Resilient and Innovative Supply Chains: Evidence-based policy and managerial implications

Author Name TODO Yasuyuki (Faculty Fellow, RIETI)
Creation Date/NO. August 2022 22-P-019
Research Project Research on relationships between economic and social networks and globalization
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The aims of this paper are threefold. First, we discuss how resilient and innovative supply chains and knowledge networks can be constructed, mostly based on papers from current and previous projects at RIETI. The role of geographic diversity across countries in partners of supply chains and knowledge networks is particularly emphasized. Second, we provide an overview of the recent policies affecting global supply chains and trends in supply chains of major countries from the viewpoint of diversity. It is particularly observed that the reliance on China in imports of intermediate products to many countries in Asia has increased substantially. Although the reliance of Japan on China recently declined to some extent, it is still high compared with that of the United States and European countries. Finally, policy and managerial suggestions are provided based on the academic evidence outlined in the first section and the current observations from the second section. It is suggested that Japan should lower the reliance on China in supply chains and diversify supply chains internationally to countries without national security concerns (i.e., “friendshoring”) to increase resilience, and should expand knowledge networks among such countries to foster innovation.

The English version of this paper is 22-P-024.