Over the weekend the Editorial board of the financial times wrote a thoughtful piece. Titled, ‘The modern era of globalization is in danger.’
The article starts with a quote form Maynard Keynes and his reflection on globalization pre-1914, before moving on to assess the current era of globalization, in which he describes it as being in ‘ill health.’ It cites recent events, such as Brexit, the collapse of the Doha trade talks and the rise of nationalist governments.
Recently, Elevate Export Finance took the time to talk with Carl Breau and Dr. Jay Myers (video to be made available later today on Elevate’s Global Trade Intelligence page). In the interview, we asked for their views on the impact of the current crisis on the global supply chain and with that, globalization itself.
Both Breau and Dr. Myers provided their views on potential future changes. What is clear, the world cannot dismantle the global supply chain overnight and move to an alternative. The current system is too established and resilient. However, the urgent need for access to PPE supplies, has highlighted the challenges of the current system and will inevitably result in changes, namely greater diversification. Diversification has already been a core concept in the global supply chain, however, developed countries (and its businesses) have diversified between other countries with a primary focus on lowering cost – their own country is often omitted from the equation. What this crisis has told us, is that not having some of that diversification in your own back yard can have serious consequences. Just think about the desperate race by governments to build ventilators.
Check back for the Breau and Myers interview….