An important aspect to optimising your supply chain is to navigate the geopolitical environment and adapt accordingly whether that means incurring more in the way of trade costs or time. It is important to optimise your supply chain considering your strategic direction and operational efficiency.
Over the first half of the 2020s countries have started to go through the process of deglobalisation. There has been an increase in protectionist policies which can have the effect on overall economy and an increase in costs. An effect on increased regulation may have an effect on volume however if we were to look at China the value of its exports has decreased by 7.5% (Value of Chinas exports falls sharply on sliding prices). In contrast in terms of volume, exports are growing 10% per year.
This indicates that in protectionist environment companies are still willing to export in this environment however the higher cost means that value is decreasing. Overall, this comes with its own paradoxes. While the value of exports is decreasing China have become more central to global trade networks, with global trade increasing by 24% ( Protectionism is failing to achieve its goals and threatens the future of critical industries) companies will need to factor in increased costs and sustained demand in global products and services.
There has been a slowdown in globalisation, this can be seen as a reorganisation of global value chains ( deglobalisation the reorganisation of global value chains in a changing world). This can be attributed to rising income inequality, which is driven by several factors from technology innovation, the growth in financial services and changes to pay norms (Slowing down or changing track European Parliament). The economy has become incredibly value and efficiency driven to the point where income inequality across the world has increased.
I focus on reducing on reducing that inequality by helping businesses and companies grow, by focusing on the value provided by your service you can access a global network and expand globally. To achieve this, a country specific risk-based strategy must be implemented to cater for each market and to take care of local regulation. This would encourage the right balance between protecting your business and keeping an optimistic strategy.