4 ms·

Long-term -- yes; short and medium-term -- not necessarily. For example, during and after Covid, Germany had a very severe antibiotics shortage. I think it is s

by mppm 2y ago

Long-term -- yes; short and medium-term -- not necessarily. For example, during and after Covid, Germany had a very severe antibiotics shortage. I think it is still ongoing to some extent. On one hand, it seems ridiculous to suggest that Germany is incapable of producing all the antibiotics it needs. On the other hand, ramping up production that has been offshored is not that easy, and is a lot more expensive initially. Same thing with the chip shortage -- these weren't even close to leading-edge chips, but trying to ramp up production domestically would likely cost 10x or more. Same with Russian gas, or any number of other things. Supply chain crunches can do a lot of damage even for individual products. If they were to happen simultaneously across multiple industries, the effect could be truly disastrous.

leereeves 2y ago
> Long-term -- yes; short and medium-term -- not necessarily. For example, during and after Covid, Germany had a very severe antibiotics shortage. I think it is still ongoing to some extent. That sounds like a good reason to favor local manufacturing. > On the other hand, ramping up production that has been offshored is not that easy, and is a lot more expensive initially. And that sounds like a good reason to do it now and not wait for a crisis when the consequences would be worse.
ethbr1 2y ago
> On the other hand, ramping up production that has been offshored is not that easy, and is a lot more expensive initially. It depends on the nature of that particular good's production. Some industries are incredibly supply-chain and labor-intensive. Others are capital-intensive. Others may be knowledge-intensive. A country should seek to compete in industries it has the most core competencies in.
- leereeves 2y ago
  > A country should seek to compete in industries it has the most core competencies in. While US policymakers were following that advice, China did the opposite. They decided what they wanted to compete in and built the core competencies they needed to do so.

by mppm 2y ago

leereeves 2y ago

> Long-term -- yes; short and medium-term -- not necessarily. For example, during and after Covid, Germany had a very severe antibiotics shortage. I think it is still ongoing to some extent. That sounds like a good reason to favor local manufacturing. > On the other hand, ramping up production that has been offshored is not that easy, and is a lot more expensive initially. And that sounds like a good reason to do it now and not wait for a crisis when the consequences would be worse.

ethbr1 2y ago

> On the other hand, ramping up production that has been offshored is not that easy, and is a lot more expensive initially. It depends on the nature of that particular good's production. Some industries are incredibly supply-chain and labor-intensive. Others are capital-intensive. Others may be knowledge-intensive. A country should seek to compete in industries it has the most core competencies in.

leereeves 2y ago
> A country should seek to compete in industries it has the most core competencies in. While US policymakers were following that advice, China did the opposite. They decided what they wanted to compete in and built the core competencies they needed to do so.