Supply chain disruption has become the new normal and unless businesses reconfigure, growing geopolitical tensions, ESG* demands from consumers, inflation, energy prices, port congestions, and the pandemic will continue to exacerbate the problem, found GlobalData. The leading data and analytics company notes that businesses and nations must reinvigorate their local supply chains via reshoring – bringing supply chains back within a country – and nearshoring – bringing supply chains to a nearby country.

According to GlobalData’s latest report, ‘Supply Chain Disruption – Thematic Research’, worker shortages continue to exacerbate supply chain disruptions. The leading data and analytics company notes that global supply chain-related job vacancies increased by over 200% in two years from 11,135 in July 2020 to 34,638 in July 2022. Companies are finding it difficult to fill these roles due in part to the general trend of the ‘Great Resignation’. However, the main driver is that workers have realized how difficult managing supply chains is when most companies lack advanced analytical tools and digitized supply chains.

Michael Orme, Consultant Analyst in the Thematic Intelligence team at GlobalData, comments: “The global order that enabled and sustained integrated supply chains from 2000 to 2019 is collapsing, and geopolitical tensions are rising. With no end in sight to the ‘forever’ conflict in Ukraine and global energy prices reaching record highs, it is clear that much will need to be done to secure supply chains and make them more sustainable.

“This imperative is driving the emergence of lavishly funded policies to enable the reshoring of leading-edge semiconductors in the US and Europe instead of offshoring them to northeast Asia, a trend that will spread to other sectors as current pressures show little sign of abating. By the end of the decade, just as chips, the most complex products ever created, are essentially printed at scale, it will also become increasingly possible to print almost anything at scale where it is needed.

“This is the direction of travel for supply chains as the Fourth Industrial Revolution, the real battleground between the US and China, unfolds.”

GlobalData’s report notes that semiconductor supply chains will be a key battleground in the future and will underly geopolitical tensions.

Emilio Campa, Analyst in the Thematic Intelligence team at GlobalData, comments: “East Asia makes up nearly 75% of global semiconductor manufacturing capacity, and China will hold about 61% of the world’s lithium-ion battery capacity by 2026. This is a major geopolitical weakness for Western countries in areas that are key for future technologies.”

Reshoring semiconductor manufacturing and nearshoring metals mining is a must for Western countries to retain their seat at the technological table. We predict that major shifts away from the China hub will be undertaken by many Western companies in the next five years.

GlobalData’s report also notes that one growing field capable of supporting future reshoring efforts is synthetic biology. A fast-growing example of this would be the meat substitute industry. According to GlobalData, the value of the meat substitute industry reached $6.9 billion in 2021, up from $4 billion in 2015.

Amna Mujahid, Analyst in the Thematic Intelligence team at GlobalData, comments: “Synthetic biology will enable lean supply chain management, having few products in global circulation, and decreased reliance on imports while supporting reshoring efforts. While these innovations will not become widespread overnight, the synthetic biology revolution is coming, and only by harnessing it, alongside other emerging technologies, will companies secure the health and performance of their supply chains.”

Synthetic alternatives are increasingly being used to meet our demand for meat, fabrics, precious metals, fuel, medicines, and much more. Within the meat industry, synthetic biology has the potential to make it less vulnerable to supply chain disruptions as companies develop cultured, printed, or fermented meat alternatives.

* Environmental, social, and governance (ESG)