Note 22

Part I Monitoring supply chain interdependencies 23

2 The state of international supply chains 24

2.1. International supply chains have boosted efficiency, created new opportunities and reduced

poverty 25

2.2. Production and trade are more globalised than ever 27

2.3. Trends vary across countries and industries: Slowbalisation? 28

References 38

Notes 40

3 Understanding trade dependency and the impacts of disruptions 41

3.1. Perceptions of increasing external shocks undermine trust in trade 42

3.2. Anticipating risks associated with trade dependency 45

3.3. National imports and exports have become more concentrated 47

3.4. OECD Member countries have relatively low trade concentration, but have scope to

diversify further 50

3.5. Global and OECD trade dependency on China has increased significantly, but China also

depends on OECD countries 55

3.6. Supply chain shocks need to be understood and anticipated 63

3.7. Does re-localising or reducing trade minimise exposure to shocks and lower trade

dependency? 68

References 71

Notes 74

4 The digital transformation, environmental objectives and international supply

chains 77

4.1. The digital transformation and the pursuit of environmental sustainability objectives

introduce both opportunities and vulnerabilities 78

4.2. Promoting social and environmental sustainability along supply chains 85

References 94

Notes 96

Part II Beyond resilience: Agile, adaptable and aligned supply chains 97

5 Risk management at the firm-level 98

5.1. Firms use various strategies to build resilient supply chains 100

5.2. Firms adopt a systemic approach to risks 101

5.3. Triple-A supply chains can deal with uncertainty and change, while preserving the benefits

of open trade 102

References 103

Note 104

6 Policy environments that enable agility, adaptability and alignment 105

6.1. Trade facilitation measures for goods increase the agility and adaptability of supply chains 106

6.2. Supporting services can underpin adaptable supply chains 114

6.3. Better digital transformation policies will make supply chains more resilient and agile 121

6.4. International co-operation, and co-ordination with the private sector bolster resilience 126

References 128

Notes 130

7 Policies can balance sustainability, efficiency and resilience 131

7.1. Synergies between resilience, efficiency and sustainability can be captured 132

7.2. Trade-offs need to be addressed when balancing objectives 132

7.3. Targeting sustainability requires protecting resilience and efficiency 133

References 134

Annex A. A guide to using the country by country data 135

Annex B. Country by country data 143