2 ms·
Since before Covid, but Covid simply highlighted the issue. A Taiwan earthquake shuts down the entire disk drive manufacturing system. A fire in a single manu
by bsder 4y ago
Since before Covid, but Covid simply highlighted the issue.
A Taiwan earthquake shuts down the entire disk drive manufacturing system. A fire in a single manufacturer wipes out Toyota's ability to deliver cars. A single manufacturer controls 25% of the market for eggs. The US military can't get any more black powder because a single facility blew up. etc.
This is the end state of rampant consolidation for economies of scale.
- walterbell 4y agoThose are relatively transient emergency conditions which affect specific goods. The article above describes profit trends across multiple sectors: > Profit margins of firms in critical sectors have increased, as ECB data show. Since the end of 2019, profits have overall grown more strongly than wages; the surge in profits is concentrated in sectors such as agriculture; mining and utilities; trade, transport, food. In the last few years, tariffs and sanctions have started moving _some_ supply chains in the direction of resilience and deglobalisation, including national investments like the $50B US CHIPS Act, https://archive.is/TMZQm https://archive.is/TMZQm > Emerging markets in Latin America, Africa and Asia, for example, are building regional production networks for crucial goods. Ultimately, this could create more resilient trade pathways and new development models that aren’t entirely pinned to exporting cheap goods to a handful of rich nations across long transport routes that are becoming more expensive and politically contentious.