The global supply chain, as we all know, is immense. It connects the private sector, international organizations, public institutions, and even entire nations. With data and data capture now readily available, there’s opportunity for creating a connected, global level supply network. That’s the proposal a group of international thought leaders recently put forth in the journal Science.
To date, organizations have improved connectivity within their “focal” supply chains, between direct suppliers and customers. However, the missing link has been the bigger, global supply chain the authors say is crucial for the future.
When considering such a proposal, it’s important to understand the enormity of it. There are more than 300 million firms in the world, connected through approximately 13 billion supply links that produce goods and services. Until recent advancements in technology and data capture, the idea of linking and analyzing the world economy at the firm level was not a possibility. The authors argue that without the ability to link and monitor the global supply chain, we wind up with prolonged shortages of raw materials and medical supplies when needed, as with the pandemic. Benefits can include better transition to green economies, improved human rights, identification of systemic risks and secure provisioning systems.
Now that we have better data and tools to map out the global, firm-level supply network, it’s within reach to think these shortages can be a thing of the past. The journal authors say that now is the time to create guardrails, however, so that the use of all this potentially shared data can be responsible and work for the public good. Without them in place, if supply chain data fell into the wrong hands, the consequences could be high. Strict data security and data privacy would be an essential element for such a global supply chain network.
To get there, all the global players, from public to private, must agree to a massive collaborative effort. To date, an understanding of the impact supply chains can have on macroeconomic phenomena like GDP, business cycles and inflation has not been widely available or understood on a widespread level. This needs to change, say the authors.
They present recommendations for better connecting the millions of firms and public institutions. This would include integrating various datasets and creating analytical tools to create a comprehensive picture of global supply links. These, in turn, could be used by governments and public institutions to create policy. In advance of such a widespread, ambitious agenda, however, is the necessity to gather invested stakeholders. This would include governments, central banks, the commercial sector, international organizations, statistical agencies, and even the scientific community. Who exactly would lead this effort and can pull all the parties together to work toward the agenda is one of the big unknowns, and one of the factors that could potentially tank such a proposal before it even gets off the ground. But if it did launch, the global supply chain—and the world—could benefit.
