The writer is the executive director of the LSE Economic Diplomacy Commission
Recent months have shown that supply chains carry not only the world’s goods, but also its inflation anxieties, geopolitical divisions, climate challenges and health risks.
Semiconductor shortages are weighing down the industrial recovery as droughts have hit Taiwanese producers and geopolitics have split the market. At the same time, a squeeze on the supply of building materials has led to rising costs for contractors, adding to concerns about inflationary pressures across the world economy. And as medical supplies have run low and vaccine production fallen short, the Covid pandemic has continued to rage.
It was welcome, therefore, that the final communiqué of last weekend’s G7 summit should contain an acknowledgment of the threats faced by global supply chains and a proposal for establishing a common framework for stress-testing them.