After decades of fast growth, the trend toward increasingly global supply chains may be slowing down, according to a report by Standard Chartered Bank, which is based in the United Kingdom.
In Global Supply Chains: New Directions, the Standard Chartered Bank acknowledges that several macroeconomic trends, such as increasing urbanization, more sophisticated communications technology, and lower oil prices, continue to support the growth of global supply chains. Yet at the same time, other trends are creating a sort of headwind that is slowing the pace of growth. For example, automation and robotics are improving, making it easier for companies to stop chasing low-cost labor abroad and bring their manufacturing operations back to local markets. Increasing concerns about sustainability and the high carbon footprint of global supply chains may also be dampening global supply chain growth. Some companies are interested in shortening their supply chains to avoid the risk of disruptions due to a natural disaster or civil unrest half a world away.
Taking these gathering forces into consideration, Standard Chartered Bank asserts that while global supply chains will continue to expand, they will do so at a rate much slower than in the 1990s and early 2000s, when world trade grew at about twice the pace of gross domestic product. Furthermore, that growth will occur in a different fashion than in the past. The bank identified three new directions for global supply chains: